Case Information

*1 OFFICE OF THE A-ITORNEY GENERAL OF TEXAS AUSTIN

. .

Hen. Olauae roilliaas

ahairman and ExsoutiTo~Pfreotor

r

departnyaut pon.thhe , 1944, rh&oh we quote 8iO raOt8 Md the exact iA Vermn'a- dioil ompon@etioti Aot, on nta.rsade as iollowst p pgtentlal‘rlght5 to beneilts aooumulated under.-ths:snplojnrarrt opmpeneatlOn Lana oi.several States Or both, ma~r Or’ andOr i3UOh 8 ~.h?itW Or the mkfIi aOVOWZUId oenatlt~te.@s~b&s Z&r; the payment OS benet~ts through a term% whloh the -Commission &ngU appropriabe agenay- antler ffitde'will be.fair~an&~rsasonable as to all artsctad interests and~dll not be llabls in any substantial loss to the Fund.* *2 Bon, Cleudk Wflliams, page 2

vThls seatlon oontaina two authorisationd~, the firet permitting raoiproaal ooverege agreements with respeot to tar liability and the seoond, dealing with benefit payments, reading aa iollows:

v*The Commission ie hereby authorized to enter into arrangenants with the appropriate agenoise of other 3tatss or the Federal Covernmant . . . whereby potential rights to benefits eoouavil.ated under the employment oompensa- tion law of several States or under suoh a law of the Federal Govertient,or both, any oonstituta the basis'ror the paymsnt or benefits through a ringle appropriate agency under terms whloh. the Cammleei~ Sinds will be fair and reasonable as to aJ.Laffaoted intaresta and will not result in any substantial~loss to the FIX&*

"The ~unamployment oompensatlon laws of other states hqve,the sama or stroller provisions and under euoh provisions the Intsrstate~Con$!srenoe of Employment Seourlty Agenolee hasprepared, a plan whereby,oleimants who,here aooumulated waga are(U.~s in several ciffarent states may be paid benefits through a single.sgsnoy. This plan will be operative with respeot to any particular state only after the.agenoy of suoh state subscribes to suoh plan. U&es this arrangement when e~olaimis filed in one stats; thatstate is to seoure trausaripte~ of the slaimant.~s wage oredlta from other states in whioh he may have aooumulateii oredits. The state having largeat. proportion of his wagaorsdlts will be known es the 'paying ateta.' On the basis of the olelmant(s total wage oredits, the *paying atats' will make a determination ok %be olalm in eooordanoswith its awn laws and will pay the oleimant aooordingly. The.other states where the olalmant had wage oredits will reimburse the 'paying state* for pert or the benefits paid ta the olelmant on a prop r&t+ basle.

That Is, it will transmit that portion OS ths total benerits paid to olaimant ourrespoading.to the ratio of olaI.mant*s wage oreOLts in that state to his total wage oredits.

Wonegs reqtzlaltioned from the aooount of the~stete of Texas In tha,.Unamployment Trust Fun& In tha United States Treesury,are depoeited vith the Treesurar of th6 State of Texae to be us&by this Caaunfselon for the -payment or unem- ploymsnt benefits., ::r‘e requaet your edvloe es to whether or not th.f.s Gommlasion may enter gnto suoh reofprooel agreements as ara outlined above and, if we do enter into suah agreements,

. . . 53 Hohr Claude Wllllena, pegs 3

we may transnlt, aeena or a warrant drawn by the Uomptraller on the State Treaaorer, other atatea auoh amottnta au laay be due them by meson of their having paid bsnafita to olelmnta, beasd in part on auoh wage oradlta ea auah olaimtmts nay have with i&La OcmmIaaion.~

Our raaaeroh dlsoloaea that thea haa baan little, ii any,judIoial or oonetruoti~ of Seation 17a, detamin5tlon (Artlola 5221~15a, 7. A. 0. 8.) of our Texea Unemploymant Cam~atlon Aot, or aimiler aota of other states, all er~whloh era aubatantlally the eew aa our own. Of oour5et judIoiel aonatruotion and oonilrnetIon would be helpful, but wa do hot daea it aaaantlal to support the oonoluaiona wa have hare reaohedr Sootion 196 Subaaatloua 1 , (2) and (3) (Artlaio t1,, (21, and 3 ) v. d. 0. 8.)‘0r Our 5221~17g, subaeotion8

uttStE.pl5ymOrlt ~tXitpCUl8&tiOtt Ad dm.ttO8 “Om~~oytwnt”, it is that Subaeotlona (a) and (3) tharaor~daal prlaurI.ly Obaemed with servIoe8 parformed under oartain oo@itIona both wIthIn and. wltfmut Stat06 They read aa rollaa, quoting: ~~OIQ the orrioial oopy of the Taxa Unamploymaat Oompenaation Aott

v(2) The term tamploymant* shall iholude en indI- viduol’a entire 8er~lo0, perrormed within or both within atta dtht this ‘atate, tit

