By: Creighton S.B. No. 1950

(In the Senate - Filed March 5, 2025; March 17, 2025, read first time and referred to Committee on Economic Development; May 5, 2025, reported adversely, with favorable Committee Substitute by the following vote: Yeas 3, Nays 1; May 5, 2025, sent to printer.)

COMMITTEE SUBSTITUTE FOR S.B. No. 1950 By: Sparks

A BILL TO BE ENTITLED

AN ACT

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.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 207.021, Labor Code, is amended by amending Subsection (a) and adding Subsections (a-1) and (a-2) to read as follows:

(a) Except as provided by Chapter 215, an unemployed individual is eligible to receive benefits for a benefit period if the individual:

(1) has registered for work at an employment office and has continued to report to the employment office as required by rules adopted by the commission;

(2) has made a claim for benefits under Section 208.001;

(3) is able to work;

(4) is available for work;

(5) [is actively seeking work] in accordance with rules adopted by the commission:

(A) is actively seeking work;

(B) during each week of the benefit period, performed a combination of the following work search activities, subject to verification by the commission:

(i) completed and submitted an application for a job, other than an application submitted while attending a job fair;

(ii) submitted a resume to an employer that advertised an active job opening;

(iii) attended a job fair;

(iv) participated in a job interview or skills test conducted by a potential employer;

(v) after submitting a resume or application or participating in a job interview, responded to an employer's inquiry; or

(vi) participated in a work search or professional training sponsored or approved by the commission; and

(C) has had the individual's identity verified by the commission in accordance with rules adopted under Subsection (a-2);

(6) for the individual's base period, has benefit wage credits:

(A) in at least three [two] calendar quarters; and

(B) in 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 [six] times the individual's benefit amount;

(8) has been totally or partially unemployed for a waiting period of at least seven consecutive days; and

(9) participates in reemployment services, such as a job search assistance service, if the individual has been determined, according to a profiling system established by the commission, to be likely to exhaust eligibility for regular benefits and to need those services to obtain new employment, unless:

(A) the individual has completed participation in such a service; or

(B) there is reasonable cause, as determined by the commission, for the individual's failure to participate in those services.

(a-1) The commission by rule shall prescribe the minimum number of work search activities an individual must perform under Subsection (a)(5)(B) during each week. The rules may not require an individual to perform fewer than five work search activities during each week.

(a-2) The commission by rule shall prescribe the process for verifying an unemployed individual's identity under Subsection (a)(5)(C). The rules must provide for, at a minimum:

(1) the adoption and use by the commission of a statistically valid and unbiased methodology to assess the fraud risk of each claim for unemployment benefits;

(2) an annual audit of the methodology adopted under Subdivision (1) that includes an assessment of the methodology's effectiveness; and

(3) the adoption and use by the commission of a mechanism to verify the identity of an individual using the individual's government-issued identification if the individual's claim for unemployment benefits is determined by the commission to be a pervasive fraud risk using the methodology adopted under Subdivision (1).

SECTION 2. Section 207.047(a), Labor Code, is amended to read as follows:

(a) An individual is disqualified for benefits if during the individual's current benefit year, the individual failed, without good cause, to:

(1) apply for available, suitable work when directed to do so by the commission;

(2) accept suitable work offered to the individual; [or]

(3) return to the individual's customary self-employment, if any, when directed to do so by the commission; or

(4) respond to an employer's request for an interview or to attend a scheduled interview for suitable work.

SECTION 3. Section 208.021(b), Labor Code, is amended to read as follows:

(b) For each valid initial claim, the commission shall determine:

(1) in accordance with rules adopted by the commission under Section 207.021(a-2), the claimant's identity;

(2) the claimant's benefit year;

(3) [(2)] the benefit amount for total unemployment; and

(4) [(3)] the duration of benefits.

SECTION 4. Subchapter B, Chapter 208, Labor Code, is amended by adding Section 208.0211 to read as follows:

Sec. 208.0211. DETERMINATION OF CLAIM VALIDITY. (a) In determining the validity of a claim under Section 208.021, the commission shall cross-check all initial and additional claims against:

(1) the integrity data hub operated by the National Association of State Workforce Agencies;

(2) the national directory of new hires maintained by the federal Office of Child Support Enforcement and any directory of new hires maintained by this state;

(3) death records maintained by this state;

(4) records of persons who are incarcerated maintained by the Texas Department of Criminal Justice and the Federal Bureau of Prisons; and

(5) the Systematic Alien Verification for Entitlements (SAVE) program, or a successor program.

(b) On confirmation that an individual no longer has a valid claim, the commission shall suspend the payment of benefits immediately.

(c) Nothing in this section may be construed as prohibiting the commission from developing or implementing additional measures to determine the validity of a claim under Section 208.021.

SECTION 5. Sections 214.003(a) and (b), Labor Code, are amended to read as follows:

(a) 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 this subtitle for the person's qualifying for the benefit is not fulfilled or the person is disqualified from receiving the benefit:

(1) the person forfeits the:

(A) benefit received; [and]

(B) rights to benefits that remain in the benefit year in which the nondisclosure or misrepresentation occurred; and

(C) rights to any benefits under this subtitle until the earlier of:

(i) the end of the fifth calendar year following the last day of the benefit year in which the nondisclosure or misrepresentation occurred; or

(ii) the date that the commission recovered from the claimant any benefits received by wilful nondisclosure or misrepresentation of a material fact and any penalty imposed under this section; and

(2) the commission shall require the person to pay a penalty in an amount equal to 15 percent of the amount forfeited under Subdivision (1)(A).

(b) If a person attempts to obtain or increase benefits by a nondisclosure or misrepresentation as provided by Subsection (a), the commission shall [may] cancel the person's right to benefits that remain in the benefit year in which the nondisclosure or misrepresentation occurred and the person shall 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. The changes in law made by this Act apply only to a claim for unemployment compensation benefits filed with the Texas Workforce Commission on or after the effective date of this Act. A claim filed before the effective date of this Act 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.

SECTION 7. This Act takes effect January 1, 2026.

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