LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
February 21, 2001
TO: Honorable Jim Solis, Chair, House Committee on Economic
Development
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB240 by Lewis, Glenn (Relating to eligibility of
certain employees for unemployment compensation benefits
after the birth or adoption of a child.), As Introduced
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB240, As Introduced: negative impact of $(6,581,410) through the *
* biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
**************************************************************************
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(3,290,705) *
* 2003 (3,290,705) *
* 2004 (3,290,705) *
* 2005 (3,290,705) *
* 2006 (3,290,705) *
****************************************************
All Funds, Five-Year Impact:
***************************************************************************
*Fiscal Probable Probable Probable Probable *
* Year Savings/(Cost) Savings/(Cost) Revenue Savings/(Cost) *
* from General from Gain/(Loss) from *
* Revenue Fund Unemployment from Unemployment *
* 0001 Compensation Unemployment Compensation *
* Special Compensation Benefit Account *
* Administration Clearance 0937 *
* Account/ Account *
* GR-Dedicated 0936 *
* 0165 *
* 2002 $(3,290,705) $(3,290,705) $1,110,784,850 *
* $(1,110,784,850) *
* 2003 (3,290,705) (3,290,705) 1,110,784,850 (1,110,784,850) *
* 2004 (3,290,705) (3,290,705) 1,110,784,850 (1,110,784,850) *
* 2005 (3,290,705) (3,290,705) 1,110,784,850 (1,110,784,850) *
* 2006 (3,290,705) (3,290,705) 1,110,784,850 (1,110,784,850) *
***************************************************************************
*****************************************************
* Fiscal Year Probable Savings/(Cost) from Other *
* Special State Funds *
* 0998 *
* 2002 $(4,387,608) *
* 2003 (4,387,608) *
* 2004 (4,387,608) *
* 2005 (4,387,608) *
* 2006 (4,387,608) *
*****************************************************
Fiscal Analysis
The bill amends Chapter 207 of the Labor Code to expand the eligibility
for unemployment insurance benefits to include individuals who take a
leave of absence or permanently separate from a place of employment to
care for a child within one year following the birth or adoption of a
child. To be eligible to receive benefits, an individual who claims
benefits under the bill would not be required to comply with the
provisions to which other individuals are subject, such as being
available for work, conducting an active search for work, applying for
suitable work, and accepting suitable work when offered.
Methodology
The fiscal impact of the bill is estimated by the Texas Workforce
Commission (TWC) to be $1.1 billion per year to the Unemployment
Compensation Benefits Account 0937. TWC assumes that 50 percent of all
eligible parents will apply for benefits based on US census estimates of
the number of births in Texas for a one year period from July 1, 1997
through June 30, 1998. TWC assumes an average weekly benefit of $198.78
and estimates that the administrative cost of an initial claim is 25
percent higher than for other claims because of additional investigation
of these claims. TWC's assumption of an average duration of benefits of
16.35 weeks is based upon data through November 1999, which is within the
range of the 12-weeks leave time provided by the Family Medical Leave
Act (FMLA) and the 26-week maximum to qualify to receive unemployment
insurance benefits in Texas. This estimate is based on births to the
general workforce; adoptions are not factored in.
The increased benefit payout would require an increased employment tax
assessment to employers of approximately $116 per employee per year,
which would be collected in the Unemployment Compensation Clearance
Account 0936. TWC estimates that there are 8.6 million Texas workers
covered by unemployment insurance.
The fiscal impact of the bill from state employees' unemployment
insurance claims is estimated to be $10,969,018 per year. TWC estimates
that there are approximately 318,945 covered state employees. Using a
ratio of births to covered employment of 3.9 percent calculated from the
general workforce pool, TWC estimates that there would be 12,437 state
government employees who have a child born each year, of which only 25
percent may claim unemployment insurance benefits. Those 3,109 state
employees who may file for benefits would have an average weekly benefit
of $294 ( the average weekly benefit of state employee's benefit is
higher than the average weekly benefit of the general workforce because
the average wage of state employees is higher than the average wage of
the general workforce) for the maximum 12-week leave period allowed under
FMLA .
TWC also estimates that the benefits paid to state employees who file a
claim under this bill would be in the same proportion as benefits paid
to state employees from the affected state agencies and the
Reimbursements to the Unemployment Compensation Benefit Account--30
percent of General Revenue from the agencies with employees who file
claims, 30 percent from the General Revenue-Dedicated Unemployment
Compensation Special Administration Account 0165 to pay the remaining
portion of the General Revenue-funded claims, and 40 percent from Other
Special State Funds for claims funded mainly by various federal fund
sources. The estimated fiscal impact of state employee claims is based
on births and does not include adoptions.
Local Government Impact
The Texas Association of Counties (TAC) provided information regarding
the local fiscal impact of the provisions of the bill. A county would
incur a cost of $7,644 for an eligible employee making a salary of
$20,000 who chooses to take off the maximum allowed time of 26 weeks upon
the birth or adoption of a child. The county's cost would be $5,980 for
an eligible employee earning an annual salary of $12,000.
For the 12-month period ending January 31, 2000, the TAC Insurance Trust
paid for 226 live births to county employees. If the provisions of the
bill had been in place and if all eligible employees had used the maximum
time off, it would have cost the pool between $1.3 million and $1.7
million for that one-year period.
There are approximately 97,000 county employees in Texas. Estimating
based on the TAC Insurance Trust's figures for 1999-2000, there would be
a possible 1,880 births among county employees statewide per year, with
a cost to the counties of between $11.2 million and $14.4 million if
every eligible employee used the maximum time off allowed.
Source Agencies: 320 Texas Workforce Commission
LBB Staff: JK, JO, RT, HL, DB