BILL ANALYSIS


                                                         S.B. 102
                                                       By: Bivins
                                                          Finance
                                                         01-26-95
                                     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), (d), and (f):
     September 1, 1995.
     
     SECTION 6.  Emergency clause.