LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  February 4, 1997
         
         
      TO: Honorable David Sibley, Chair            IN RE:  Senate Bill No. 215
          Committee on Economic Development                              By: Nixon, Drew
          Senate
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
         In response to your request for a Fiscal Note on SB215 ( Relating to notice and
protest rights of certain reimbursing employers under the unemployment compensation
system.) this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB215-As Introduced   FN Revision 1
         
             Implementing the provisions of the bill would result in a net impact of $0 to
General Revenue Related Funds through the biennium ending August 31, 1999.
         
         The bill would make no appropriation but could provide the legal basis for an
appropriation of funds to implement the provisions of the bill.
         
 
Fiscal Analysis
 
This bill adds Section 205.0115 to Subchapter B, Chapter 205, Labor Code.  This bill
would require a reimbursing employer to have the same notice and protest rights
as a taxed employer in lieu of the person for whom the claimant last worked under
conditions which are set out in the bill.  

This bill would not give a reimbursing employer the right to protection from chargeback
that taxed employers are afforded.  It would, however, require the adjudication of the
separation from the reimbursing employer to determine whether the claimant would be
disqualified under the conditions specified in the bill.

According to the agency, if this bill were to pass in its present form, the Texas
Unemployment Compensation Act may no longer conform to federal standards, and
the Dept of Labor would have the right to impose sanctions if the Texas Workforce
Commission operated in accordance with the bill.  Sanctions include employers' loss
of tax credits against the federal unemployment tax and the loss of administrative
grants and are not considered in the fiscal note.
 
Methodolgy
 
According to the agency, additional costs to modify the automated benefits system
were calculated as:
52 weeks X 40 hours=2080 work hours per year.  Increased costs of a grade 16, ADP
Programmer II, at a cost of $2,757 in FY 1998 ($28,668/2080 hours = $13.7827 per hour.
200 hours X $13.7827)

Additional staff costs to further investigate 5,554 claims:  52 weeks X 40 hours = 2080
work hours per year.  Increased costs of a grade 12, Claims Examiner II, at $56,860 per
year ($22,032/2080 hours=$10.5923 per hour.  5,368 hours X $10.5923).
The probable fiscal implications of implementing the provisions of the bill during each of
the first  five years following passage is estimated as follows:
 
Five Year Impact:
 
Fiscal Year Salaries and       Employee           Change in Number   
            Wages
Probable    Fringe
Probable   of State                                                
            Savings/(Cost)     Savings/(Cost)     Employees from                                          
            from Workforce     from Workforce     FY 1997                                                 
            Commission         Commission                                                                 
            Federal Account -  Federal Account                                                            
                               - Federal                                                                  
            5026               5026                                                                        
       1998         ($59,617)         ($15,029)               2.8                                    
       1998          (56,860)          (14,334)               0.0                                    
       2000          (56,860)          (14,334)               0.0                                    
       2001          (56,860)          (14,334)               0.0                                    
       2002          (56,860)          (14,334)               0.0                                    
 
         Net Impact on General Revenue Related Funds:
 
The probable fiscal implication to General Revenue related funds during each of
the first five years is estimated as follows:
 
              Fiscal Year      Probable Net Postive/(Negative)
                               General Revenue Related Funds
                                             Funds
               1998                   $0
               1999                    0
               2000                    0
               2001                    0
               2002                    0
 
          
             No fiscal implication to units of local government is anticipated.
          
   Source:            Agencies:   478   Research & Oversight Council on Worker's Compensation
                                         453   Workers' Compensation Commission
                                         320   Texas Workforce Commission
                      LBB Staff:   JK ,TH ,RA