SOCIAL SECURITY ACT
TITLE III OF THE SOCIAL SECURITY ACT
Chapter 531 of the 74th Congress, as amended
49 Stat. 620, as amended
SOCIAL SECURITY ACT
ch531
118–120
Statute Compilation
United States House of Representatives
Office of the Legislative Counsel
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EN
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Social Security Act-TITLE III (Grants to States for Unemployment Compensation Administration)
Federal Employees Unemployment Compensation Act
Health Insurance for the Aged Act
Medicaid Act
Medicare Act
Social Security Act
8756
74
1935-08-14
SOCIAL SECURITY ACT
[Chapter 531 of the 74th Congress, approved August 14, 1935, 49 Stat. 620.]
[As Amended Through P.L. 118–120, Enacted November 25, 2024]
[Currency: This publication is a compilation of the text of title III of Chapter 531 of the 74th Congress. It was last amended by the public law listed in the As Amended Through note above and below at the bottom of each page of the pdf version and reflects current law through the date of the enactment of the public law listed at https://www.govinfo.gov/app/collection/comps/]
[Note: While this publication does not represent an official version of any Federal statute, substantial efforts have been made to ensure the accuracy of its contents. The official version of Federal law is found in the United States Statutes at Large and in the United States Code. The legal effect to be given to the Statutes at Large and the United States Code is established by statute (1 U.S.C. 112, 204).]
TITLE III—

GRANTS TO STATES FOR UNEMPLOYMENT COMPENSATION ADMINISTRATION1
^1
The President's Reorganization Plan No. 2 of 1949, §1 (14 FR 5225, 63 Stat. 1065), transferred the Bureau of Employment Security, including the United States Employment Service, from the Federal Security Agency to the Department of Labor, effective August 20, 1949.
Title III of the Social Security Act is administered by the Department of Labor.

TABLE OF CONTENTS OF TITLE2
^2
This table of contents does not appear in the law.
Sec. 301.
Appropriations.
Sec. 302.
Payments to States.
Sec. 303.
Provisions of State laws.
Sec. 304.
Judicial review.
Sec. 305.
Demonstration projects.
Sec. 306.
Grants to states for reemployment services and eligibility assessments.

appropriations
Sec. 301.
[42 U.S.C. 501]
The amounts made available pursuant to section 901(c)(1)(A) for the purpose of assisting the States in the administration of their unemployment compensation laws shall be used as hereinafter provided.

payments to states
Sec. 302.
[42 U.S.C. 502]
(a)
The Secretary of Labor shall from time to time certify to the Secretary of the Treasury for payment to each State which has an unemployment compensation law approved by the Secretary of Labor under the Federal Unemployment Tax Act, such amounts as the Secretary of Labor determines to be necessary for the proper and efficient administration of such law during the fiscal year for which such payment is to be made, including 100 percent of so much of the reasonable expenditures of the State as are attributable to the costs of the implementation and operation of the immigration status verification system described in section 1137(d). The Secretary of Labor's determination shall be based on (1) the population of the State; (2) an estimate of the number of persons covered by the State law and of the cost of proper and efficient administration of such law; and (3) such other factors as the Secretary of Labor finds relevant. The Secretary of Labor shall not certify for payment under this section in any fiscal year a total amount in excess of the amount appropriated therefor for such fiscal year.
(b)
Out of the sums appropriated therefor, the Secretary of the Treasury shall, upon receiving a certification under subsection (a), pay, through the Fiscal Service of the Department of the Treasury and prior to audit or settlement by the General Accounting Office, to the State agency charged with the administration of such law the amount so certified.
(c)
No portion of the cost of mailing a statement under 6050B(b) of the Internal Revenue Code of 1986 (relating to unemployment compensation) shall be treated as not being a cost for the proper and efficient administration of the State unemployment compensation law by reason of including with such statement information about the earned income credit provided by section 32 of the Internal Revenue Code of 1986. The preceding sentence shall not apply if the inclusion of such information increases the postage required to mail such statement.

