BILL ANALYSIS S.B. 102 By: Bivins (Mowrey) April 27, 1995 Committee Report (Unamended) BACKGROUND The Federal Insurance Contributions Act requires employers to make a matching contribution to an employee's social security taxes. In 1978, the state enacted legislation in which, as an alternative to a pay raise, the state began paying 5.85 percent of the required 7.65 percent of the employee's social security contribution. This legislation only applied to the first $16,500 of the employee's salary and excluded state-paid judges. PURPOSE As proposed, S.B. 102 provides supplemental pay for judges and state employees while amending the state employee contribution policy for social security taxes. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 606.064, Government Code, as follows: Sec. 606.064. New title: EMPLOYEE CONTRIBUTIONS. (a) Requires each state employee to pay contributions on wages in the amount of the employee tax. Deletes existing text. (b) Provides that the obligation provided by this section is a condition of employment or of holding office. Deletes existing Subsections (b)-(e). SECTION 2. Amends Section 606.067(a), Government Code, to require the legislature to appropriate, for a state employee paid from the state treasury, an amount equal to the state's contributions under only Section 606.063, rather than including Sections 606.064 and 606.065. SECTION 3. Repealer: Section 606.065, Government Code (Contributions for Judges). SECTION 4. Prohibits the appropriations in the General Appropriations Act for the state's contribution to the tax that state employees and state-paid judges (tax) pay under the Federal Insurance Contributions Act from taking effect. Provides that the state's matching contribution appropriations are not affected by this section. SECTION 5. (a) Provides that the state is not obligated to pay any portion of the tax for persons who were not employed by state agencies or institutions or holding office as state paid judges on August 31, 1995. (b) Requires the state to pay, in lieu of the tax, supplemental pay as described by Subsection (d) of this section to persons who were employed by the state on August 31, 1995. (c) Provides that a person who is employed by the state on August 31, 1995, remains on or after September 1, 1995, and leaves state service but returns within two years, is entitled to increased employee retirement contributions being paid to state employees earning the same salary who have not left state service. (d) Provides that this Act is contingent on necessary appropriations made by the 74th Legislature. Sets forth the procedures for compliance with this Act if the appropriations are made. (e) Effective date: January 1, 1996. (f) Effective date for Subsections (a) and (d), : September 1, 1995. SECTION 6. Emergency clause. SUMMARY OF COMMITTEE ACTION Pursuant to public notice posted on March 22, 1995, the Committee on State Affairs convened in a public hearing on March 27, 1995 to consider SB 102. The Chair laid out SB 102 and recognized Rep. Mowrey to explain the bill. Rep. Black laid out a complete committee substitute which was not adopted. The following persons testified neutrally on the bill: Rayford Walker representing Texas Public Employees Association; and Ken Welch representing the State Comptroller's Office. The following persons testified against the bill: Shirley Goldsmith representing the Texas Faculty Association; and Dally Willis representing the Communications Workers of America. The Chair recognized Rep. Mowrey to close. The Chair left SB 102 pending. In a public hearing on April 11, 1995, the Chair laid out SB 102 and recognized Rep. Junell to explain the bill. SB 102 was reported favorably without amendment with the recommendation that it do pass and be printed by a record vote of 8 ayes, 3 nays, 1 pnv, 3 absent.