I 

108TH CONGRESS 

1ST SESSION H. R. 3295

To provide for additional benefits under the Temporary Extended Unemployment Compensation Act of 2002, to extend the Federal unemployment 

benefits system, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 15, 2003

Mr. ENGLISH introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL

To provide for additional benefits under the Temporary Extended Unemployment Compensation Act of 2002, to 

extend the Federal unemployment benefits system, and 

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Neighbors in Need Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows:

Sec. 1. Short title; table of contents. 
2

•HR 3295 IH 

TITLE I—TEMPORARY EXTENDED UNEMPLOYMENT 

COMPENSATION 

Sec. 101. Additional weeks of benefits. 

Sec. 102. Program extension in States with high unemployment. 

TITLE II—FEDERAL UNEMPLOYMENT BENEFIT SYSTEM 

REFORMS 

Sec. 201. Increase and decrease in earnings credited to State accounts when 

States meet or fail to meet funding goals. 

Sec. 202. Interest-free advances to State accounts in Unemployment Trust 

Fund restricted to States which meet funding goals. 

TITLE III—AMENDMENTS TO THE INTERNAL REVENUE CODE OF 

1986 

Sec. 301. 2-year suspension of tax on unemployment compensation. 

Sec. 302. State collection of Federal unemployment tax. 

Sec. 303. Required distribution of State-specific information packets.

1 TITLE I—TEMPORARY EX2 TENDED UNEMPLOYMENT 

3 COMPENSATION 

4 SEC. 101. ADDITIONAL WEEKS OF BENEFITS. 

5 (a) IN GENERAL.—Section 203 of the Temporary Ex6 tended Unemployment Compensation Act of 2002 is 

7 amended by adding at the end the following: 

8 ‘‘(d) ADDITIONAL WEEKS OF BENEFITS.—Notwith9 standing any other provision of this section, upon the ex10 haustion of all amounts that may be credited to an individ11 ual’s account under the preceding provisions of this sec12 tion, such account shall be increased by an amount equal 

13 to 8 times the individual’s average weekly benefit amount 

14 for the benefit year (as determined under subsection 

15 (b)(2)).’’. 
3

•HR 3295 IH 

1 (b) EFFECTIVE DATE AND APPLICABILITY.—The 

2 amendment made by subsection (a)—

3 (1) shall take effect as if included in the enact4 ment of the Temporary Extended Unemployment 

5 Compensation Act of 2002, and shall apply to weeks 

6 of unemployment beginning on or after the date of 

7 the enactment of this Act, but 

8 (2) shall not apply in the case of any individual 

9 whose eligibility for additional weeks of benefits 

10 would be based on an exhaustion of amounts (as re11 quired under such amendment) occurring on or after 

12 the date of the enactment of this Act. 

13 SEC. 102. PROGRAM EXTENSION IN STATES WITH HIGH UN14 EMPLOYMENT. 

15 (a) APPLICABILITY.—This section applies only to any 

16 State with respect to which, during the last week in De17 cember 2003, an extended benefit period (as described in 

18 section 203 of the Federal-State Extended Unemployment 

19 Compensation Act of 1970)—

20 (1) is in effect; or 

21 (2) would be in effect, if subsection (d) of such 

22 section 203 were applied by substituting—

23 (A) ‘‘100’’ for ‘‘120’’ in paragraph (1)(A); 

24 and 
4

•HR 3295 IH 

1 (B) ‘‘3.5’’ for ‘‘5’’ in paragraph (1)(B) and 

2 the first flush sentence following paragraph (2). 

3 (b) EXTENSION.—In the case of each State that sat4 isfies subsection (a), section 208 of the Temporary Ex5 tended Unemployment Compensation Act of 2002 shall be 

6 applied as if it had been amended—

7 (1) in subsection (a)(2), by striking ‘‘December 

8 31, 2003’’ and inserting ‘‘March 31, 2004’’; 

9 (2) in subsection (b)(1), by striking ‘‘December 

10 31, 2003’’ and inserting ‘‘March 31, 2004’’; 

11 (3) in subsection (b)(2)—

12 (A) in the heading, by striking ‘‘DECEM13 BER 31, 2003’’ and inserting ‘‘MARCH 31, 2004’’; 

14 and 

15 (B) by striking ‘‘December 31, 2003’’ and 

16 inserting ‘‘March 31, 2004’’; and 

17 (4) in subsection (b)(3), by striking ‘‘March 31, 

18 2004’’ and inserting ‘‘June 30, 2004’’. 

19 (c) DEFINITIONS.—For purposes of this section, the 

20 terms ‘‘State’’ and ‘‘week’’ have the respective meanings 

21 given such terms under section 207 of the Temporary Ex22 tended Unemployment Compensation Act of 2002.

23 (d) RULE OF CONSTRUCTION.—Nothing in this Act 

24 shall be considered to limit, terminate, or otherwise affect 

25 any unemployment benefits provided under section 4002 
5

•HR 3295 IH 

1 of the Emergency Wartime Supplemental Appropriations 

2 Act, 2003. 

3 (e) EFFECTIVE DATE.—The amendments made by 

4 this section shall take effect as if included in the enact5 ment of the Temporary Extended Unemployment Com6 pensation Act of 2002. 

