1.Short
title; table of contents
(a)This Act may be cited
as the Unemployment Insurance Solvency
Act of 2011
.
(b)The table of contents of this Act is as follows:
Sec. 1. Short title; table of
contents.
Sec. 2. Extension of assistance for States with
advances.
Sec. 3. Reduction in the rate of employer taxes.
Sec. 4. Modifications of employer credit
reductions.
Sec. 5. Increase in the taxable wage base.
Sec. 6. Voluntary State agreements to abate principal on
Federal loans.
Sec. 7. Rewards and incentives for solvent States and employers
in those States.
2.Extension of
assistance for States with advances
(a)Section 1202(b)(10)(A) of the Social Security Act (42
U.S.C. 1322(b)(10)(A)) is amended by striking 2010
and inserting
2012
in the matter preceding clause (i).
(b)The amendment made by this section shall take effect as if
included in the enactment of section 2004 of the Assistance for Unemployed
Workers and Struggling Families Act (Public Law 111–5; 123 Stat. 443).
3.Reduction in the
rate of employer taxes
(a)Section 3301 of the Internal Revenue Code of 1986 is
amended—
(1)in paragraph (1),
by striking 2010 and the first 6 months of calendar year 2011
and inserting 2013
; and
(2)in paragraph (2),
by striking 6.0 percent in the case of the remainder of calendar year
2011
and inserting 5.78 percent in the case of calendar year
2014
.
(b)The amendments made by this section shall take effect on the
earlier of—
(1)the date of the
enactment of this Act; or
(2)July 1,
2011.
4.Modifications of
employer credit reductions
(a)Section 3302(c) of the Internal Revenue Code of 1986 is
amended—
(1)in paragraph (1),
by striking 90 percent of the tax against which such credits are
allowable
and inserting an amount equal to 5.4 percent of the
total wages (as defined in section 3306(b)) paid by such taxpayer during the
calendar year with respect to employment (as defined in section
3306(c))
; and
(2)in paragraph
(2)—
(A)by striking
subparagraphs (B) and (C) and the flush matter following subparagraph
(C);
(B)by striking
(2) If
and inserting (2)(A) If
;
(C)by striking
(A)(i) in
and inserting (i) in
;
(D)in clause (i) of
subparagraph (A), as redesignated by subparagraph (C), by striking 5
percent of the tax imposed by section 3301 with respect to the wages paid by
such taxpayer during such taxable year which are attributable to such
State
and inserting an amount equal to 0.3 percent of the total
wages (as defined in section 3306(b)) paid by such taxpayer during the calendar
year with respect to employment (as defined in section 3306(c))
;
(E)in clause (ii) of
subparagraph (A)—
(i)by
moving such clause 2 ems to the left;
(ii)by
striking 5 percent, for each such succeeding taxable year, of the tax
imposed by section 3301 with respect to the wages paid by such taxpayer during
such taxable year which are attributable to such State;
and inserting
an amount equal to 0.3 percent of the total wages (as defined in section
3306(b)) paid by such taxpayer during the calendar year with respect to
employment (as defined in section 3306(c)), for each succeeding taxable
year;
; and
(iii)by striking the
semicolon at the end and inserting a period; and
(F)by adding at the
end the following new subparagraph:
(B)The provisions of subparagraph (A)
shall be applied with respect to the taxable year beginning January 1, 2011, or
any succeeding taxable year by deeming January 1, 2013, to be the first January
1 occurring after January 1, 2010. For purposes of subparagraph (A),
consecutive taxable years in the period commencing January 1, 2013, shall be
determined as if the taxable year which begins on January 1, 2013, were the
taxable year immediately succeeding the taxable year which began on January 1,
2010. No taxpayer shall be subject to credit reductions under this paragraph
for taxable years beginning January 1, 2011, and January 1,
2012.
.
(b)Definitions and
special rulesSection 3302(d) of the Internal Revenue Code of
1986 is amended—
(1)by striking
paragraphs (1), (4), (5), (6), and (7); and
(2)by redesignating
paragraphs (2) and (3) as paragraphs (1) and (2), respectively.
