From the Office of State Senator Rodney Ellis

For Immediate Release
May 23, 1997
Contact: Rick Svataro, (512) 463-0113

Legislation Providing Incentives for Businesses to Hire Welfare Recipients Signed Into Law

AUSTIN, Tx. -- Legislation to provide incentives for businesses to hire welfare recipients was signed into law by Governor George W. Bush on Friday, May 23, 1997. The measure, Senate Bill 1113 by Senator Rodney Ellis (D-Houston) and State Rep. Richard Raymond (D-Benavides), improves the state's tax refund program to encourage more businesses to hire and retain welfare recipients.

"Texas must do more to provide welfare recipients with opportunities to make the most of their own lives," Ellis said. "The real challenge of welfare reform is ensuring that new jobs are available and that families have the tools they need to succeed."

The lawmakers said the legislation would improve the state tax refund program by providing employers with additional insurance options to make it easier for them to qualify for state tax refunds. The legislation also designates the Texas Workforce Commission as the lead agency in promoting awareness of the state tax refund program as well as other federal tax incentives.

"This bill provides employers with realistic incentives to actively seek out and hire our public assistance recipients," Raymond said. "It calls for an investment in their future, and my hope is that under the provisions of this bill, more Texans will obtain meaningful employment and ultimately achieve self-sufficiency."

According to the Texas Comptroller of Public Accounts, the tax incentive program allows businesses to apply for a state tax refund for each welfare recipient hired and employed for one year. The refund is calculated as 20 percent of the worker's annual salary up to a maximum of $2,000 per employee. For a business to be eligible, the employer must also provide health insurance for the employees.

Ellis and Raymond said the program has been underutilized because many employers' insurance policies did not meet the strict requirements of the law. Their legislation would allow greater flexibility regarding insurance policies accepted under the program.

"We want to do everything we can to encourage more businesses to hire welfare recipients," Ellis said. "Improving the state's tax refund program is good for business and good for families on public assistance."