Fiscal Analysis
Under current statute, successor employers do not have a new
tax rate calculated in the year of acquisition since they are
already experience rated. This bill would amend Section 204.085
of the Texas Unemployment Compensation Act to require the calculation
of an interim tax rate for all successor employers in the year
of the acquisition where transfer of compensation experience
is mandatory. The bill would take effect September 1, 1997.
According
to the Texas Workforce Commission, Unemployment Insurance Federal
Funds costs to implement the provisions of the bill would be
$188,664 in FY 1998 and $29,464 per year thereafter. These
costs include one new FTE, an Accounts Examiner, to process
the tax rate calculations and answer questions raised due to
the additional interim rate. FY 1998 costs include start-up
costs to re-program the existing tax rate calculation to provide
for an interim calculation, training for home office and field
office staff to properly analyze the interim tax rate computations,
and printing , mailing, and processing costs for additional
tax notices.
Methodolgy
Costs to Federal Fund Account 5026 were based upon the following
assumptions:
(1) Costs to re-program the existing tax rate
calculation to provide for an interim calculation would be $25,000
in FY 1998.
(2) Training for home office and field office
staff to properly analyze the interim tax rate computations
would cost $131,200 in FY 1998 (328 FTEs * 16 hours of training
* $25/hour).
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 ($188,664) 1.0
1998 (29,464) 1.0
2000 (29,464) 1.0
2001 (29,464) 1.0
2002 (29,464) 1.0
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 ,BK