THEAYTORNEYGENERAL 

OF XAS 

April 6, 1962 

Mr. Richard L. Coffman 

Administrator 

Opinion No, WW-1301 

Texas Employment Commission Re: Compensation experienke to be 

TEC Building used under subsection 5(c,)(4) 

Austin, Texas of Article 5221b, in the event 

of an approved transfer of compensation ex erience under subsection 5(c) i) 7) of said Article 

with respect to acquisition on 

a date subsequent to the October 

1 computation date specified in 

subsection 5(d) of said Article 

Dear Mr. Coffman: under the stated facts. 

Your request for an opinion presents the following 

fact situation: 

On December 31, 1960, a subject employer, hereinafter 

called Employer A acquired the businesses and assets of two 

other (subsidiary I corporations, hereinafter called Employers B 

and C, respectively', through a merger and liquidation effective 

that date. 

The 1961 benefit wage ratio ,of Employer A is 8.5$, based 

upon compensation experience of this corporation, exclusively, for 

the 36-month period ended September 30, 1960. ,(Three-year benefit 

wages $3,0479317 divided by 3-year wages $36,21+8,580.) The benefit wage r,atio, 8.5$, modified by the State Experience Factor, 

yields a tax rate of 1,6$ for 1961. 

After Employer B and Employer C were merged into Employer A (the parent) on December 31, 1960, Joint Applications 

for Transfer of Compensatiqn Experience from Employers B and C 

to Employer A were promptly filed on or about January 30, 1961, 

as contemplated by subsection 7(c)(7) of the Texas Unemployment 

Compensation Act (Article 5221b-5(c),(7),V.C.S.). ,Both of these 

joint applications were approved by the Texas Employment Commission 

on March 8, 1961, and the compensation experience of the two predecessor corporations was transferred to the compensation experience account of the successor, Employer A, effective as of the 

date of the merger and acquisition, December 31, 1960. 

Employer B (now liquidated) had a benefit wage ratio of 

4.4% based upon benefit wages totaling $338,&24 and taxable wages 

totaling $7,730,987 for the 36-month period ended September 30, 1960. 
Mr. Richard L. Coffman - Page 2 - (WW-1301) 

Thus, this corporation would have a tax rate of 0.8% for 1961 

if its operations and employment had continued after December 

31, 1960. 

Employer C (now liquidated) had a benefit wage ratio 

of 1.8 based upon benefit wages totaling $2,173 and taxable 

wages totaling $114,807 for the 36-month period ended September 

30, 1960; Thus,,this corporation would have a tax rate of 0.4% 

for 1961, if it had continued operations and employment beyond 

December 31, 1960. 

The compensation experience generated by the two predecessor corporations during the three-year period preceding 

October 1, 1960, was relatively more favorable than the compensation experience generated by the successor Employer A during 

the same period. All of the compensation experience of Employer 

B and Employer C, including compensation experience for the fourth 

calendar quarter of 1960, has been transferred to the experience 

rating account of Employer A as of December 31, 1960, the effective 

date of the acquisitions by merger and liquidation. 

While the benefit wage ratio of Employer A standing alone 

is 8.5$, if the compensation experience of the predecessor corpor,ations were to have been combined with the compensation experience 

of Employer A, the 1961 tax rate computation for the combined 

companies would have produced a benefit wage ratio of 7.7% based 

upon total benefit wages of $3,3&7,914 and wages totaling $44,094,375 

for the 36-month period preceding October 1, 1960. This computation, had it been made, would have yielded a 1961 tax rate of 

1.4% based upon the combined compensation experience; 

You have requested an opinion concerning ,whether the 1961 

tax rate for the surviving parent corporation, Employer A, should 

be computed on the basis of the aggregate compensation experience 

of all three employers combined retroactively as of October 1, 1960. 

