HBA-TYH C.S.H.B. 3449 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 3449
By: Gutierrez
Economic Development
4/26/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, employers pay into the unemployment fund based on a variable
rate scale.  The Texas Workforce Commission (commission) computes each
employer's tax rate by dividing the amount of money that the state pays in
claims against that employer by the amount of taxable income that the
employer paid in the same period.  The commission then sets a minimum and
maximum tax rate. This year, the minimum is 0.24 percent and the maximum is
6.24 percent.  The law currently gives cotton ginning employers the choice
to pay the rate that the commission computes or a flat rate of 5.4 percent,
but the employers must choose which they will pay in advance.  Cotton
ginning employers are given this option because, by nature, they only
employ people seasonally.  Other crop preparation employers are not given
the same option even though they are primarily seasonal employers as well.
C.S.H.B. 3449 extends this exemption to fruit and vegetable packing sheds
that perform the same functions as cotton gins but on crops other than
cotton. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 204.007, Labor Code, as follows:

Sec. 204.007.  New Title: SPECIAL RATE; CERTAIN EMPLOYERS ENGAGED IN
AGRICULTURE.  Provides that this section applies to an employer identified
by the Texas Workforce Commission as classified in the Standard Industrial
Classification Manual published by the United States Office of Management
and Budget as Number 0723, crop preparation services for market.
Authorizes an employer subject to this section to elect to pay a
contribution at a total fixed rate of five and four-tenths percent instead
of paying a contribution computed on the specified tax rates.  Makes
conforming changes. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute modifies the original bill by changing the caption from
"relating to unemployment tax rate for crop preparation companies" to
"relating to payment of unemployment compensation tax contributions by
certain employers engaged in agriculture." 

The substitute modifies the original bill by adding a new SECTION 2
(effective date) and redesignating SECTION 2 (emergency clause) of the
original to SECTION 3. 

The substitute modifies the original bill in SECTION 1 (Section 204.007,
Labor Code) by changing the section title from "Special Rate - Cotton
Ginning and Other Crop Preparation Employers" to "Special Rate; Certain
Employers Engaged in Agriculture." 

The substitute modifies the original bill in SECTION 1 by making
nonsubstantive format changes and conforming changes.