(c)The amendments made by this section shall take effect as if
enacted on January 1, 2011.
5.Increase in the
taxable wage base
(a)Section 3306 of the Internal Revenue Code of 1986 is
amended—
(1)in subsection
(b), by striking $7,000
both places it appears and inserting
the applicable wage base amount (as defined in subsection
(v)(1))
; and
(2)by adding at the
end the following new subsection:
(v)Applicable wage
base amount
(1)For purposes of subsection (b)(1), the term
applicable wage base amount means—
(A)for a calendar
year before calendar year 2014, $7,000;
(B)for calendar year
2014, $15,000; and
(C)for calendar
years beginning on or after January 1, 2015, the amount determined under
paragraph (2).
(2)Amount for
calendar year 2015 and thereafter
(A)
(i)For purposes of paragraph (1)(C), the amount determined
under this paragraph for a calendar year is an amount equal to the product
of—
(I)the amount of
average wage growth for the year (as determined in accordance with subparagraph
(B)); and
(II)the applicable
wage base amount for the preceding calendar year.
(ii)If
the amount determined under clause (i) is not a multiple of $100, such amount
shall be rounded to the next higher multiple of $100.
(B)
(i)For purposes of subparagraph (A), the amount of annual
wage growth for a calendar year shall be determined by dividing the average
annual wage in the United States for the 12-month period ending on the June 30
of the preceding calendar year by the average annual wage in the United States
for the 12-month period ending on the second prior June 30, and rounding such
ratio to the fifth decimal place.
(ii)For purposes of clause (i), using data from the Quarterly
Census of Employment and Wages (or a successor program), the average annual
wage for a 12-month period shall be determined by dividing the total covered
wages subject to contributions under all State unemployment compensation laws
for such period by the average covered employment subject to contributions
under all State unemployment compensation laws for such period, and rounding
the result to the nearest whole
dollar.
.
(b)The amendments made by this section shall take effect on the
date of the enactment of this Act.
6.Voluntary State
agreements to abate principal on Federal loans
(a)Section 1203 of the Social Security Act (42 U.S.C. 1323)
is amended—
(1)by inserting
(a) Advances.—
after 1203
;
and
(2)by adding at the
end the following new subsection:
(b)Voluntary
abatement agreements
(1)The governor of any State that has outstanding repayable
advances from the Federal unemployment account pursuant to subsection (a) may
apply to the Secretary of Labor to enter into a voluntary principal abatement
agreement.
(2)An application described in paragraph (1) shall
include a plan that, based upon reasonable economic projections, describes how
the State will, within a reasonable period of time—
(A)repay the
outstanding principal on its remaining advance to the Federal unemployment
account, less the amount of the principal abatement pursuant to paragraph (4);
and
(B)restore the
solvency of the State's account in the Unemployment Trust Fund to an average
high cost multiple of 1.0, as calculated and defined by the United States
Department of Labor.
(3)A plan described in paragraph (2) shall be premised on the
existing unemployment compensation law of the State and may take into
consideration the enactment of any changes in law scheduled to become effective
during the life of the plan.
(4)Upon
review of the application and satisfaction that the State’s plan will meet the
repayment and solvency goals described in paragraph (2), the Secretary of Labor
may enter into a principal abatement agreement with the State. Such an
agreement shall be for a period of no more than 7 years.
(5)Under
any voluntary abatement agreement under this subsection, the amount of
principal abatement shall be calculated as follows:
(A)The State’s
repayable advances as of the date of the enactment of this subsection or
December 31, 2011, whichever is earlier, shall be multiplied by a loan
forgiveness multiplier.
(B)The State’s loan
forgiveness multiplier shall be calculated on the same basis as the temporary
increase of Medicaid FMAP under section 5001(c)(2)(A) of division B of the
American Recovery and Reinvestment Act of 2009, using the State’s additional
FMAP tier as of December 31, 2010. In the case of a State that meets the
criteria described in—
(i)clause (i) of
such section 5001(c)(2)(A), the loan multiplier shall be 0.2;
(ii)clause (ii) of
such section 5001(c)(2)(A), the loan multiplier shall be 0.4; and
(iii)clause (iii) of
such section 5001(c)(2)(A), the loan multiplier shall be 0.6.
