HBA-EDN, SEP H.B. 2029 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2029 By: Yarbrough Economic Development 3/6/2001 Introduced BACKGROUND AND PURPOSE The 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 places the tribes back 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 the payment of reimbursements after the expiration of the following tax year following the date of losing the option if the tribe has timely paid all contributions during that tax year, and there are no contributions, payments, or penalties owed by the tribe (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 for which coverage is terminated or reinstated under these provisions (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 On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.