HBA-RBT H.C.R. 132 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.C.R. 132
By: Alexander
Economic Development
4/7/1999
Introduced



BACKGROUND AND PURPOSE 

The federal unemployment tax was imposed under the Federal Unemployment Tax
Act in 1935 as part of New Deal social legislation for the purpose of
encouraging the states to enact unemployment compensation laws that met
federally mandated standards.  Texas employers have for many years paid
nearly three times more in taxes than the federal government has returned
in administrative grants.  An emergency temporary 0.2 percent Federal
Unemployment Tax Surtax authorized in 1976 accomplished its goal of
repaying the debt from that year's recession in 1987 and is no longer
needed, however it has remained in full effect and recently was extended
through the year 2007.  The United States Department of Labor has used the
threat of withholding these funds to compel the state to comply with its
directives, which has prevented the Texas Legislature from enacting
unemployment compensation laws that are more suitable to the needs of the
people of this state.  In addition to insufficient funding, the federal
control over programs that rapidly re-employ workers hinders the ability of
the State of Texas to adapt federally funded employment service programs to
the specific needs of state and local economies.  Texas has instituted an
innovative workforce development system that minimizes administrative costs
and maximizes the ability of communities to customize workforce development
services to local conditions.  The federal unemployment tax is a burden on
Texas employers and a drain on the state's economy, and federal control of
state unemployment insurance programs has impeded the state's efforts to
help the unemployed by hindering program effectiveness and the ability to
respond quickly to local and state needs. 

H.C.R. 132 respectfully urges the Congress of the United States to reform
financing of the Federal Unemployment Tax Act, provide for adequate funding
of the employment service so that employers can rapidly identify skilled
workers and job seekers can quickly be re-employed, repeal the temporary
0.2 percent surtax, and transfer control of state unemployment insurance
programs to the states.  Provides that the Texas secretary of state forward
official copies of this resolution to the president of the United States,
to the speaker of the house of representatives and the president of the
senate of the United States Congress, and to all members of the Texas
delegation to the congress with the request that this resolution be
officially entered in the Congressional Record as a memorial to the
Congress of the United States of America. 

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

H.C.R. 132 respectfully urges the Congress of the United States to reform
financing of the Federal Unemployment Tax Act, provide for adequate funding
of the employment service so that employers can rapidly identify skilled
workers and job seekers can quickly be re-employed, repeal the temporary
0.2 percent surtax, and transfer control of state unemployment insurance
programs to the states.  Provides that the Texas secretary of state forward
official copies of this resolution to the president of the United States,
to the speaker of the house of representatives and the president of the
senate of the United States Congress, and to all members of the Texas
delegation to the congress with the request that this resolution be
officially entered in the Congressional Record as a memorial to the
Congress of the United States of America.