JKM H.B. 565 75(R)BILL ANALYSIS ECONOMIC DEVELOPMENT H.B. 565 By: Oliveira 2-27-97 Committee Report (Unamended) BACKGROUND The Texas Unemployment Compensation Act, like the unemployment compensation laws of all states, is required to conform to federal law. The United States Department of Labor recently determined that the Act conflicts with federal requirements because it denies all unemployment benefits to individuals who cause their own unemployment by their involvement in the sale of a business. Public law 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), enacted on August 22, 1996, by the United States Congress, mandates that state unemployment compensation laws require that food stamp overissuances to a household be deducted from unemployment benefits payable to a member of the household. PURPOSE H.B. 565 would clarify eligibility for unemployment benefits following the sale of a business and provide for withholding uncollected food stamp overissuances from unemployment benefits. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 204.022(a) of the Labor Code to add Section 207.051 to the list of sections that contain unemployment compensation disqualification provisions. SECTION 2. Amends Section 207.051 of the Labor Code to disqualify an individual who participates in the sale of a business from receiving unemployment compensation until he or she returns to employment and works for six weeks or earns six times the weekly benefit amount. SECTION 3. Amends Chapter 207 of the Labor Code by adding Subchapter G, titled WITHHOLDING FROM UNEMPLOYMENT BENEFITS FOR UNCOLLECTED OVERISSUANCES OF FOOD STAMPS.@ Sec. 207.111 defines "state agency," "uncollected overissuance," and "unemployment benefits." Sec. 207.112 states that the subchapter applies only if the state agency has provided for reimbursement to the commission for administrative costs attributable to the repayment of uncollected overissuances. Sec. 201.113 mandates that individuals who file new claims for unemployment insurance with the commission must disclose whether they owe an uncollected overissuance. If the individual does owe an uncollected overissuance, the commission must notify the state agency of that individual's identity. Sec. 207.114 states that the commission shall deduct and withhold from unemployment benefits of individuals who owe an uncollected overissuance the amount the individual specifies, the amount determined by an agreement submitted to the state agency, or any amount otherwise required to be deducted and withheld under Section 13(c)(3)(B), Food Stamp Act of 1977 (7 U.S.C. Section 2022(c)(3)(B). The commission shall pay any amount deducted and withheld to the state agency. Any amount deducted and withheld will be treated as if it were paid to the individual as unemployment benefits and submitted to the state agency as repayment of the individual's uncollected overisssuance. SECTION 4. Effective date: September 1, 1997, and applicable only to claims filed on or after the effective date. SECTION 5. Emergency clause.