r 

OFFICE OF THE A-ITORNEY GENERAL OF TEXAS 

AUSTIN 

. . 

Hen. Olauae A. roilliaas 

ahairman and ExsoutiTo~Pfreotor 

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’ andOr i3UOh 8 ~.h?itW Or the mkfIi aOVOWZUId Or both, ma~r 

oenatlt~te.@s~b&s Z&r; the payment OS benet~ts through a 

&ngU appropriabe agenay- antler term% whloh the -Commission 

ffitde'will be.fair~an&~rsasonable as to all artsctad interests 

and~dll not be llabls in any substantial loss to the Fund.* 
52 

Bon, Cleudk A. 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 oompensation 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$!srenoef 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 

the 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 unemploymsnt 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 A. Wllllena, pegs 3 

we may transnlt, by aeena or a warrant drawn by the 

Uomptraller on the State Treaaorer, to 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 detamin5tlon or oonetruoti~ of Seation 17a, 

(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 

5221~17g, subaeotion8 t1,, (21, and 11 3 ) v. d. 0. 8.)‘0r Our 

uttStE.pl5ymOrlt ~tXitpCUl8&tiOtt Ad dm.ttO8 “Om~~oytwnt”, and it is 

Obaemed that Subaeotlona (a) and (3) tharaor~daal prlaurI.ly 

with servIoe8 parformed under oartain oo@itIona both wIthIn 

and. wltfmut the Stat06 They read aa rollaa, quoting: ~~OIQ the 

orrioial oopy of the Taxa Unamploymaat Oompenaation Aott 

v(2) The term tamploymant* shall iholude en indIviduol’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 is 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 oontrolled, fa in thla state; or (Ii) the baas of operations 

or plaoa from whioh suoh seniee la direoted ore aontrolled 

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) 

of 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 A. 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 of 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 oontributiona ere not. raquirad 0.tka paid under an amploymant oonpan8atian 

aot or anj othar &ate, In other worda it is designed to provide 

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 or 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 raspaob to whloh oantributiona are not required uu& paid under the 

laua of any other state, buttha employee 16 a rasidant of this 

State. To exprase it another way, the raaiprooal provision proridad 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 aooruing in one or Bulre other 
lion. Olauda A. WULlanua, page 9 

55 

I &ate6 through a efmtrallg oonstituted agsnop 

I 

i 

both as to ooteiage'&aamant8 with respaot ta Y i?%%%ty 

I 

and in the papant of bmeitt liabilitJr, thus iaoilltatiug 

and ~~iE~llfyl6g the aUmh56tmtlon af the law where interstate 

ralatiaf#hip beaamas sn imports& fuator. 

We have tien at S&IW pains to 6mdysa what we oonoeiva to be t.ha partinant provisions of ouy Unamployaant Coaensstlon 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 bf our st6tutea defining wasu&oyaant", es they are samewhsb lntriaste,~it w4J.l not neoessarkly 

! datrsot frastha two asin quastisnswe~ must! daaide and the oanelusions 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 of unaaplop 

1 

ment benefits against amployers~ aooounts for experlanoe rating 

pprpOSOS? 

We shsll iirst oonslder whether or 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~ set but the requirement6 to be inoorpixstad 

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 speoifloslly oanfarrea upoqthe Oasunission by Seation 17a, auprs, oi our 

Unamployraant Osmpsnsation Aot. 

Tha second question is more diffioult to salve fsr 

there is aoma laok of uniformity under the 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 6 

may be obdatad and 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 

payaant of b6nefits enaoted by the 48th Le&alatwe reads as 

fOl3.*lorS 1

"It; i6 6pOOifiOSuF grwided th6t 6ll money8 now 

on deposl~ to 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 

the oonolwion that the Texas ~nes@~oyment fhupeneation Oodesioa 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 reimburse'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