By:  Galloway                                          S.B. No. 643

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to the rate applicable to certain successor employers for

 1-2     contributions under the unemployment compensation system.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 204.085, Labor Code, is amended to read

 1-5     as follows:

 1-6           Sec. 204.085.  CONTRIBUTION RATE FOR SUCCESSOR EMPLOYER.

 1-7     (a)  If, on the date of an acquisition, at least one of the

 1-8     employing units that is a party to the acquisition is an

 1-9     experience-rated employer, and the [A] successor employing unit

1-10     [that] is subject to Section 204.083 or 204.084, the successor

1-11     employing unit [and is an experience-rated employer on the date of

1-12     the acquisition] shall pay contributions from the effective date of

1-13     the acquisition as provided by Section 204.082 until the end of the

1-14     calendar year in which the acquisition occurred at a [the] rate

1-15     computed by adding together the compensation experience of all the

1-16     employing units that are parties to the acquisition for the 12

1-17     calendar quarters preceding the quarter in which [applicable to the

1-18     successor employing unit on the date of] the acquisition occurred

1-19     and using that combined experience to compute an aggregate

1-20     experience rate.

1-21           (b)  If, on the date of an acquisition, no employing unit

1-22     that is a party to the acquisition is an experience-rated employer,

1-23     and the [A] successor employing unit [that] is subject to Section

 2-1     204.083 or 204.084, the successor employing unit [and is not an

 2-2     experience-rated employer on the date of the acquisition] shall pay

 2-3     contributions at the rates prescribed by Section 204.0065 and

 2-4     Section 204.121, if [from the date of] the acquisition occurs

 2-5     before January 1, 2000, and at the rate prescribed by Section

 2-6     204.006, if the acquisition occurs on or after January 1, 2000,

 2-7     until the successor employing unit is eligible for an experience

 2-8     rate under Section 204.041.  The rate under Section 204.041 shall

 2-9     be computed by adding together the compensation experience of all

2-10     employing units that are parties [next tax rate computation date at

2-11     the highest rate applicable at the time of the acquisition to any

2-12     predecessor employer who is a party] to the acquisition and using

2-13     it to compute an aggregate experience rate.

2-14           SECTION 2.  This Act takes effect September 1, 1997, and

2-15     applies only to a computation of an experience rate for

2-16     unemployment compensation contributions made by the Texas Workforce

2-17     Commission as a result of an acquisition that occurs on or after

2-18     the effective date of this Act.  A computation of an experience

2-19     rate for unemployment compensation contributions made by the Texas

2-20     Workforce Commission as a result of an acquisition that occurs

2-21     before the effective date of this Act is governed by the law in

2-22     effect on the date that the acquisition occurs, and the former law

2-23     is continued in effect for that purpose.

2-24           SECTION 3.  The importance of this legislation and the

2-25     crowded condition of the calendars in both houses create an

 3-1     emergency and an imperative public necessity that the

 3-2     constitutional rule requiring bills to be read on three several

 3-3     days in each house be suspended, and this rule is hereby suspended.