[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3463 Enrolled Bill (ENR)]
H.R.3463
One Hundred Eighth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the twentieth day of January, two thousand and four
An Act
To amend titles III and IV of the Social Security Act to improve the
administration of unemployment taxes and benefits.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``SUTA Dumping Prevention Act of
2004''.
SEC. 2. TRANSFER OF UNEMPLOYMENT EXPERIENCE UPON TRANSFER OR
ACQUISITION OF A BUSINESS.
(a) In General.--Section 303 of the Social Security Act (42 U.S.C.
503) is amended by adding at the end the following:
``(k)(1) For purposes of subsection (a), the unemployment
compensation law of a State must provide--
``(A) that if an employer transfers its business to another
employer, and both employers are (at the time of transfer) under
substantially common ownership, management, or control, then the
unemployment experience attributable to the transferred business
shall also be transferred to (and combined with the unemployment
experience attributable to) the employer to whom such business is
so transferred,
``(B) that unemployment experience shall not, by virtue of the
transfer of a business, be transferred to the person acquiring such
business if--
``(i) such person is not otherwise an employer at the time
of such acquisition, and
``(ii) the State agency finds that such person acquired the
business solely or primarily for the purpose of obtaining a
lower rate of contributions,
``(C) that unemployment experience shall (or shall not) be
transferred in accordance with such regulations as the Secretary of
Labor may prescribe to ensure that higher rates of contributions
are not avoided through the transfer or acquisition of a business,
``(D) that meaningful civil and criminal penalties are imposed
with respect to--
``(i) persons that knowingly violate or attempt to violate
those provisions of the State law which implement subparagraph
(A) or (B) or regulations under subparagraph (C), and
``(ii) persons that knowingly advise another person to
violate those provisions of the State law which implement
subparagraph (A) or (B) or regulations under subparagraph (C),
and
``(E) for the establishment of procedures to identify the
transfer or acquisition of a business for purposes of this
subsection.
``(2) For purposes of this subsection--
``(A) the term `unemployment experience', with respect to any
person, refers to such person's experience with respect to
unemployment or other factors bearing a direct relation to such
person's unemployment risk;
``(B) the term `employer' means an employer as defined under
the State law;
``(C) the term `business' means a trade or business (or a part
thereof);
``(D) the term `contributions' has the meaning given such term
by section 3306(g) of the Internal Revenue Code of 1986;
``(E) the term `knowingly' means having actual knowledge of or
acting with deliberate ignorance of or reckless disregard for the
prohibition involved; and
``(F) the term `person' has the meaning given such term by
section 7701(a)(1) of the Internal Revenue Code of 1986.''.
(b) Study and Reporting Requirements.--
(1) Study.--The Secretary of Labor shall conduct a study of the
implementation of the provisions of section 303(k) of the Social
Security Act (as added by subsection (a)) to assess the status and
appropriateness of State actions to meet the requirements of such
provisions.
(2) Report.--Not later than July 15, 2007, the Secretary of
Labor shall submit to the Congress a report that contains the
findings of the study required by paragraph (1) and recommendations
for any Congressional action that the Secretary considers necessary
to improve the effectiveness of section 303(k) of the Social
Security Act.
(c) Effective Date.--The amendment made by subsection (a) shall,
with respect to a State, apply to certifications for payments (under
section 302(a) of the Social Security Act) in rate years beginning
after the end of the 26-week period beginning on the first day of the
first regularly scheduled session of the State legislature beginning on
or after the date of the enactment of this Act.
(d) Definitions.--For purposes of this section--
(1) the term ``State'' includes the District of Columbia, the
Commonwealth of Puerto Rico, and the Virgin Islands;
(2) the term ``rate year'' means the rate year as defined in
the applicable State law; and
(3) the term ``State law'' means the unemployment compensation
law of the State, approved by the Secretary of Labor under section
3304 of the Internal Revenue Code of 1986.
SEC. 3. USE OF NEW HIRE INFORMATION TO ASSIST IN ADMINISTRATION OF
UNEMPLOYMENT COMPENSATION PROGRAMS.
Section 453(j) of the Social Security Act (42 U.S.C. 653(j)) is
amended by adding at the end the following:
``(8) Information comparisons and disclosure to assist in
administration of unemployment compensation programs.--
``(A) In general.--If, for purposes of administering an
unemployment compensation program under Federal or State law, a
State agency responsible for the administration of such program
transmits to the Secretary the names and social security
account numbers of individuals, the Secretary shall disclose to
such State agency information on such individuals and their
employers maintained in the National Directory of New Hires,
subject to this paragraph.
``(B) Condition on disclosure by the secretary.--The
Secretary shall make a disclosure under subparagraph (A) only
to the extent that the Secretary determines that the disclosure
would not interfere with the effective operation of the program
under this part.
``(C) Use and disclosure of information by state
agencies.--
``(i) In general.--A State agency may not use or
disclose information provided under this paragraph except
for purposes of administering a program referred to in
subparagraph (A).
``(ii) Information security.--The State agency shall
have in effect data security and control policies that the
Secretary finds adequate to ensure the security of
information obtained under this paragraph and to ensure
that access to such information is restricted to authorized
persons for purposes of authorized uses and disclosures.
``(iii) Penalty for misuse of information.--An officer
or employee of the State agency who fails to comply with
this subparagraph shall be subject to the sanctions under
subsection (l)(2) to the same extent as if such officer or
employee was an officer or employee of the United States.
``(D) Procedural requirements.--State agencies requesting
information under this paragraph shall adhere to uniform
procedures established by the Secretary governing information
requests and data matching under this paragraph.
``(E) Reimbursement of costs.--The State agency shall
reimburse the Secretary, in accordance with subsection (k)(3),
for the costs incurred by the Secretary in furnishing the
information requested under this paragraph.''.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.