(C)The annual amount
of principal abatement shall equal one-seventh of the total amount of principal
abatement.
(6)Under
any voluntary abatement agreement under this subsection, the State shall
certify that during the period of the agreement—
(A)the method
governing the computation of regular unemployment compensation under the State
law of the State will not be modified in a manner such that the average weekly
benefit amount of regular unemployment compensation which will be payable
during the period of the agreement will be less than the average weekly benefit
amount of regular unemployment compensation which would have otherwise been
payable under the State law as in effect on the date of the enactment of this
subsection;
(B)State law will
not be modified in a manner such that any unemployed individual who would be
eligible for regular unemployment compensation under the State law in effect on
such date of enactment would be ineligible for regular unemployment
compensation during the period of the agreement or would be subject to any
disqualification during the period of the agreement that the individual would
not have been subject to under the State law in effect on such date of
enactment;
(C)State law will
not be modified in a manner such that the maximum amount of regular
unemployment compensation that any unemployed individual would be eligible to
receive in a benefit year during the period of the agreement will be less than
the maximum amount of regular unemployment compensation that the individual
would have been eligible to receive during a benefit year under the State law
in effect on such date of enactment; and
(D)upon a
determination by the Secretary of Labor that the State has modified State law
in a manner inconsistent with the certification described in the preceding
provisions of this paragraph or has failed to comply with any certifications
required by this paragraph, the State shall be liable for any principal
previously abated under the agreement.
(7)Under
a voluntary abatement agreement under this subsection, a transfer of the annual
amount of the principal abatement shall be made to the State’s account in the
Unemployment Trust Fund on December 31st of the year in which the agreement is
executed so long as the State has complied with the terms of the agreement. For
each subsequent year that the Secretary of Labor certifies that the State is in
compliance with the terms of the agreement, the annual amount of the State’s
principal abatement will be credited to its outstanding loan balance. If the
loan balance reaches zero while the State still has a remaining principal
abatement amount, the remaining amount shall be made as a positive balance
transfer to the State's account in the Unemployment Trust Fund.
(8)The
Secretary of Labor shall promulgate such regulations as are necessary to
implement this subsection. Such regulations shall include—
(A)standards
prescribing a reasonable period of time for a State plan to reach a solvency
level equal to an average high cost multiple of 1.0, taking into account the
economic conditions and level of insolvency of the State; and
(B)guidelines for
insuring progress toward solvency for States with agreements that include plans
that require more than 7 years to reach an average high cost multiple of
1.0.
.
(b)The amendments made by this section shall take effect on the
date of the enactment of this Act.
7.Rewards and
incentives for solvent States and employers in those States
(a)Increased
interest for solvent States
(1)Section 904(e) of the Social Security Act (42 U.S.C.
1104(e)) is amended by adding at the end the following new flush
sentences:
The
separate book account for each State agency shall be augmented by 0.5 percent
over the rate of interest provided in subsection (b) when the State maintains
reserves in the account that equal or exceed an average high cost multiple of
1.0 as defined by the Secretary of Labor as of December 31st of the preceding
year. The State may apply the additional funds to support State administration
pursuant to the requirements in section
903(c)..
(b)Lower rate of
tax for solvent States
(1)Section 3301 of the Internal Revenue Code of 1986, as
amended by section 3, is amended by adding at the end the following new
sentence: For the second 6-month period of 2011 or for each calendar
year thereafter, in the case of a State that maintains reserves in the State's
separate book account that equal or exceed an average high cost multiple of 1.0
as of December 31st of the year preceding the period or year involved,
paragraph (1) shall be applied for such period or year in the State by
substituting 6.0 percent
for 6.2 percent
or, as
the case may be, paragraph (2) shall be applied for such period or year in the
State by substituting 5.68 percent
for 5.78
percent
.
.
(2)The amendment made by this subsection shall take effect on
the earlier of—
(A)the date of the
enactment of this Act; or
(B)July 1,
2011.