provisions of state laws
Sec. 303.
[42 U.S.C. 503]
(a)
The Secretary of Labor shall make no certification for payment to any State unless he finds that the law of such State, approved by the Secretary of Labor under the Federal Unemployment Tax Act, includes provision for—
(1)
Such methods of administration (including after January 1, 1940, methods relating to the establishment and maintenance of personnel standards on a merit basis, except that the Secretary of Labor shall exercise no authority with respect to the selection, tenure of office, and compensation of any individual employed in accordance with such methods) as are found by the Secretary of Labor to be reasonably calculated to insure full payment of unemployment compensation when due; and
(2)
Payment of unemployment compensation solely through public employment offices or such other agencies as the Secretary of Labor may approve; and
(3)
Opportunity for a fair hearing, before an impartial tribunal, for all individuals whose claims for unemployment compensation are denied; and
(4)
The payment of all money received in the unemployment fund of such State (except for refunds of sums erroneously paid into such fund and except for refunds paid in accordance with the provisions of 3305(b) of the Federal Unemployment Tax Act), immediately upon such receipt, to the Secretary of the Treasury to the credit of the unemployment trust fund3 established by section 904; and
^3
As in original. Probably should be “Unemployment Trust Fund”.
(5)
Expenditure of all money withdrawn from an unemployment fund of such State, in the payment of unemployment compensation, exclusive of expenses of administration, and for refunds of sums erroneously paid into such fund and refunds paid in accordance with the provisions of 3305(b) of the Federal Unemployment Tax Act: Provided, That an amount equal to the amount of employee payments in to the unemployment fund of a State may be used in the payment of cash benefits to individuals with respect to their disability, exclusive of expenses of administration: Provided further, That the amounts specified by section 903(c)(2) or 903(d)(4) may, subject to the conditions prescribed in such section, be used for expenses incurred by the State for administration of its unemployment compensation law and public employment offices: Provided further, That nothing in this paragraph shall be construed to prohibit deducting an amount from unemployment compensation otherwise payable to an individual and using the amount so deducted to pay for health insurance, or the withholding of Federal, State, or local individual income tax, if the individual elected to have such deduction made and such deduction was made under a program approved by the Secretary of Labor: Provided further, That amounts may be deducted from unemployment benefits and used to repay overpayments as provided in subsection (g): Provided further, That amounts may be withdrawn for the payment of short-time compensation under a short-time compensation program (as defined in section 3306(v) of the Internal Revenue Code of 1986): Provided further, That amounts may be withdrawn for the payment of allowances under a self-employment assistance program (as defined in section 3306(t) of the Internal Revenue Code of 1986); and
(6)
The making of such reports, in such form and containing such information, as the Secretary of Labor may from time to time require, and compliance with such provisions as the Secretary of Labor may from time to time find necessary to assure the correctness and verification of such reports; and
(7)
Making available upon request to any agency of the United States charged with the administration of public works or assistance through public employment, the name, address, ordinary occupation and employment status of each recipient of unemployment compensation, and a statement of such recipient's rights to further compensation under such law; and
(8)
Effective July 1, 1941, the expenditure of all moneys received pursuant to section 302 of this title solely for the purposes and in the amounts found necessary by the Secretary of Labor for the proper and efficient administration of such State law; and
(9)
Effective July 1, 1941, the replacement, within a reasonable time, of any moneys received pursuant to section 302 of this title, which, because of any action or contingency, have been lost or have been expended for purposes other than, or in amounts in excess of, those found necessary by the Secretary of Labor for the proper administration of such State law; and
(10)
A requirement that, as a condition of eligibility for regular compensation for any week, any claimant who has been referred to reemployment services pursuant to the profiling system under subsection (j)(1)(B) participate in such services or in similar services unless the State agency charged with the administration of the State law determines—
(A)
such claimant has completed such services; or
(B)
there is justifiable cause for such claimant's failure to participate in such services; and
(11)
(A)4
At the time the State agency determines an erroneous payment from its unemployment fund was made to an individual due to fraud committed by such individual, the assessment of a penalty on the individual in an amount of not less than 15 percent of the amount of the erroneous payment; and
^4
Section 251(a) of Public Law 112–40 added paragraph (11) to section 303(a) (and mad a conforming change to paragraph (10)). Subsection (c) of section 251 of such Public Law provides:
(c) Effective Date.—
(1) In general.—Except as provided in paragraph (2), the amendments made by this section shall apply to erroneous payments established after the end of the 2-year period beginning on the date of the enactment of this Act [October 21, 2013].
(2) Authority.—A State may amend its State law to apply such amendments to erroneous payments established prior to the end of the period described in paragraph (1).
(B)
The immediate deposit of all assessments paid pursuant to subparagraph (A) into the unemployment fund of the State.
(12)
A requirement that, as a condition of eligibility for regular compensation for any week, a claimant must be able to work, available to work, and actively seeking work.
(b)
Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to the State agency charged with the administration of the State law, finds that in the administration of the law there is—
(1)
a denial, in a substantial number of cases, of unemployment compensation to individuals entitled thereto under such law; or
(2)
a failure to comply substantially with any provision specified in subsection (a);
the Secretary of Labor shall notify such State agency that further payments will not be made to the State until the Secretary of Labor is satisfied that there is no longer any such denial or failure to comply. Until he is so satisfied he shall make no further certification to the Secretary of the Treasury with respect to such State: Provided, That there shall be no finding under clause (1) until the question of entitlement shall have been decided by the highest judicial authority given jurisdiction under such State law: Provided further, That any costs may be paid with respect to any claimant by a State and included as costs of administration of its law.
(c)
The Secretary of Labor shall make no certification for payment to any State if he finds, after reasonable notice and opportunity for hearing to the State agency charged with the administration of the State law—
(1)
that such State does not make its records available to the Railroad Retirement Board, and furnish to the Railroad Retirement Board at the expense of the Railroad Retirement Board such copies thereof as the Railroad Retirement Board deems necessary for its purposes;
(2)
that such State is failing to afford reasonable cooperation with every agency of the United States charged with the administration of any unemployment insurance law; or
(3)
that any interest required to be paid on advances under title XII of this Act has not been paid by the date on which such interest is required to be paid or has been paid directly or indirectly (by an equivalent reduction in State unemployment taxes or otherwise) by such State from amounts in such State's unemployment fund, until such interest is properly paid.
(d)
(1)
The State agency charged with the administration of the State law—
(A)
shall disclose, upon request and on a reimbursable basis, to officers and employees of the Department of Agriculture and to officers or employees of any State supplemental nutrition assistance program benefits agency any of the following information contained in the records of such State agency—
