The bill would amend Chapter 204 of the Labor Code, relating to the replenishment rate used to determine an employer's unemployment contribution tax rate. The bill would prohibit the Texas Workforce Commission (TWC), in the calculation of the replenishment tax rate, from including certain benefits paid as a result of an order or proclamation by the Governor declaring at least 50 percent of the counties in this state to be in a state of disaster or emergency. No significant fiscal impact to the State is anticipated.
The Unemployment Trust Fund Account, outside the State Treasury, would see a fiscal impact from this bill. According to TWC, for tax year 2021, approximately $4.3 billion in COVID-19 related claims would be removed from the calculation of the General Tax and Replenishment Tax calculations. For tax year 2022, approximately $1.1 billion would be removed from the calculation of the General Tax and Replenishment Tax calculations. Without a cash infusion to repay these COVID-19 related claims TWC could issue revenue bonds to finance the trust fund deficit over a longer period of time. As the timing and severity of any future declared states of disaster or emergency are unknown, the fiscal impact after 2022 cannot be estimated.
The fiscal implications of the bill cannot be determined at this time.