By Galloway                                      S.B. No. 643

      75R3655 PB-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the experience rate applicable to certain successor

 1-3     employers for contributions under the unemployment compensation

 1-4     system.

 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-6           SECTION 1.  Section 204.085, Labor Code, is amended to read

 1-7     as follows:

 1-8           Sec. 204.085.  CONTRIBUTION RATE FOR SUCCESSOR EMPLOYER.  (a)

 1-9     If, on the date of an acquisition, at least one of the employing

1-10     units that is a party to the acquisition is an experience-rated

1-11     employer, and the [A] successor employing unit [that] is subject to

1-12     Section 204.083 or 204.084, the successor employing unit [and is an

1-13     experience-rated employer on the date of the acquisition] shall pay

1-14     contributions from the effective date of the acquisition as

1-15     provided by Section 204.082 until the end of the calendar year in

1-16     which the  acquisition occurred at a [the] rate computed by adding

1-17     together the compensation experience of all the employing units

1-18     that are parties to the acquisition for the 12 calendar quarters

1-19     preceding the quarter in which [applicable to the successor

1-20     employing unit on the date of] the acquisition occurred and using

1-21     that combined  experience to compute an aggregate experience rate.

1-22           (b)  If, on the date of an acquisition, no employing unit

1-23     that is a party to the acquisition is an experience-rated employer,

1-24     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 rate prescribed by Section 204.0065 if [from

 2-4     the date of] the acquisition occurs before January 1, 2000, and at

 2-5     the rate prescribed by Section 204.006 if the acquisition occurs on

 2-6     or after January 1, 2000, until the successor employing unit is

 2-7     eligible for an experience rate under Section 204.041.  The rate

 2-8     under Section 204.041 shall be computed by adding together the

 2-9     compensation experience of all employing units that are parties

2-10     [next tax rate computation date at the highest rate applicable at

2-11     the time of the acquisition to any predecessor employer who is a

2-12     party] to the acquisition and using that combined experience to

2-13     compute an aggregate experience rate.

2-14           SECTION 2.  (a)  Except as provided by Subsection (b) of this

2-15     section, Section 204.085, Labor Code, as amended by this  Act,

2-16     applies only to a computation of an experience rate for

2-17     unemployment compensation contributions that is made by the Texas

2-18     Workforce Commission on or after that date.  A computation made by

2-19     that commission before that date is governed by the law in effect

2-20     on the date that the computation was made, and the former law is

2-21     continued in effect for that purpose.

2-22           (b)  An employing unit that is taxed for unemployment

2-23     compensation contributions based on an experience rate that would

2-24     not have been applied to that employing unit if the amendments made

2-25     by this Act to Section 204.085, Labor Code, had been in effect on

2-26     September 1, 1995, may apply to the Texas Workforce Commission in

2-27     writing between September 1, 1997, and December 31, 1997, for a

 3-1     recomputation of the employer's experience rate.  On receipt of an

 3-2     application under this subsection, the commission shall recompute

 3-3     the employer's experience rate under Section 204.085, Labor Code,

 3-4     as amended by this Act, and shall use the recomputed experience

 3-5     rate in establishing the employer's unemployment compensation tax

 3-6     rate for all subsequent tax years, beginning January 1, 1998.

 3-7           SECTION 3.  This Act takes effect September 1, 1997.

 3-8           SECTION 4.  The importance of this legislation and the

 3-9     crowded condition of the calendars in both houses create an

3-10     emergency and an imperative public necessity that the

3-11     constitutional rule requiring bills to be read on three several

3-12     days in each house be suspended, and this rule is hereby suspended.