(i)
wage information,
(ii)
whether an individual is receiving, has received, or has made application for, unemployment compensation, and the amount of any such compensation being received (or to be received) by such individual,
(iii)
the current (or most recent) home address of such individual, and
(iv)
whether an individual has refused an offer of employment and, if so, a description of the employment so offered and the terms, conditions, and rate of pay therefor, and
(B)
shall establish such safeguards as are necessary (as determined by the Secretary of Labor in regulations) to insure that information disclosed under subparagraph (A) is used only for purposes of determining an individual's eligibility for benefits, or the amount of benefits, under the supplemental nutrition assistance program established under the Food and Nutrition Act of 2008.
(2)
(A)
For purposes of this paragraph, the term “unemployment compensation” means any unemployment compensation payable under the State law (including amounts payable pursuant to an agreement under a Federal unemployment compensation law).
(B)
The State agency charged with the administration of the State law—
(i)
may require each new applicant for unemployment compensation to disclose whether the applicant owes an uncollected overissuance (as defined in section 13(c)(1) of the Food and Nutrition Act of 2008) of supplemental nutrition assistance program benefits coupons,
(ii)
may notify the State supplemental nutrition assistance program benefits agency to which the uncollected overissuance is owed that the applicant has been determined to be eligible for unemployment compensation if the applicant discloses under clause (i) that the applicant owes an uncollected overissuance and the applicant is determined to be so eligible,
(iii)
may deduct and withhold from any unemployment compensation otherwise payable to an individual—
(I)
the amount specified by the individual to the State agency to be deducted and withheld under this clause,
(II)
the amount (if any) determined pursuant to an agreement submitted to the State supplemental nutrition assistance program benefits agency under section 13(c)(3)(A) of the Food and Nutrition Act of 2008, or
(III)
any amount otherwise required to be deducted and withheld from the unemployment compensation pursuant to section 13(c)(3)(B) of such Act, and
(iv)
shall pay any amount deducted and withheld under clause (iii) to the appropriate State supplemental nutrition assistance program benefits agency.
(C)
Any amount deducted and withheld under subparagraph (B)(iii) shall for all purposes be treated as if it were paid to the individual as unemployment compensation and paid by the individual to the State supplemental nutrition assistance program benefits agency to which the uncollected overissuance is owed as repayment of the individual's uncollected overissuance.
(D)
A State supplemental nutrition assistance program benefits agency to which an uncollected overissuance is owed shall reimburse the State agency charged with the administration of the State unemployment compensation law for the administrative costs incurred by the State agency under this paragraph that are attributable to repayment of uncollected overissuance to the State supplemental nutrition assistance program benefits agency to which the uncollected overissuance is owed.
(3)
Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to the State agency charged with the administration of the State law, finds that there is a failure to comply substantially with the requirements of paragraph (1), the Secretary of Labor shall notify such State agency that further payments will not be made to the State until he is satisfied that there is no longer any such failure. Until the Secretary of Labor is so satisfied, he shall make no further certification to the Secretary of the Treasury with respect to such State.
(4)
For purposes of this subsection, the term “State supplemental nutrition assistance program benefits agency” means any agency described in section 3(t)(1) of the Food and Nutrition Act of 2008 which administers the supplemental nutrition assistance program established under such Act.
(e)
(1)
The State agency charged with the administration of the State law—
(A)
shall disclose, upon request and on a reimbursable basis, directly to officers or employees of any State or local child support enforcement agency any wage information contained in the records of such State agency, and
(B)
shall establish such safeguards as are necessary (as determined by the Secretary of Labor in regulations) to insure that information disclosed under subparagraph (A) is used only for purposes of establishing and collecting child support obligations from, and locating, individuals owing such obligations.
For purposes of this subsection, the term “child support obligations” only includes obligations which are being enforced pursuant to a plan described in section 454 of this Act which has been approved by the Secretary of Health and Human Services under part D of title IV of this Act.
(2)
(A)
The State agency charged with the administration of the State law—
(i)
shall require each new applicant for unemployment compensation to disclose whether or not such applicant owes child support obligations (as defined in the last sentence of paragraph (1)),
(ii)
shall notify the State or local child support enforcement agency enforcing such obligations, if any applicant discloses under clause (i) that he owes child support obligations and he is determined to be eligible for unemployment compensation, that such applicant has been so determined to be eligible,
(iii)
shall deduct and withhold from any unemployment compensation otherwise payable to an individual—
(I)
the amount specified by the individual to the State agency to be deducted and withheld under this clause,
(II)
the amount (if any) determined pursuant to an agreement submitted to the State agency under section 454(19)(B)(i) of this Act, or
(III)
any amount otherwise required to be so deducted and withheld from such unemployment compensation through legal process (as defined in section 462(e)), and
(iv)
shall pay any amount deducted and withheld under clause (iii) to the appropriate State or local child support enforcement agency.
Any amount deducted and withheld under clause (iii) shall for all purposes be treated as if it were paid to the individual as unemployment compensation and paid by such individual to the State or local child support enforcement agency in satisfaction of his child support obligations.
(B)
For purposes of this paragraph, the term “unemployment compensation” means any compensation payable under the State law (including amounts payable pursuant to agreements under any Federal unemployment compensation law).
(C)
Each State or local child support enforcement agency shall reimburse the State agency charged with the administration of the State unemployment compensation law for the administrative costs incurred by such State agency under this paragraph which are attributable to child support obligations being enforced by the State or local child support enforcement agency.
(3)
Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to the State agency charged with the administration of the State law, finds that there is a failure to comply substantially with the requirements of paragraph (1) or (2), the Secretary of Labor shall notify such State agency that further payments will not be made to the State until he is satisfied that there is no longer any such failure. Until the Secretary of Labor is so satisfied, he shall make no further certification to the Secretary of the Treasury with respect to such State.
(4)
For purposes of this subsection, the term “State or local child support enforcement agency” means any agency of a State or political subdivision thereof operating pursuant to a plan described in the last sentence of paragraph (1).
(5)
A State or local child support enforcement agency may disclose to any agent of the agency that is under contract with the agency to carry out the purposes described in paragraph (1)(B) wage information that is disclosed to an officer or employee of the agency under paragraph (1)(A). Any agent of a State or local child support agency that receives wage information under this paragraph shall comply with the safeguards established pursuant to paragraph (1)(B)
(f)
The State agency charged with the administration of the State law shall provide that information shall be requested and exchanged for purposes of income and eligibility verification in accordance with a State system which meets the requirements of section 1137 of this Act.
