Part 20.
TEXAS WORKFORCE COMMISSION
Chapter 815.
UNEMPLOYMENT INSURANCE
Subchapter C. TAX PROVISIONS
The Texas Workforce Commission (Commission) proposes the repeal of
40 T.A.C. §815.132 titled The Rate and Collection of the Additional Tax
and new §815.132. Computation of Unemployment Obligation Assessment for
Chapter 815. Unemployment Insurance, Subchapter C. Tax Provisions, (40 T.A.C. §815.132)
concerning the bonding provisions as authorized under Subchapter F. Issuance
of Financial Obligations for Unemployment Compensation Fund (compensation
fund), Texas Labor Code Chapter 203, as added by Article 6 of Senate Bill
280, 78th Legislature, Regular Session, 2003.
The purpose of the rule is to set forth the provisions applicable to the
computation of unemployment obligation assessment provisions added to the
Texas Labor Code. The Legislature has made the following findings. It is an
essential governmental function to maintain funds in an amount sufficient
to pay unemployment benefits when due. At the time of the enactment of Article
6 of Senate Bill 280, 78th Legislature, Regular Session, 2003 borrowing from
the federal government was the only option available to obtain sufficient
funds to pay benefits when the compensation fund is depleted.
The Legislature also determined that alternative methods of replenishing
the compensation fund may reduce the costs of providing unemployment benefits
and employers' cost of doing business in the state; and that funds representing
revenues received from the unemployment obligation assessment authorized under
Article 6 of Senate Bill 280, 78th Legislature, Regular Session, 2003 and
any income from the investment of those funds are not state property. The
purpose of Article 6 of Senate Bill 280, 78th Legislature, Regular Session,
2003 (SB280) is to provide appropriate methods through which the state may
continue the unemployment compensation program at the lowest possible cost
to the state and employers in the state.
Insolvency of the compensation fund has traditionally been addressed by
borrowing from the Federal trust fund using a line of credit with the U.S.
Department of the Treasurer. The expense associated with this type of borrowing
may be more costly than with various commercial borrowing options. SB280 provides
the agency with options for borrowing funds during periods of compensation
fund insolvency. The borrowing process provides that the Agency must collect
the unemployment obligation assessment to pay for the advanced interest and
bond obligations when due. To facilitate this process, new rule §815.132
sets out the formulas for determining the unemployment obligation assessment
rate.
Texas Labor Code §203.105, V.T.C.A. provides that the Commission shall
collect an unemployment obligation assessment, also referred to as assessment,
from each employer eligible for an experience tax rate. An assessment rate
will be calculated if, after January 1 of a year, an interest payment on an
advance from the federal trust fund will be due and the estimated amount necessary
to make the interest payment is not available in the obligation trust fund
or is not otherwise available. In addition, an assessment will be collected
if bond obligations are due and the amount necessary to pay in full those
obligations, including bond administrative expenses, is not available in the
obligation trust fund or is not otherwise available.
When the Commission determines that an assessment must be collected after
January 1 of a year, the Commission will compute the assessment rate using
the formulas set out in the rule before November 20th of the year prior to
the year of the assessment. This rate will be published in the
Texas Register
.
These assessments will be collected quarterly in the same manner as provided
in §815.109 of this chapter (relating to Payment of Contributions and
Reimbursements). The formulas in the rule will insure that the Commission
will collect adequate revenue to satisfy bond obligations and advance interest
payments when due.
Randy Townsend, Chief Financial Officer, has determined that for each year
of the first five years the rule will be in effect the following statements
will apply:
There are no additional estimated costs to the state and to local governments
expected as a result of enforcing or administering the rule;
There are no estimated reductions in costs to the state and to local governments
as a result of enforcing or administering the rule;
There are no estimated losses or increases in revenue to the state or local
governments as a result of enforcing or administering the rule, except that
the funds raised by the assessment will be used to pay advanced interest or
bond obligations;
There are no foreseeable implications relating to costs or revenue to the
state or local governments as a result of enforcing or administering the rule,
except that the funds raised by the assessment will be used to pay advanced
interest or bond obligations, including administrative costs; and
There are no anticipated economic costs to persons required to comply with
the rule.
Mr. Townsend, Chief Financial Officer, has determined that there is no
adverse impact on small businesses as a result of enforcing or administering
this rule required by statute.
LaSha Lenzy, Director, Unemployment Insurance and Regulation Division,
has determined that for each year of the first five years that the rule will
be in effect the public benefit anticipated as a result of the adoption of
the proposed rule will be the timely payment of interest payments on funds
borrowed from the Federal Trust Fund and the bond obligations.
James Barnes, Director, Labor Market Information, has determined that there
is no foreseeable negative impact upon employment conditions in this state
as a result of this proposed rule.
Comments on the proposed section may be submitted to John Moore, General
Counsel, Texas Workforce Commission, 101 East 15th Street, Room 608, Austin,
Texas 78778; Fax Number 512-463-2220; or e-mailed to john.moore@twc.state.tx.us.
Comments must be received by the Agency no later than thirty (30) days from
the date this proposal is published in the
Texas
Register
.