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