(g)
(1)
A State shall deduct from unemployment benefits otherwise payable to an individual an amount equal to any overpayment made to such individual under an unemployment benefit program of the United States or of any other State, and not previously recovered. The amount so deducted shall be paid to the jurisdiction under whose program such overpayment was made. Any such deduction shall be made only in accordance with the same procedures relating to notice and opportunity for a hearing as apply to the recovery of overpayments of regular unemployment compensation paid by such State.
(2)
Any State may enter into an agreement with the Secretary of Labor under which—
(A)
the State agrees to recover from unemployment benefits otherwise payable to an individual by such State any overpayments made under an unemployment benefit program of the United States to such individual and not previously recovered, in accordance with paragraph (1), and to pay such amounts recovered to the United States for credit to the appropriate account, and
(B)
the United States agrees to allow the State to recover from unemployment benefits otherwise payable to an individual under an unemployment benefit program of the United States any overpayments made by such State to such individual under a State unemployment benefit program and not previously recovered, in accordance with the same procedures as apply under paragraph (1).
(3)
For purposes of this subsection, “unemployment benefits” means unemployment compensation, trade adjustment allowances, Federal additional compensation, and other unemployment assistance.
(h)
(1)
The State agency charged with the administration of the State law shall, on a reimbursable basis—
(A)
disclose quarterly, to the Secretary of Health and Human Services, wage and claim information, as required pursuant to section 453(i)(1), contained in the records of such agency;
(B)
ensure that information provided pursuant to subparagraph (A) meets such standards relating to correctness and verification as the Secretary of Health and Human Services, with the concurrence of the Secretary of Labor, may find necessary; and
(C)
establish such safeguards as the Secretary of Labor determines are necessary to insure that information disclosed under subparagraph (A) is used only for purposes of subsections (i)(1), (i)(3), and (j) of section 453.
(2)
Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to the State agency charged with the administration of the State law, finds that there is a failure to comply substantially with the requirements of paragraph (1), the Secretary of Labor shall notify such State agency that further payments will not be made to the State until the Secretary of Labor is satisfied that there is no longer any such failure. Until the Secretary of Labor is so satisfied, such Secretary shall make no future certification to the Secretary of the Treasury with respect to the State.
(3)
For purposes of this subsection—
(A)
the term “wage information” means information regarding wages paid to an individual, the social security account number of such individual, and the name, address, State, and the Federal employer identification number of the employer paying such wages to such individual; and
(B)
the term “claim information” means information regarding whether an individual is receiving, has received, or has made application for, unemployment compensation, the amount of any such compensation being received (or to be received by such individual), and the individual's current (or most recent) home address.
(i)
(1)
The State agency charged with the administration of the State law—
(A)
shall disclose, upon request and on a reimbursable basis, only to officers and employees of the Department of Housing and Urban Development and to representatives of a public housing agency, any of the following information contained in the records of such State agency with respect to individuals applying for or participating in any housing assistance program administered by the Department who have signed an appropriate consent form approved by the Secretary of Housing and Urban Development—
(i)
wage information, and
(ii)
whether an individual is receiving, has received, or has made application for, unemployment compensation, and the amount of any such compensation being received (or to be received) by such individual, and
(B)
shall establish such safeguards as are necessary (as determined by the Secretary of Labor in regulations) to ensure that information disclosed under subparagraph (A) is used only for purposes of determining an individual's eligibility for benefits, or the amount of benefits, under a housing assistance program of the Department of Housing and Urban Development.
(2)
The Secretary of Labor shall prescribe regulations governing how often and in what form information may be disclosed under paragraph (1)(A).
(3)
Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to the State agency charged with the administration of the State law, finds that there is a failure to comply substantially with the requirements of paragraph (1), the Secretary of Labor shall notify such State agency that further payments will not be made to the State until he or she is satisfied that there is no longer any such failure. Until the Secretary of Labor is so satisfied, he or she shall make no future certification to the Secretary of the Treasury with respect to such State.
(4)
For purposes of this subsection, the term “public housing agency” means any agency described in section 3(b)(6) of the United States Housing Act of 1937.
(5)
[Repealed by section 542(a)(1) of P.L. 105–65 (111 Stat. 1412).]
(j)
(1)
The State agency charged with the administration of the State law shall establish and utilize a system of profiling all new claimants for regular compensation that—
(A)
identifies which claimants will be likely to exhaust regular compensation and will need job search assistance services to make a successful transition to new employment;
(B)
refers claimants identified pursuant to subparagraph (A) to reemployment services, such as job search assistance services, available under any State or Federal law;
(C)
collects follow-up information relating to the services received by such claimants and the employment outcomes for such claimants subsequent to receiving such services and utilizes such information in making identifications pursuant to subparagraph (A); and
(D)
meets such other requirements as the Secretary of Labor determines are appropriate.
(2)
Whenever the Secretary of Labor, after reasonable notice and opportunity for hearing to the State agency charged with the administration of the State law, finds that there is a failure to comply substantially with the requirements of paragraph (1), the Secretary of Labor shall notify such State agency that further payments will not be made to the State until he is satisified that there is no longer any such failure. Until the Secretary of Labor is so satisfied, he shall make no further certification to the Secretary of the Treasury with respect to such State.
(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.
(l)
(1)
Nothing in this Act or any other provision of Federal law shall be considered to prevent a State from enacting legislation to provide for—
(A)
testing an applicant for unemployment compensation for the unlawful use of controlled substances as a condition for receiving such compensation, if such applicant—
(i)
was terminated from employment with the applicant's most recent employer (as defined under the State law) because of the unlawful use of controlled substances; or
(ii)
is an individual for whom suitable work (as defined under the State law) is only available in an occupation that regularly conducts drug testing (as determined under regulations issued by the Secretary of Labor); or
(B)
denying such compensation to such applicant on the basis of the result of the testing conducted by the State under legislation described in subparagraph (A).
(2)
For purposes of this subsection—
(A)
the term “unemployment compensation” has the meaning given such term in subsection (d)(2)(A); and
(B)
the term “controlled substance” has the meaning given such term in section 102 of the Controlled Substances Act (21 U.S.C. 802).
(m)
In the case of a covered unemployment compensation debt (as defined under section 6402(f)(4) of the Internal Revenue Code of 1986) that remains uncollected as of the date that is 1 year after the debt was finally determined to be due and collected, the State to which such debt is owed shall take action to recover such debt under section 6402(f) of the Internal Revenue Code of 1986.

