HBA-EDN, SEP H.B. 2029 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 2029
By: Yarbrough
Economic Development
7/11/2001
Enrolled



BACKGROUND AND PURPOSE 

The federal Consolidated Appropriations Act 2001 (Act), signed into law
December 21, 2000, made amendments affecting current federal and state
unemployment insurance laws retroactive to December 21, 2000.  In Texas,
prior to January 1, 1995, Indian tribes were treated as political
subdivisions and had the option to elect reimbursing status for
unemployment benefits.  In 1995, the United States Department of Labor
(DOL) notified the Texas Workforce Commission (TWC) that classifying Indian
tribal councils as governmental entities and allowing them to pay
reimbursements was not in compliance with DOL regulations, and TWC changed
the tribes' status accordingly.  The Act essentially returned the tribes to
the status they held prior to 1995.  House Bill 2029 modifies provisions
relating to unemployment insurance to bring Texas into compliance with
regulations mandated by federal law under the Act.  

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. 

ANALYSIS

House Bill 2029 amends the Labor Code to provide that employment, as
described by the Texas Unemployment Compensation Act, includes services
performed in the employ of an Indian tribe unless those services are: 

_certain services in the employ of a political subdivision or of an
instrumentality of a political subdivision wholly owned by one or more
political subdivisions; 

_services in the employ of a foreign government or of an instrumentality
wholly owned by a foreign government; or  

_services that are performed as a part of an unemployment work-relief or
work-training program, assisted or financed in whole or in part by an
Indian tribe, by an individual receiving the work relief or training.   

The bill provides that benefits based on service in the employ of an Indian
tribe are payable in the same amount, on the same terms, and subject to the
same conditions as benefits paid on the basis of other service under the
Texas Unemployment Compensation Act (Secs. 201.048, 201.063, 201.067, and
207.009).    
H.B. 2029 authorizes a tribe to elect to pay reimbursements for benefits
instead of contributions and sets forth provisions for a tribe to make such
an election.  The bill provides that a tribe that fails to make a required
payment, including payment of penalty and interest, before the 91st day
after receiving notice of the payment loses the option to pay
reimbursements for the following tax year unless the Texas Workforce
Commission (TWC) receives payment in full before the date contribution
rates for that tax year are computed.  A tribe that loses the option to pay
reimbursements is authorized to resume that option if, after the expiration
one year following the date of losing the option, the tribe has timely paid
all contributions, and  no contributions, payments, penalties, or interest
remains outstanding (Secs. 205.001 and 205.004).   

The bill requires the total amount of extended benefit payments that are
attributable to service in the employ of a tribe and not reimbursed by the
federal government to be charged to the tribe (Sec.  209.0845).  The bill
sets forth guidelines for a notice of payment or delinquency provided to a
tribe (Sec. 213.010).   

The bill requires a tribe subject to the Texas Unemployment Compensation
Act to pay contributions under the same terms and conditions as any other
subject employer unless the tribe elects to make reimbursements for
benefits instead of contributions (Sec. 204.010). 

Services performed for a tribe that fails to make a required payment, after
the exhaustion of all necessary collection activities by TWC, are not
considered to be employment. The bill authorizes services for a tribe that
uses coverage to be considered as employment if the tribe has paid all
contributions, payments and penalties.  The bill requires TWC to notify the
Internal Revenue Service and the United States Department of Labor of a
tribe that fails to make required payments (Sec 213.060).   

A tribe that was an employer immediately before the effective date of this
Act is authorized to make an election for reimbursements to be effective
for the 2002 calendar year (SECTION 12).      

EFFECTIVE DATE

June 11, 2001.