[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3024 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 3024
To reform the Federal unemployment benefits system.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 4, 2001
Mr. English introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To reform the Federal unemployment benefits system.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. EXTENDED BENEFITS TRIGGER.
(a) In General.--Section 203(d) of the Federal-State Extended
Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note) is
amended--
(1) in subparagraph (B) of paragraph (1), by striking ``5
per centum'' and inserting ``4 per centum'', and
(2) in the first flush sentence following paragraph (2), by
striking ``5'' and inserting ``4''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to weeks of unemployment beginning 6 months or more after the
date of the enactment of this Act.
SEC. 2. INCREASE AND DECREASE IN EARNINGS CREDITED TO STATE ACCOUNTS
WHEN STATES MEET OR FAIL TO MEET FUNDING GOALS.
(a) In General.--Section 904 of the Social Security Act (42 U.S.C.
1104) is amended by adding at the end the following new subsection:
``Increase and Decrease in Amount of Earnings Allocated to State
Accounts When States Meet or Fail to Meet Funding Goals
``(h)(1) If the average daily balance in a State account in the
Unemployment Trust Fund for any calendar quarter exceeds the funding
goal of such State, the amount otherwise creditable to such account
under subsection (e) for such quarter shall be increased by the
interest premium on such excess. If the average daily balance in such a
State account for any calendar quarter is less than the funding goal of
such State, the amount otherwise creditable to such account under
subsection (e) for such quarter shall be decreased by the interest
penalty.
``(2) Paragraph (1) shall not apply with respect to any interest
premium or interest penalty to the extent that such application would
result in an increase or decrease of more than $2,500,000 in the amount
creditable to any State account for any calendar quarter.
``(3) For purposes of this subsection, the term `interest premium'
means, for any calendar quarter--
``(A) with respect to the State with the largest percentage
value of excess of the average daily balance in the State
account in the Unemployment Trust Fund over the funding goal of
such State, one-half of one percent of the amount of such
excess, and
``(B) with respect to each other State, the product of--
``(i) the amount of the excess of the average daily
balance in the State account in the Unemployment Trust
Fund over the funding goal of such State, and
``(ii) the percentage which bears the same ratio to
one-half of one percent as--
``(I) the percentage value of such excess,
bears to
``(II) the percentage value of the excess
of the State referred to in subparagraph (A).
The Secretary shall make appropriate adjustments in the interest
premium for any calendar quarter if the aggregate interest premiums
payable for such quarter exceed the aggregate interest penalties for
such quarter.
``(4) For purposes of this subsection, the term `interest penalty'
means, for any calendar quarter--
``(A) with respect to the State with the largest percentage
value of excess of the funding goal of such State over the
average daily balance in the State account in the Unemployment
Trust Fund, one-half of one percent of the amount otherwise
creditable to such account under subsection (e), and
``(B) with respect to each other State, the product of--
``(i) the amount otherwise creditable to such
account under subsection (e), and
``(ii) the percentage which bears the same ratio to
one-half of one percent as--
``(I) the percentage value of the excess of
the funding goal of the State over such average
daily balance of such State, bears to
``(II) the percentage value of such excess
of the State referred to in subparagraph (A).
``(5) For purposes of this subsection, the term `funding goal'
means, for any State for any calendar quarter, the average of the
unemployment insurance benefits paid by such State during each of the 3
years, in the 20-year period ending with the calendar year containing
such calendar quarter, during which the State paid the greatest amount
of unemployment benefits.
``(6) For purposes of this subsection, the term `percentage value'
means--
``(A) with respect to any excess of the average daily
balance in a State account in the Unemployment Trust Fund over
the funding goal of such State, the percentage which such
excess bears to such funding goal, and
``(B) with respect to any excess of such funding goal over
such average daily balance, the percentage which such excess
bears to such funding goal.''.
(b) Conforming Amendments.--
(1) Amounts credited to state accounts.--Subsection (e) of
section 904 of the Social Security Act (42 U.S.C. 1104(e)) is
amended in the first sentence by inserting ``(as modified by
subsection (h))'' after ``a proportionate part''.