judicial review
Sec. 304.
[42 U.S.C. 504]
(a)
Whenever the Secretary of Labor—
(1)
finds that a State law does not include any provision specified in section 303(a), or
(2)
makes a finding with respect to a State under subsection (b), (c), (d), (e), (h), (i), or (j) of section 303,
such State may, within 60 days after the Governor of the State has been notified of such action, file with the United States court of appeals for the circuit in which such State is located or with the United States Court of Appeals for the District of Columbia, a petition for review of such action. A copy of the petition shall be forthwith transmitted by the clerk of the court to the Secretary of Labor. The Secretary of Labor thereupon shall file in the court the record of the proceedings on which he based his action as provided in section 2112 of title 28, United States Code.
(b)
The findings of fact by the Secretary of Labor, if supported by substantial evidence, shall be conclusive; but the court, for good cause shown, may remand the case to the Secretary of Labor to take further evidence and the Secretary of Labor may thereupon make new or modified findings of fact and may modify his previous action, and shall certify to the court the record of the further proceedings. Such new or modified findings of fact shall likewise be conclusive if supported by substantial evidence.
(c)
The court shall have jurisdiction to affirm the action of the Secretary of Labor or to set it aside, in whole or in part. The judgment of the court shall be subject to review by the Supreme Court of the United States upon certiorari or certification as provided in section 1254 of title 28 of the United States Code.
(d)
(1)
The Secretary of Labor shall not withhold any certification for payment to any State under section 302 until the expiration of 60 days after the Governor of the State has been notified of the action referred to in paragraph (1) or (2) of subsection (a) or until the State has filed a petition for review of such action, whichever is earlier.
(2)
The commencement of judicial proceedings under this section shall stay the Secretary's action for a period of 30 days, and the court may thereafter grant interim relief if warranted, including a further stay of the Secretary's action and including such other relief as may be necessary to preserve status or rights.