*.(A) The sarvIoe Is looallaed in this etatat or: v(B) The aervfoe not looallaad In eny stats but aone or ths senloe Is puforaed in this state and (I) the baaa of oparatlona, or if there la 110 base of operations than the plaos from w hi oh au& 8WvIaa la direoted or oon- the baas of operations trolled, fa in thla state; (Ii) from whioh suoh seniee la direoted ore aontrolled or plaoa Is not in any state In whloh awe part of the aenioe is petiormad but the lndlvlduelta resIdenos la It~thia stats.

“(3) (A) Servioe not ooverad under Paragraph (2) thla sub-5eotion end parfarn89d antirely without this stats, ulth reapeot to no pert or whioh oontrlbutions are required end paid under en,unamployment oomponaatlon lew or eny other state shall be deemad to be amployment subjeot to this Aoi if the Individual performing auoh aenIoe8 la a resident of’ this atate end tha Commission approvea the eleotion of the amploylng unit for whom auoh aervloes are parrormaa that the entire aervioe of suoh indlviduel shall be deemed to be employment sub&at to this Aot.

mm. Claude Wuliaas, Page 4

“(B) Sarviaae oovatiad by raalpraaal agreemanta authartiad bp thle dot batwaen, the CbmaUsion and the aeana~ aharged with the adminlWu8ion o f any other a&da of Iaderal tU+aplaymant oompansation law, pursuant to whloh all sartiaes perfarmed by an individual tar an amplaying unit ara deamad to ba perform&d antirely within this (Ibute, shall be daamed to ba anploymqnt, if th. Cammilralon haa approved an aleotion the amplow unit for whom suoh earrioas ware

uhioh the ~nntiti mrvloe of suoh ~~~lp~~‘t~

pariod oovarad by suoh bleation is deemed to be smploymant subjaat to thla Aot.”

It im to be noted that Subsaotfon (3)‘ipi Qi+idad into psrsgraphs A and B, reclpsotfoely. ParagrQh A is obviously daaignad to oo?er eerrtcras purformad antiraly without tha State by a’reddant oi this State, but with respectt to whioh oontribu- tiona ere not. raquirad 0.tka paid under an amploymant oonpan8atian aot or anj othar &ate, designed to provide In other worda it that a rbs%didefit or this State is not ta ba.daprivad of the benefits OS the law, although ~a.1 of the serviooa perrormad by him may ba in another state* Paragraph B of Sub$aotlon (.3) apaoifi~ally owers aerrioas pariormad under reoiprooal agreamante authoriaad by Saotion L7a, auprn, or our State Unampleymant Gampansation Aet, and under this may rall oarvioaa performed in two mere states, and in euoh ouaes a8 the amployaa dose not qua$lfy under any of the praoading oonditions, that is, the errvioa”ia not looalixad in this Stats there la no base or operation or plaoa from whioh said eenfaa 1 s oontraotad in this Statej tha base oil operation or plaoe from whiiah such servioes am direotad la not in any abate, but the amp&oyaa is a resiaant of thle State; that tha I)eMiOe is~ peri'omdd ~tiral~ Without thi8 .State bUtZ with ra- spaob to whloh oantributiona are not required uu& paid under the laua of any other state, buttha employee 16 a rasidant of this To exprase it another way, the raaiprooal provision pro- State. ridad In Saatian l7a and paragraph B of 178, Subeaotion 3, supra, affords a math&d OS aooording banafite to employeea nat OthaXWiSa prwided for in the other defined tlefinitionsl of aamploymenta oontained in the Aot.

