S.B. No. 679
 
AN ACT
relating to the use of certain surplus revenue in the unemployment
compensation fund.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Subsection (a), Section 203.102, Labor Code, is
amended to read as follows:
       (a)  The obligation trust fund is a dedicated trust fund
outside of the state treasury in the custody of the comptroller.  
The obligation trust fund is composed of:
             (1)  revenue received under Section 203.105; and
             (2)  any surplus revenue transferred from the
compensation fund under Section 204.065.
       SECTION 2.  Subchapter D, Chapter 204, Labor Code, is
amended by amending Section 204.065 and adding Sections 204.0651
and 204.0652 to read as follows:
       Sec. 204.065.  USE OF SURPLUS [CREDIT].  (a)  If the amount
in the compensation fund on a tax rate computation date is more than
the ceiling of the compensation fund, the commission may use all or
part of that surplus to pay outstanding bond obligations as
provided by this section or to provide a surplus credit or a surplus
credit rate as provided by Sections 204.0651 and 204.0652 to an
employer entitled to an experience rate on the computation date.
       (b)  If, on the tax rate computation date, there are
outstanding bond obligations as described by Subchapter C, Chapter
203, including bond administrative expenses, the commission may
transfer all or part of the surplus described by Subsection (a) to
the obligation trust fund under Section 203.102 for payment of
those obligations.  The amount transferred under this subsection
may not exceed any amount transferred to the unemployment
compensation fund under Section 203.255(b)(2).
       (c)  To the extent that any portion of the surplus is not used
to pay bond obligations, the commission shall use that amount to
compute:
             (1)  a surplus credit under Section 204.0651; or
             (2)  an annual surplus credit rate under Section
204.0652.
       (d)  In determining the use of any surplus, the commission
shall exercise the options that the commission determines to be in
the best interests of the state's employers and workers.
       Sec. 204.0651.  SURPLUS CREDIT.  (a)  The commission may use
any portion of the surplus under Section 204.065 that is not used to
pay bond obligations to compute a surplus credit for an employer
entitled to an experience rate on the computation date, [is
entitled to a credit] to be applied beginning with contributions
for the first quarter of the following year.
       (b)  The amount of the surplus credit is computed by
multiplying the surplus ratio computed under Section 204.066 by the
employer's contributions due for the four calendar quarters ending
the preceding September 30.
       (c)  An employer may not apply a surplus credit against
delinquent contributions.  A surplus credit may not be applied
until the employer has paid any delinquent contributions.
       Sec. 204.0652.  SURPLUS CREDIT RATE.  (a)  If the commission
does not compute a surplus credit under Section 204.0651, the
commission may use any portion of the surplus under Section 204.065
that is not used to pay bond obligations to compute an annual
surplus credit rate for an employer entitled to an experience rate
on the computation date.
       (b)  The surplus credit rate is computed by multiplying the
surplus ratio computed under Section 204.066 by the employer's
general and replenishment tax rates for the preceding year.
       (c)  The surplus credit rate shall be subtracted from the sum
of the general and replenishment tax rates.  The remainder may not
be less than zero.  The results shall be rounded to the nearest
hundredth.
       (d)  An employer may not receive a surplus credit rate if any
delinquent contributions are due on the contribution date, but is
eligible for a surplus credit rate beginning on the calendar
quarter following the quarter in which the delinquent contributions
are paid.
       SECTION 3.  Subsection (b), Section 204.066, Labor Code, is
amended to read as follows:
       (b)  The numerator is computed by subtracting the ceiling of
the compensation fund from the balance of the compensation fund and
subtracting from that amount any amount used to pay bond
obligations under Section 204.065(b).
       SECTION 4.  Subchapter D, Chapter 204, Labor Code, is
amended by adding Section 204.067 to read as follows:
       Sec. 204.067.  ADJUSTMENTS TO RATE.  The commission, at its
own discretion, may adjust a rate under this subchapter.
       SECTION 5.  This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution.  If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2007.
____________________________________________________________
President of the Senate             Speaker of the House
       I hereby certify that S.B. No. 679 passed the Senate on
April 12, 2007, by the following vote:  Yeas 31, Nays 0.
______________________________ 
   Secretary of the Senate
       I hereby certify that S.B. No. 679 passed the House on
April 23, 2007, by the following vote:  Yeas 141, Nays 0, one
present not voting.
______________________________ 
   Chief Clerk of the House
Approved:
______________________________ 
______________________________ 
            Date
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          Governor