DEMONSTRATION PROJECTS
Sec. 305.
[42 U.S.C. 505]
(a)
The Secretary of Labor may enter into agreements, with up to 10 States that submit an application described in subsection (b), for the purpose of allowing such States to conduct demonstration projects to test and evaluate measures designed—
(1)
to expedite the reemployment of individuals who have established a benefit year and are otherwise eligible to claim unemployment compensation under the State law of such State; or
(2)
to improve the effectiveness of a State in carrying out its State law with respect to reemployment.
(b)
The Governor of any State desiring to conduct a demonstration project under this section shall submit an application to the Secretary of Labor. Any such application shall include—
(1)
a general description of the proposed demonstration project, including the authority (under the laws of the State) for the measures to be tested, as well as the period of time during which such demonstration project would be conducted;
(2)
if a waiver under subsection (c) is requested, a statement describing the specific aspects of the project to which the waiver would apply and the reasons why such waiver is needed;
(3)
a description of the goals and the expected programmatic outcomes of the demonstration project, including how the project would contribute to the objective described in subsection (a)(1), subsection (a)(2), or both;
(4)
assurances (accompanied by supporting analysis) that the demonstration project would operate for a period of at least 1 calendar year and not result in any increased net costs to the State's account in the Unemployment Trust Fund;
(5)
a description of the manner in which the State—
(A)
will conduct an impact evaluation, using a methodology appropriate to determine the effects of the demonstration project, including on individual skill levels, earnings, and employment retention; and
(B)
will determine the extent to which the goals and outcomes described in paragraph (3) were achieved;
(6)
assurances that the State will provide any reports relating to the demonstration project, after its approval, as the Secretary of Labor may require; and
(7)
assurances that employment meets the State's suitable work requirement and the requirements of section 3304(a)(5) of the Internal Revenue Code of 1986.
(c)
The Secretary of Labor may waive any of the requirements of section 3304(a)(4) of the Internal Revenue Code of 1986 or of paragraph (1) or (5) of section 303(a), to the extent and for the period the Secretary of Labor considers necessary to enable the State to carry out a demonstration project under this section.
(d)
A demonstration project under this section—
(1)
may be commenced any time after the date of enactment of this section;
(2)
may not be approved for a period of time greater than 3 years; and
(3)
must be completed by not later than December 31, 2015.
(e)
Activities that may be pursued under a demonstration project under this section are limited to—
(1)
subsidies for employer-provided training, such as wage subsidies; and
(2)
direct disbursements to employers who hire individuals receiving unemployment compensation, not to exceed the weekly benefit amount for each such individual, to pay part of the cost of wages that exceed the unemployed individual's prior benefit level.
(f)
The Secretary of Labor shall, in the case of any State for which an application is submitted under subsection (b)—
(1)
notify the State as to whether such application has been approved or denied within 30 days after receipt of a complete application; and
(2)
provide public notice of the decision within 10 days after providing notification to the State in accordance with paragraph (1).
Public notice under paragraph (2) may be provided through the Internet or other appropriate means. Any application under this section that has not been denied within the 30-day period described in paragraph (1) shall be deemed approved, and public notice of any approval under this sentence shall be provided within 10 days thereafter.
(g)
The Secretary of Labor may terminate a demonstration project under this section if the Secretary determines that the State has violated the substantive terms or conditions of the project.
(h)
Funding certified under section 302(a) may be used for an approved demonstration project.
SEC. 306.
[42 U.S.C. 506]

