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."