LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  April 11, 1997
         
         
      TO: Honorable Rene Oliveira, Chair            IN RE:  Senate Bill No. 216, As Engrossed
          Committee on Economic Development                              By: Nixon, Drew
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB216 ( Relating 
to the disqualification for the receipt of unemployment compensation 
benefits of an individual receiving certain remuneration.) this 
office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB216-As Engrossed
         
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 amends Section 207.049, Labor Code, to add payments 
of severance pay to the list of disqualifying income.  However, 
severance payments as disqualifying income will not apply to 
any amounts explicitly outlined in a group employment contract. 
 In addition, this bill requires benefits to be reduced dollar 
for dollar by the amount of any disqualifying income received. 
  

This bill adds disqualifications for benefits to individuals 
in benefit periods in which the person is receiving remuneration. 
 Specifically, this bill disallows a person from receiving benefits 
if he or she is receiving severance pay not related to a group 
contract.  The bill also reduces the benefit payment by the 
amount of specific disqualified remuneration received.  
 
Methodolgy
 
Costs:  An unemployment specialist is required to make minor 
one time alterations to benefits forms and changing the benefits 
manual and the appeals policy and precedent manual, and a programmer 
would be required to adjust screens to the Benefit Payment System. 
 No significant fiscal impact.

Savings:  An estimated 5,400 
claims would not be filed.  This translates into 495 staff hours 
per year for a Claims Examiner at a savings of $5,243 per year 
in all fiscal years.  Also, an estimated 400 continued claims 
requiring investigations would be eliminated for a staff savings 
of 166 staff hours per year or $1,758 per year for all fiscal 
years.
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 Probable           Change in Number   
            Savings/(Cost)     of State                                                                   
            from Workforce     Employees from                                                             
            Commission         FY 1997                                                                    
            Federal Account                                                                               
            - Federal                                                                                     
            5026                                                                                           
       1998            $8,767             (3.0)                                                      
       1998             8,767               0.0                                                      
       2000             8,767               0.0                                                      
       2001             8,767               0.0                                                      
       2002             8,767               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
 
Similar annual fiscal implications would continue as long as 
the provisions of the bill are in effect.
          
No fiscal implication to units of local government is anticipated.
          
   Source:            Agencies:   
                                         
                      LBB Staff:   JK ,TH