GRANTS TO STATES FOR REEMPLOYMENT SERVICES AND ELIGIBILITY ASSESSMENTS.
(a)

In General.—
The Secretary of Labor (in this section referred to as the “Secretary”) shall award grants under this section for a fiscal year to eligible States to conduct a program of reemployment services and eligibility assessments for claimants for regular compensation, including claimants referred to reemployment services as described in section 303(j), for weeks in such fiscal year for which such claimants receive unemployment compensation.
(b)

Purposes.—
The purposes of this section are to accomplish the following goals:
(1)
To improve employment outcomes of individuals that receive unemployment compensation and to reduce the average duration of receipt of such compensation through employment.
(2)
To strengthen program integrity and reduce improper payments of unemployment compensation by States through the detection and prevention of such payments to individuals who are not eligible for such compensation.
(3)
To promote alignment with the broader vision of the Workforce Innovation and Opportunity Act (29 U.S.C. 3101 et seq.) of increased program integration and service delivery for job seekers, including claimants for unemployment compensation.
(4)
To establish reemployment services and eligibility assessments as an entry point for individuals receiving unemployment compensation into other workforce system partner programs.
(c)

Evidence-based Standards.—
(1)

In general.—
In carrying out a State program of reemployment services and eligibility assessments using grant funds awarded to the State under this section, a State shall use such funds only for interventions demonstrated to reduce the number of weeks for which program participants receive unemployment compensation by improving employment outcomes for program participants.
(2)

Expanding evidence-based interventions.—
In addition to the requirement imposed by paragraph (1), a State shall—
(A)
for fiscal years 2023 and 2024, use no less than 25 percent of the grant funds awarded to the State under this section for interventions with a high or moderate causal evidence rating that show a demonstrated capacity to improve employment and earnings outcomes for program participants;
(B)
for fiscal years 2025 and 2026, use no less than 40 percent of such grant funds for interventions described in subparagraph (A); and
(C)
for fiscal years beginning after fiscal year 2026, use no less than 50 percent of such grant funds for interventions described in subparagraph (A).
(d)

Evaluations.—
(1)

Required evaluations.—
Any intervention without a high or moderate causal evidence rating used by a State in carrying out a State program of reemployment services and eligibility assessments under this section shall be under evaluation at the time of use.
(2)

Funding limitation.—
A State shall use not more than 10 percent of grant funds awarded to the State under this section to conduct or cause to be conducted evaluations of interventions used in carrying out a program under this section (including evaluations conducted pursuant to paragraph (1)).
(e)

State Plan.—
(1)

In general.—
As a condition of eligibility to receive a grant under this section for a fiscal year, a State shall submit to the Secretary, at such time and in such manner as the Secretary may require, a State plan that outlines how the State intends to conduct a program of reemployment services and eligibility assessments under this section, including—
(A)
assurances that, and a description of how, the program will provide—
(i)
proper notification to participating individuals of the program’s eligibility conditions, requirements, and benefits, including the issuance of warnings and simple, clear notifications to ensure that participating individuals are fully aware of the consequences of failing to adhere to such requirements, including policies related to non-attendance or non-fulfillment of work search requirements; and
(ii)
reasonable scheduling accommodations to maximize participation for eligible individuals;
(B)
assurances that, and a description of how, the program will conform with the purposes outlined in subsection (b) and satisfy the requirement to use evidence-based standards under subsection (c), including—
(i)
a description of the evidence-based interventions the State plans to use to speed reemployment;
(ii)
an explanation of how such interventions are appropriate to the population served; and
(iii)
if applicable, a description of the evaluation structure the State plans to use for interventions without at least a moderate or high causal evidence rating, which may include national evaluations conducted by the Department of Labor or by other entities; and
(C)
a description of any reemployment activities and evaluations conducted in the prior fiscal year, and any data collected on—
(i)
characteristics of program participants;
(ii)
the number of weeks for which program participants receive unemployment compensation; and
(iii)
employment and other outcomes for program participants consistent with State performance accountability measures provided by the State unemployment compensation program and in section 116(b) of the Workforce Innovation and Opportunity Act (29 U.S.C. 3141(b)).
(2)

