HBA-RBT H.C.R. 132 76(R) BILL ANALYSIS Office of House Bill AnalysisH.C.R. 132 By: Alexander Economic Development 4/7/1999 Introduced BACKGROUND AND PURPOSE The federal unemployment tax was imposed under the Federal Unemployment Tax Act in 1935 as part of New Deal social legislation for the purpose of encouraging the states to enact unemployment compensation laws that met federally mandated standards. Texas employers have for many years paid nearly three times more in taxes than the federal government has returned in administrative grants. An emergency temporary 0.2 percent Federal Unemployment Tax Surtax authorized in 1976 accomplished its goal of repaying the debt from that year's recession in 1987 and is no longer needed, however it has remained in full effect and recently was extended through the year 2007. The United States Department of Labor has used the threat of withholding these funds to compel the state to comply with its directives, which has prevented the Texas Legislature from enacting unemployment compensation laws that are more suitable to the needs of the people of this state. In addition to insufficient funding, the federal control over programs that rapidly re-employ workers hinders the ability of the State of Texas to adapt federally funded employment service programs to the specific needs of state and local economies. Texas has instituted an innovative workforce development system that minimizes administrative costs and maximizes the ability of communities to customize workforce development services to local conditions. The federal unemployment tax is a burden on Texas employers and a drain on the state's economy, and federal control of state unemployment insurance programs has impeded the state's efforts to help the unemployed by hindering program effectiveness and the ability to respond quickly to local and state needs. H.C.R. 132 respectfully urges the Congress of the United States to reform financing of the Federal Unemployment Tax Act, provide for adequate funding of the employment service so that employers can rapidly identify skilled workers and job seekers can quickly be re-employed, repeal the temporary 0.2 percent surtax, and transfer control of state unemployment insurance programs to the states. Provides that the Texas secretary of state forward official copies of this resolution to the president of the United States, to the speaker of the house of representatives and the president of the senate of the United States Congress, and to all members of the Texas delegation to the congress with the request that this resolution be officially entered in the Congressional Record as a memorial to the Congress of the United States of America. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS H.C.R. 132 respectfully urges the Congress of the United States to reform financing of the Federal Unemployment Tax Act, provide for adequate funding of the employment service so that employers can rapidly identify skilled workers and job seekers can quickly be re-employed, repeal the temporary 0.2 percent surtax, and transfer control of state unemployment insurance programs to the states. Provides that the Texas secretary of state forward official copies of this resolution to the president of the United States, to the speaker of the house of representatives and the president of the senate of the United States Congress, and to all members of the Texas delegation to the congress with the request that this resolution be officially entered in the Congressional Record as a memorial to the Congress of the United States of America.