LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session February 27, 2001 TO: Honorable Jim Solis, Chair, House Committee on Economic Development FROM: John Keel, Director, Legislative Budget Board IN RE: HB694 by Yarbrough (Relating to eligibility for unemployment compensation benefits of certain sheltered workshop employees who are blind.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB694, As Introduced: positive impact of $0 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 $0 * * 2003 0 * * 2004 0 * * 2005 0 * * 2006 0 * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Revenue Gain/(Loss) Probable Savings/(Cost) from * * Year from Unemployment Compensation Unemployment Compensation * * Clearance Account Benefit Account * * 0936 0937 * * 2002 $905,429 $(905,429) * * 2003 905,429 (905,429) * * 2004 905,429 (905,429) * * 2005 905,429 (905,429) * * 2006 905,429 (905,429) * *************************************************************************** Fiscal Analysis The bill would amend Section 201.067 of the Labor Code to exclude training for blind individuals at a sheltered workshop operated by a charitable organization under a rehabilitation program from the definition of "employment," thus exempting them from withholding taxes and, in some cases, disqualifying the wages they receive as employees of sheltered workshops from the calculation of unemployment insurance benefits taxes. The bill would, however, define these individuals as being employed for the purpose of qualifying for unemployment insurance benefits. If enacted, the bill would take effect September 1, 2001. Methodology The fiscal impact of the bill is estimated by the Texas Workforce Commission (TWC) to be $905,429 in each fiscal year of the 2002-03 biennium from Unemployment Compensation Benefit Account 0937. This benefit payout would be reimbursed by the employers of these claimants on a dollar-for-dollar basis to the Unemployment Compensation Clearance Account 0936. TWC used Texas Commission for the Blind information data that there are 636 blind individuals employed in "Lighthouse" workshops in Texas in fiscal year 2001. TWC estimated that there would be an average 25 percent turnover among these employees and that all of these former employees would file claims. TWC also assumed that these individuals would receive the average weekly benefit amount of $219.02 for the maximum benefit period of 26 weeks. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 449 Finance Commission of Texas, 320 Texas Workforce Commission LBB Staff: JK, JO, HL