Approval.—
The Secretary shall approve any State plan, that is timely submitted to the Secretary, in such manner as the Secretary may require, that satisfies the conditions described in paragraph (1).
(3)

Disapproval and revision.—
If the Secretary determines that a State plan submitted pursuant to this subsection fails to satisfy the conditions described in paragraph (1), the Secretary shall—
(A)
disapprove such plan;
(B)
provide to the State, not later than 30 days after the date of receipt of the State plan, a written notice of such disapproval that includes a description of any portion of the plan that was not approved and the reason for the disapproval of each such portion; and
(C)
provide the State with an opportunity to correct any such failure and submit a revised State plan.
(f)

Allocation of Funds.—
(1)

Base funding.—
(A)

In general.—
For each fiscal year after fiscal year 2020, the Secretary shall allocate a percentage equal to the base funding percentage for such fiscal year of the funds made available for grants under this section among the States awarded such a grant for such fiscal year using a formula prescribed by the Secretary based on the rate of insured unemployment (as defined in section 203(e)(1) of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note)) in the State for a period to be determined by the Secretary. In developing such formula with respect to a State, the Secretary shall consider the importance of avoiding sharp reductions in grant funding to a State over time.
(B)

Base funding percentage.—
For purposes of subparagraph (A), the term “base funding percentage” means—
(i)
for fiscal years 2021 through 2026, 89 percent; and
(ii)
for fiscal years after 2026, 84 percent.
(2)

Reservation for outcome payments.—
(A)

In general.—
Of the amounts made available for grants under this section for each fiscal year after 2020, the Secretary shall reserve a percentage equal to the outcome reservation percentage for such fiscal year for outcome payments to increase the amount otherwise awarded to a State under paragraph (1). Such outcome payments shall be paid to States conducting reemployment services and eligibility assessments under this section that, during the previous fiscal year, met or exceeded the outcome goals provided in subsection (b)(1) related to reducing the average duration of receipt of unemployment compensation by improving employment outcomes.
(B)

Outcome reservation percentage.—
For purposes of subparagraph (A), the term “outcome reservation percentage” means—
(i)
for fiscal years 2021 through 2026, 10 percent; and
(ii)
for fiscal years after 2026, 15 percent.
(3)

Reservation for research and technical assistance.—
Of the amounts made available for grants under this section for each fiscal year after 2020, the Secretary may reserve not more than 1 percent to conduct research and provide technical assistance to States.
(4)

Consultation and public comment.—
Not later than September 30, 2019, the Secretary shall—
(A)
consult with the States and seek public comment in developing the allocation formula under paragraph (1) and the criteria for carrying out the reservations under paragraph (2); and
(B)
make publicly available the allocation formula and criteria developed pursuant to subclause (A).
(g)

Notification to Congress.—
Not later than 90 days prior to making any changes to the allocation formula or the criteria developed pursuant to subsection (f)(5)(A), the Secretary shall submit to Congress, including to the Committee on Ways and Means and the Committee on Appropriations of the House of Representatives and the Committee on Finance and the Committee on Appropriations of the Senate, a notification of any such change.
(h)

Supplement Not Supplant.—
Funds made available to carry out this section shall be used to supplement the level of Federal, State, and local public funds that, in the absence of such availability, would be expended to provide reemployment services and eligibility assessments to individuals receiving unemployment compensation, and in no case to supplant such Federal, State, or local public funds.
(i)

Definitions.—
In this section:
(1)

Causal evidence rating.—
The terms “high causal evidence rating” and “moderate causal evidence rating” shall have the meaning given such terms by the Secretary of Labor.
(2)

Eligible state.—
The term “eligible State” means a State that has in effect a State plan approved by the Secretary in accordance with subsection (e).
(3)

Intervention.—
The term “intervention” means a service delivery strategy for the provision of State reemployment services and eligibility assessment activities under this section.
(4)

State.—
The term “State” has the meaning given the term in section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note).
(5)

Unemployment compensation.—
The term unemployment compensation means “regular compensation”, “extended compensation”, and “additional compensation” (as such terms are defined by section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note)).