BILL ANALYSIS

C.S.H.B. 3699

By: Vo

Trade, Workforce & Economic Development

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The bill author has informed the committee that the Texas Workforce Commission (TWC) has identified a loophole that permits bad actors to qualify for unemployment benefits. To determine a claimant's qualification for those benefits, TWC is statutorily required to notify the person for whom the claimant last worked of the claim and solicit information accordingly. Under current law, "last work" refers to the employer, as defined by the Texas Unemployment Compensation Act or another state's unemployment law, for whom the claimant last worked or the last person for whom the claimant actually worked if the claimant worked for that person for at least 30 hours during a week. The bill author has also informed the committee that the 30-hour element of this definition allows opportunistic individuals to create a new last employer if separation from their actual last employer would be disqualifying; for example, an individual might work for a neighbor for 30 hours and claim the individual was laid off due to lack of work, or the individual can simply make up an employer so their side of the story is the only evidence considered by TWC. C.S.H.B. 3699 seeks to address this issue and strengthen the integrity of the state's unemployment benefits system by revising the statutory definition of "last work" and "person for whom the claimant last worked."

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 3699 amends the Labor Code to revise the meaning of "last work" and "person for whom the claimant last worked" when used in connection with an initial claim for unemployment compensation benefits as follows:

· removes from the meaning the last person for whom the claimant actually worked, if the claimant worked for that person for at least 30 hours during a week; and

· with respect to those terms referring to the employer for whom the claimant last worked:

o removes the specification that employer is defined by the unemployment law of any other state as an alternative to being defined by the Texas Unemployment Compensation Act; and

o specifies that this meaning applies unless otherwise provided by state or federal law.

C.S.H.B. 3699 applies only to a claim for unemployment compensation benefits filed with the Texas Workforce Commission on or after the bill's effective date. A claim filed before the bill's effective date is governed by the law in effect on the date the claim was filed, and the former law is continued in effect for that purpose.

EFFECTIVE DATE

January 1, 2026.

COMPARISON OF INTRODUCED AND SUBSTITUTE

C.S.H.B. 3699 differs from the introduced in minor or nonsubstantive ways by conforming to certain bill drafting conventions.