(2) Interest rate on repayment of advances determined
without regard to interest premiums or penalties on amounts
credited to state accounts.--Subparagraph (A) of section
1202(b)(4) of such Act (42 U.S.C. 1322(b)(4)) is amended by
inserting ``(determined without regard to section 904(h))''
after ``preceding calendar year''.
(c) Report.--Not later than 6 months after the date of the
enactment of this Act, the Secretary of Labor shall submit to the
Congress a report recommending sources of funding for the crediting of
interest premiums under subsection (h) of section 904 of the Social
Security Act (42 U.S.C. 1104), as added by this section, in the event
that the imposition of interest penalties under such subsection is
insufficient to fund such premiums.
(d) Effective Date.--The amendments made by this section shall
apply to calendar years beginning after December 31, 2004.
SEC. 3. INTEREST-FREE ADVANCES TO STATE ACCOUNTS IN UNEMPLOYMENT TRUST
FUND RESTRICTED TO STATES WHICH MEET FUNDING GOALS.
(a) In General.--Subparagraph (C) of section 1202(b)(2) of the
Social Security Act (42 U.S.C. 1322(b)(2)) is amended to read as
follows:
``(C) the average daily balance in the account of such
State in the Unemployment Trust Fund for each of 4 of the 5
calendar quarters preceding the calendar quarter in which such
advances were made exceeds the funding goal of such State (as
defined in section 904(h)).''
(b) Effective Date.--The amendment made by subsection (a) shall
apply to calendar years beginning after the date of the enactment of
this Act.
SEC. 4. STATE COLLECTION OF FEDERAL UNEMPLOYMENT TAX.
(a) In General.--Chapter 23 of the Internal Revenue Code of 1986
(relating to Federal Unemployment Tax Act) is amended by redesignating
section 3311 as section 3312 and by inserting after section 3310 the
following new section:
``SEC. 3311. STATE COLLECTION OF TAX.
``(a) In General.--At the election of any State which is certified
as provided in section 3304, each employer who pays contributions, with
respect to any wages, into an unemployment fund maintained under the
unemployment compensation law of such State shall submit the tax
imposed by this chapter with respect to such wages to such State rather
than to the Secretary.
``(b) Coordination With Depositary Requirements.--Payment under
subsection (a) of the tax imposed by this chapter with respect to any
wages shall be treated as timely paid for purposes of this title if
paid by the employer to the State at the same time as a timely paid
payment, with respect to such wages, of contributions into an
unemployment fund maintained under the unemployment compensation law of
such State.
``(c) Exception for Payments Not Timely Paid.--Subsection (a) shall
not apply to any payment of the tax imposed by this chapter which is
not paid by an employer on or before the last date on which such
payment would be treated as timely paid under subsection (b).
``(d) Federal Tax Transferred to Secretary.--Each State making an
election under subsection (a) shall transmit to the Secretary, at the
time and in the manner prescribed by the Secretary, the amount of the
tax imposed by this chapter which is submitted to such State under
subsection (a) and a copy of the State tax return of each employer
making such a submission. The Secretary may, after consultation with
such organizations or other entities as the Secretary considers
appropriate, prescribe regulations requiring that additional
information be submitted by such State with respect to the amount of
such tax payable by such employer.''
(b) Clerical Amendment.--The table of sections for chapter 23 of
such Code is amended by striking the item relating to section 3311 and
inserting the following new items:
``Sec. 3311. State collection of tax.
``Sec. 3312. Short title.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
SEC. 5. REQUIRED DISTRIBUTION OF STATE-SPECIFIC INFORMATION PACKETS.
(a) In General.--Subsection (a) of section 3304 of the Internal
Revenue Code of 1986 (relating to approval of State laws) is amended by
striking ``and'' at the end of paragraph (18), by striking the period
at the end of paragraph (19) and inserting ``; and'', and by adding at
the end the following new paragraph:
``(20) the State will distribute to unemployed individuals
State-specific information packets explaining unemployment
insurance eligibility conditions.''
(b) Effective Date.--The amendment made by subsection (a) shall
apply to certifications of States for 2002, except that section
3304(a)(20) of such Code, as added by subsection (a), shall not be a
requirement for the State law of any State prior to July 1, 2003, if
the legislature of such State does not meet in a regular session which
closes during the calendar year 2002.
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