JKM H.B. 994 75(R)BILL ANALYSIS


ECONOMIC DEVELOPMENT
H.B. 994
By: Brimer
4-1-97
Committee Report (Amended)



BACKGROUND 

When a discharged employee files for unemployment insurance, the
employer's general unemployment insurance tax rates increases.  The tax
rate increase is levied across all of the employer's workers.
Consequently, a small percent hike in the tax rate can result in a
significant cost increase for the employer.  Often, the incremental tax
increase is more than the total benefits the discharged employee collects. 

PURPOSE

House Bill No. 994 would allow employers the opportunity to voluntarily
repay benefits that have been charged back to their accounts in order to
avoid or diminish increases to their general tax rates. 


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 of the bill amends Subchapter C, Chapter 204, Labor Code, by
adding Section 204.048 entitled "VOLUNTARY CONTRIBUTIONS." 

Subsection (a)  provides that only experience-rated employers may make
voluntary contributions. 

Subsection (b)  provides that the amount of the contribution may be equal
to all or part of the employer's chargebacks.  It requires the Commission
to allocate a partial contribution first to the employer's most recent
chargebacks. 

Subsection (c)  requires the commission to reduce the employers
chargebacks by an amount equal to the voluntary contribution and recompute
the employer's experience rate for the succeeding calendar year. 

Subsection (d)  requires employers electing to make voluntary
contributions to do so within 30 days after the mailing of their annual
experience tax rate notices.  The employer may not revoke a contribution
after the commission uses it to recompute the employer's experience rate. 

 
Subsection (e) imposes a federal requirement that an employer's tax rate
may not be recomputed based on voluntary contributions made after the
expiration of the 120th day of the calendar year for which the rates are
effective. 

Subsection (f) requires the Commission to deposit voluntary contributions
to the credit of the "compensation fund." 

SECTION 2.  EFFECTIVE DATE September 1, 1997, and applies only to
experience tax rates computed on or after that date. 

SECTION 3.  EMERGENCY CLAUSE.  


EXPLANATION OF AMENDMENTS

Amendment #1 amends Section 1, Subsection (f) by inserting "unemployment"
to clarify the previous language of "compensation fund."