BILL ANALYSIS

 

 

Senate Research Center	S.B. 1950
89R5085 RDS-F	By: Creighton
	Economic Development
	4/22/2025
	As Filed

 

 

 

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

 

According to the U.S. Department of Labor, Texas spent $1.3 billion on improper unemployment benefits during the COVID-19 pandemic (July 1, 2020�June 30, 2023). For March 2020 to April 2021 specifically, the Texas Workforce Commission (TWC) reported $411 million in benefits on about 63,000 unemployment claims that were later determined to be imposter fraud.

 

Texas' current statute on unemployment benefits leaves room for interpretation on the requirements for an individual to maintain their benefits, so there is concern that the system is being abused and people are choosing to accept state benefits rather than find employment.

 

S.B. 1950 amends the "actively seeking work" requirement for an individual applying for unemployment benefits to include a minimum of five specific steps to ensure they are actually seeking work. These steps include submitting a job application, submitting a resume for an advertised position, attending a job fair, participating in a job interview, or engaging in a job or skill training program. In addition, an individual will be disqualified for unemployment benefits if they fail to attend interviews or respond to an employer's request to schedule an interview.

 

This bill increases the base year requirement from two to three quarters of employment with recorded wages for claimants to qualify for benefits. Claimants will also be required to have earned wages equal to 37 weeks of benefits during the benefit year to re-qualify, ensuring they meet the same wage criteria as initially required to qualify for benefits.

 

To ensure the validity of a benefits claim, this bill also requires identity verification and requires TWC to cross-check all unemployment benefits claims against the National Association of State Workforce Agencies' Integrity Data Hub, state and federal new hire records, state death records, state and federal incarceration records, and federal immigration and citizenship records. 

 

This bill also directs TWC to establish a process that verifies a claimant's identity using government-issued identification, mandates immediate suspension of benefits for claimants found ineligible, and clarifies that nothing in this bill will limit TWC from implementing additional program integrity measures and practices to safeguard benefits.

 

This bill also increases penalties for fraudulent claims to include a mandatory five-year disqualification period. Currently, claimants must forfeit only benefits received due to fraud and lose eligibility during their current benefit year. There is also currently a penalty claimants must pay that is equivalent to 15 percent of the benefits they received fraudulently. These penalties will continue to remain in place.

 

As proposed, S.B. 1950 amends current law relating to the eligibility of certain individuals for unemployment benefits and the validity of certain claims for unemployment benefits submitted to the Texas Workforce Commission.

 

RULEMAKING AUTHORITY

 

Rulemaking authority is expressly granted to the Texas Workforce Commission in SECTION 1 (Section 207.021, Labor Code) of this bill.

 

SECTION BY SECTION ANALYSIS

 

SECTION 1. Amends Section 207.021, Labor Code, by amending Subsection (a) and adding Subsection (a-1), as follows:

 

(a) Provides that, except as provided by Chapter 215 (Shared Work Unemployment Compensation Program), an unemployed individual is eligible to receive benefits for a benefit period if the individual:

 

(1)-(4) makes no changes to these subdivisions;

 

(5) in accordance with rules adopted by the Texas Workforce Commission (TWC):

 

(A) is actively seeking work; and

 

(B) during each week of the benefit period, performed a combination of certain work search activities, subject to verification by TWC;

 

(6) for the individual's base period, has benefit wage credits in at least three, rather than two, calendar quarters and an amount not less than 37 times the individual's benefit amount;

 

(7) after the beginning date of the individual's most recent prior benefit year, if applicable, earned wages in an amount equal to not less than 37, rather than six, times the individual's benefit amount; and

 

(8)-(9) makes no changes to these subdivisions.

 

Makes a nonsubstantive change to this subsection.

 

(a-1) Requires TWC by rule to prescribe the minimum number of work search activities an individual is required to perform under Subsection (a)(5)(B) during each week. Prohibits the rules from requiring an individual to perform fewer than five work search activities during each week.

 

SECTION 2. Amends Section 207.047(a), Labor Code, as follows:

 

(a) Provides that an individual is disqualified for benefits if during the individual's current benefit year, the individual failed, without good cause, to take certain actions, including responding to an employer's request for an interview or to attend a scheduled interview. Makes nonsubstantive changes.

 

SECTION 3. Amends Section 208.021(b), Labor Code, to require TWC, for each valid initial claim, to make certain determinations, including the claimant's identity, and to make nonsubstantive changes.

 

SECTION 4. Amends Subchapter B, Chapter 208, Labor Code, by adding Section 208.0211, as follows:

 

Sec. 208.0211. DETERMINATION OF CLAIM VALIDITY. (a) Requires TWC, in determining the validity of a claim under Section 208.021 (Initial Claim Determination), to cross-check all new and recurring claims against certain records.

 

(b) Requires TWC, for purposes of determining a claimant's identity under this section, to establish an authentication mechanism to verify the identity of a claimant who files a claim with TWC. Requires that the authentication mechanism verify at least one form of government-issued identification submitted by the claimant.

 

(c) Requires TWC, on confirmation that an individual no longer has a valid claim, to suspend the payment of benefits immediately.

 

(d) Prohibits anything in this section from being construed as prohibiting TWC from developing or implementing additional measures to determine the validity of a claim under Section 208.021.

 

SECTION 5. Amends Sections 214.003(a) and (b), Labor Code, as follows:

 

(a) Provides that if, by wilful nondisclosure or misrepresentation of a material fact, whether the nondisclosure or misrepresentation is made by the person or for the person by another, a person receives a benefit when a condition imposed by Subtitle A (Texas Unemployment Compensation Act) for the person's qualifying for the benefit is not fulfilled or the person is disqualified from receiving the benefit, the person forfeits the rights to any benefits under this subtitle until the earlier of certain dates. Makes nonsubstantive changes.

 

(b) Requires, rather than authorizes, TWC, if a person attempts to obtain or increase benefits by a nondisclosure or misrepresentation as provided by Subsection (a), to cancel the person's right to benefits that remain in the benefit year in which the nondisclosure or misrepresentation occurred and requires the person to forfeit rights to any benefit under this subtitle until the end of the fifth calendar year following the last day of the benefit year in which the attempted nondisclosure or misrepresentation occurred.

 

SECTION 6. Makes application of this Act prospective.

 

SECTION 7. Effective date: January 1, 2026.