Section 7(d) of the Texas Unemployment Compensation Act 

(Art. 5221b-5(d), V.C.S.) expressly provides, "The computation 

date for &J experience tax rates shall be aa of October 1 of the 

year preceding the calendar year for which such rates are to be.;" 

effective I, (Emphasis supplied.) "As of" means "as if it 

were." Unitld'Siates v. Monroe-Van Helms Company 

(C.C.A. ,5th 1957) H orwitz v, New York Life Insurince Companv 

F.2d 295 (C.C.A. 4th 1935). Therefore, 

243 F.2d lo,&3 

although the computation 

is actually made sometime subsequent to October 1 as a matter of 

administrative necessity, it must be performed as if it were 

October 1 and can onlv take into consideration the f,act situation 

existing as of that date. Citv of Twin Falls v. Koehler, 63 Idaho 

562, 123 P.2d 715 (19421, 
Mr. Richard L, Coffman - Page 3 - (WW-1301) 

The computation date forexperience 

changed to October 1 in an enactment declared 

and indispensable to the proper and efficient 

of the Texas Unemployment Compensation Act."~ 

Leg*, p.,l359, ch, 460, Sec. 16.~ Previously, 

tax rates was 

to be "necessary 

administration 

Acts 1957, 55th 

the computation 

date was January 1, which created serious administrative problems~ 

since the tax rates became effective on the same date. Acts 1955, 

%thl$g*Aec. 5E*'Acts 1938 4th Leg 

p0 399 ch. 116 Sec. 5' Acts 1949, 51st Leg., p. 294 

the rat&s were cimputed as Af January-i, 

3rd C.S., p. 1993. When 

it was necessarily long 

after January 1 (and after the rates were already in effect) 

before the necessary information could be gathered, rates computed and employers notified. Computation of experience tax 

rates under the Texas Unemployment Compensation Act is not a 

simple matter, since each tax rate must take into consideration 

the amount of, benefit wages paid by emplogers and the amount of 

benefits paid out to unemployed individuals on a state-wide basis 

during a stated one-year period, as well as the individual employer's 

wage and corn ensation See 

Art. 5221b-5 Ii c), 

experience during a three-year period. 

V.C.S. Obviously, it contributed a great deal 

to the orderly and efficient administration of the Act for the 

legislature to change the computation date to October I, allowing 

the Texas Employment Commission ample time to compute experience 

tax rates before they went into effect. The change made it possible for the Commission to schedule its work in a more efficient 

manner and enabled employers to plan their business activities for 

the coming year on the basis of fixed tax rates. 

If experience tax rates were re-computed subsequent to 

October 1 when business acquiditions occur during the last three 

months of the year, the purpose of the legislature in providing 

for "all" rates to be computed as of October 1 would to some 

extent be frustrated. Records of the Texas Employment Commission 

reveal that several hundred such acquisitions occur during the 

last three months of each year. Since rates are now computed in 

the weeks immediately after October 1, a great many rates would 

have to be re-computed, and,in many cases, neither the employers 

concerned nor the Texas Employment Commission would have the 

benefit of knowing ,what the tax rates would be' before they went 

into effect on January 1. 

It should be noted that business acquisitions do not 

always result in lower 'rates; in fact, the smaller businesses 

being acquired frequently have less favorable compensation 

experience than the parent company. Thus, in many instances 

the successor employer does not have the same interest in 

obtaining the benefit of the predecessor's compensation experience 

at the earliest possible date as does Employer A in this case. 
Mr. Richard L. Coffinen - Page 4 - ~(~-1301) 

It was clearly the intention of the legislature to make 

the computation date for all experience tax rates October 1, for 

the plain words of the statute so state. A clear and unambiguous 

law should be enforced as it reads. Franklin v. Pietzsch, 334 

;?.;Ne214 (Civ. App., 1960, error ref. n.r.e.1,~ Catelv v. 

I) 

State Do&d of Insurance v. 

v 151 Tex. 5.88, 254 ;:;;2d 98 (1952). As was stated in 

q, 158 Tex. 612, 615, 315 S.W.2d 

279 281 (19581 'When we abandon the plain meaning of words, 

staiutory cons&action rests upon insecure and obscure foundations 

a$ beet." 

The question has been raised as to whether Section 7(d) 

of the Texas Compensation Act is inconsistent with 

Subsection 7 

Section 7(c) 

5221b-5, Subsection (c')(7) and (d), V.C.S.). 

reads in part as followsc 

"If an employing unit acquire@ all or a part of 

the organization, trade or business of an employer, 

such acquiring successor employing unit and such predecessor employer may jointly make written application 

to the Commission for,that compensation experience of 

such predecessor empl$yer which is attributable to 

the organization, trade or business or the part thereof 

acquired to be treated as compensation experience of 

such successor employing unit. . . . 