In the last analyaie, the purpose of thane inter&ate raolprooal provisiona, oommoa to moat all the atatas* unemployment oompensation aota, IO to prwitla a feasible and workable method by whioh one state my pay benefits in one or Bulre other aooruing

55 lion. Olauda WULlanua, page 9 a efmtrallg &ate6 through oonstituted agsnop

I both as ooteiage'&aamant8 with respaot ta Y i?%%%ty I i thus iaoilltatiug and in the papant of bmeitt liabilitJr, ~~iE~llfyl6g the aUmh56tmtlon af the law where interstate ralatiaf#hip beaamas sn imports& fuator. I

We have tien at S&IW pains to 6mdysa what we oon- oeiva to be t.ha partinant provisions of ouy Unamployaant Coa-

ensstlon Aat defining a~loynauzt~, not with the thought that % ey are not as r6ll undarrtood by you as by 06, but 66 a pr6d.b oate for our oonolu8ions upondab we oonoaiva to be the two Pain qua6tlono firr u6 to deeida,, Even ii we should be mistaken in some detail ih our 6milpl6 defining wasu&oy- bf our st6tutea aant", es they are samewhsb lntriaste,~it w4J.l not neoessarkly datrsot frastha two asin quastisnswe~ must! daaide and the oan- ! elusions we have raaohad. These qwstioxu are:

Flrat '- Bass tha’raeipraoal plan proposed run oountar in sny psrtloulsr to.Saatfon 303a of the Sooial Saourity Aot and Seotion 16O’)a of the IdhrnaX R~vmua 60607

Seoand“- 18 thera 6 osnfliot, or passlbility or oonfliot, rith,.fxir law prariding isr the oharging unaaplop ment benefits against amployers~ aooounts for experlanoe rating pprpOSOS? We shsll iirst oonslder whether not Saotioa 301s \ of tha.Sooial Saourlty Aot and Sastion 1603a of the Internal Revenue Oods oontsin provisions uhioh night present lagsl bsrriars to entering into suoh oooparatlre snd interstate plan.

Thasa tuo protl6le~ to be inoorpixstad set but the requirement6 in state lsws in onier that the state may raoaive htieral funds for unemploymant oampansstion administration, and in order that the employers of the state msy qtmlify for the ninety per oant iadarsl oredit. An examination of the Sooisl SsOtLrity Aot snd of the Internal Ravanua Oode will not in our view di601066 eny prohlbitary limitation6 that would disqualify our State by the adoption of a multi-state arrsngsmant undar the authority speoifl- oslly oanfarrea upoqthe Oasunission Seation 17a, auprs, oi our Unamployraant Osmpsnsation Aot.

Tha second question is more diffioult to salve fsr there aoma laok of uniformity under various State sots as to the order in whish the employers' aooounta sra ohargad for axpsrianoa rating purpoa~as. We believe, however, that thie

Olasde A. ~Wi$liams, psga may be obdatad 6afaguarded by the &~mi6si6n in aedcing raoi ootd agraeimnts +ith aa6tJur state or 6tate6 by that port r on 13s Sbotlon 17a, sup~m; cd iOilOW6Z

". . . under taras whioh the hI5ai66ion finds will be fair &sd r6aeosmbla q to all affeotad 1ntara6ts and will not result in any rub686ntial loss $6 the Fund.* That part of the apprapsiatlcm bill oovarlng the enaoted the 48th Le&alatwe reads as payaant of b6nefits fOl3.*lorS 1

"It; i6 6pOOifiOSuF grwided th6t 6ll money8 now on deposl~ the oradlti of the Uneaployll)snt hapan6ati~n Bpltd, and 'aai stoneye r66eir6d ior the, areilit o? suoh fun!, sr& hereby appropflated fsr tl&a Qsymsnt of bansiits and refunds as autthoriaed by the prwf6ion6 of the 'Dnaaploywnt Uaapensatian Law.*

Z'rom the foregolo& it tollaws thstwa hale resohad oonolwion that the Texas ~nes@~oyment fhupeneation Oode-

sioa is authoriced to enter into reotproasl agraanant6with othar states, suoh 66 outlinad'ln yollr letter, and that the.

Comptrsllar of Publio A666u686 would be authariead to issue warrants, .upon proper oertirioate from the U~mi1i6sion, ta reim- burse'suah oooparating states, for:thci pro rata sbsra paid by thea in our beheli, aoting as the da6lgu6tad oentr6.l and alasring agoner, ma you are aooordis& 66 ad*lsed.

_ ;” P7-Lollar Aeeistant