"If the application for transfer of experience 

is approved and the successor employing unit was an 

employer immediately prior to the acquisition, such 

successor shall say contributions from the date of the 

acauisition until the end of the calendar vear in 

which the acauisition occurred at the rate a?anlicable 

to the successor on the date of the acauisition. . . .I1 

(Emphaais supplied.) 

The above statute deals only with the tax rate of the 

successor employer during the remainder of the calendar year 

following an acquisition. It is silent as to the tax rate thereafter. Employer A contends that it can reasonably be inferred 

that the legislature intended for a new tax rate based upon 

the combined compensation experience of the employers to 

become effective after the expiration of the year in which 

the acquisition occurred because this portion of the statute 

only provides for the old rates to remain effective until the 

end of the year. However, this inference is countered by the 

express provisions of Section 7(d) of the Act, which was enacted 

subsequent to the portion of Section 7(c)(7) in question, quoted 

above. Acts 1957, 55th Leg., p. 1355, ch. 460, Sec. 4; Acts 1949, 

51st Leg., p. 293, ch. 148, Sec. 5D. It should be noted that 

the statute provides for only one computation of experience tax 

rates each year and expressly commands that the computation date 

for all such rates "shall be as of October 1." Art. 522lb-5(d), 

V.C.S. 
Mr. Richard L. Coffinan -,Page 5 - .(WW-13~01) 

Whenever possible, statutes and parts of statutes should 

be construed so as to eliminate conflict between their various 

provisions. ~If Section 7(c) (7)of the Texas Unemployment 

Compensation Act were co&rued as requiring a re-computation of 

experience tax rates to take into account business acquisitions 

occurring during the last three months of the year it would be 

in direct conflict with and re ugnant to Section 7[d) of the Act. 

Furthermore, since Section 7(d P ,was amended to its present form 

subsequent to the ena,ctment of the salient portion of Section 

7(c,)(7), if the two ssctions conflict it is Section 7(d) which 

must prevail. 39 Tex. Jur. 139, Statutes,.Sec. 74. 

The long-continued construction given these statutes 

by the Texas Employment Commission is entitled to be given wei&ht 

when consideration is being given to their proper meaning and 

effect. Reed v. Triolett. Countv 

(Civ. App. 

Judge. et al., 232 S.W.2d 169 

.DDlila~: :~2~~~~d~r~~!~~~S~~~i98;js~~~;,C~~~,,C~~~~~ke~~ 

(whenthe computatioi date ia; J%u&":)yand "un%r E",e statute 

now in effect the Commission has consistently refused to re-oompute 

experience tax rates to take into acoountbusineas acquisitions 

occurring subsequent to the computation date. 

Since the computation date for experience tazratea.was 

changed to October 1 in 1957 many hundreds of rates have been 

computed, and thousands of dollars in taxes have been collected on 

the basis of such rates, in cases involving business acquisitions 

occurring during the last calendar quarter of the year. If the 

Commission's inter retation of the statute were found to be 

erroneous at this f ate date , all such rates would have to be 

re-figured. Almost all of the rates would be changed. In many 

cases additional taxes would have to be paid; in other cases taxes 

would have to be refunded. These circumstances give added weight 

to the view that thi~,Cqmmiaaion'a interpretation of the statute 

should not be overruled without compelling reasons. 

Finally, the legislature has met in two regular sessions 

and numerous called seaaions since the computation date for experience tax rates was changed to October 1, yet it has not disturbed 

the Commiasion~s construction of the statute. 

of such construction may therefore be presumed. 

Legislative sanction 

Statutes, Sec. 92. 

39 Tex. Jur. 175, 

SUMMARY 

An acquisition subsequent to the October 1 

computation date specified in subsection 7(d) 

of the Texas Unemployment Compensation Act 
Mr. Richard L. Coffman - Page 6 - (WW-1301) 

does not affect the experience tax rate 

resulting from such computation. 

Sincerely youm, 

WILL WILSON 

Attorney General of Texas 

BY O+* 

Ernea$ Fortenberry 

Assistant 

EF/fb 

APPROVED: : : 

OPINION COMMITTEE 

Wr V. Geppert, Chairman 

F. C. Jack Goodman 

Thomas Burrua 

Dudley McCalla 

REVIEWED FOR,TBE ATTORNEY GENERAL 

BY: HOUGHTON BROWNLEE, JR.