7 TITLE II—FEDERAL UNEMPLOY8 MENT BENEFIT SYSTEM RE9 FORMS 

10 SEC. 201. INCREASE AND DECREASE IN EARNINGS CRED11 ITED TO STATE ACCOUNTS WHEN STATES 

12 MEET OR FAIL TO MEET FUNDING GOALS. 

13 (a) IN GENERAL.—Section 904 of the Social Security 

14 Act (42 U.S.C. 1104) is amended by adding at the end 

15 the following new subsection: 

16 ‘‘Increase and Decrease in Amount of Earnings Allocated 

17 to State Accounts When States Meet or Fail to Meet 

18 Funding Goals 

19 ‘‘(h)(1) If the average daily balance in a State ac20 count in the Unemployment Trust Fund for any calendar 

21 quarter exceeds the funding goal of such State, the 

22 amount otherwise creditable to such account under sub23 section (e) for such quarter shall be increased by the inter24 est premium on such excess. If the average daily balance 

25 in such a State account for any calendar quarter is less 
6

•HR 3295 IH 

1 than the funding goal of such State, the amount otherwise 

2 creditable to such account under subsection (e) for such 

3 quarter shall be decreased by the interest penalty. 

4 ‘‘(2) Paragraph (1) shall not apply with respect to 

5 any interest premium or interest penalty to the extent that 

6 such application would result in an increase or decrease 

7 of more than $2,500,000 in the amount creditable to any 

8 State account for any calendar quarter. 

9 ‘‘(3) For purposes of this subsection, the term ‘inter10 est premium’ means, for any calendar quarter—

11 ‘‘(A) with respect to the State with the largest 

12 percentage value of excess of the average daily bal13 ance in the State account in the Unemployment 

14 Trust Fund over the funding goal of such State, 

15 one-half of one percent of the amount of such ex16 cess, and 

17 ‘‘(B) with respect to each other State, the prod18 uct of—

19 ‘‘(i) the amount of the excess of the aver20 age daily balance in the State account in the 

21 Unemployment Trust Fund over the funding 

22 goal of such State, and 

23 ‘‘(ii) the percentage which bears the same 

24 ratio to one-half of one percent as—
7

•HR 3295 IH 

1 ‘‘(I) the percentage value of such ex2 cess, bears to

3 ‘‘(II) the percentage value of the ex4 cess of the State referred to in subpara5 graph (A). 

6 The Secretary shall make appropriate adjustments in the 

7 interest premium for any calendar quarter if the aggregate 

8 interest premiums payable for such quarter exceed the ag9 gregate interest penalties for such quarter. 

10 ‘‘(4) For purposes of this subsection, the term ‘inter11 est penalty’ means, for any calendar quarter—

12 ‘‘(A) with respect to the State with the largest 

13 percentage value of excess of the funding goal of 

14 such State over the average daily balance in the 

15 State account in the Unemployment Trust Fund, 

16 one-half of one percent of the amount otherwise 

17 creditable to such account under subsection (e), and 

18 ‘‘(B) with respect to each other State, the prod19 uct of—

20 ‘‘(i) the amount otherwise creditable to 

21 such account under subsection (e), and 

22 ‘‘(ii) the percentage which bears the same 

23 ratio to one-half of one percent as—

24 ‘‘(I) the percentage value of the excess 

25 of the funding goal of the State over such
8

•HR 3295 IH 

1 average daily balance of such State, bears 

2 to 

3 ‘‘(II) the percentage value of such ex4 cess of the State referred to in subpara5 graph (A). 

6 ‘‘(5) For purposes of this subsection, the term ‘fund7 ing goal’ means, for any State for any calendar quarter, 

8 the average of the unemployment insurance benefits paid 

9 by such State during each of the 3 years, in the 20-year 

10 period ending with the calendar year containing such cal11 endar quarter, during which the State paid the greatest 

12 amount of unemployment benefits. 

13 ‘‘(6) For purposes of this subsection, the term ‘per14 centage value’ means—

15 ‘‘(A) with respect to any excess of the average 

16 daily balance in a State account in the Unemploy17 ment Trust Fund over the funding goal of such 

18 State, the percentage which such excess bears to 

19 such funding goal, and 

20 ‘‘(B) with respect to any excess of such funding 

21 goal over such average daily balance, the percentage 

22 which such excess bears to such funding goal.’’. 

23 (b) CONFORMING AMENDMENTS.—

24 (1) AMOUNTS CREDITED TO STATE AC25 COUNTS.—Subsection (e) of section 904 of the So-
9

•HR 3295 IH 

1 cial Security Act (42 U.S.C. 1104(e)) is amended in 

2 the first sentence by inserting ‘‘(as modified by sub3 section (h))’’ after ‘‘a proportionate part’’. 

4 (2) INTEREST RATE ON REPAYMENT OF AD5 VANCES DETERMINED WITHOUT REGARD TO INTER6 EST PREMIUMS OR PENALTIES ON AMOUNTS CRED7 ITED TO STATE ACCOUNTS.—Subparagraph (A) of 

8 section 1202(b)(4) of such Act (42 U.S.C. 

9 1322(b)(4)) is amended by inserting ‘‘(determined 

10 without regard to section 904(h))’’ after ‘‘preceding 

11 calendar year’’. 

12 (c) REPORT.—Not later than 6 months after the date 

13 of the enactment of this Act, the Secretary of Labor shall 

14 submit to the Congress a report recommending sources of 

15 funding for the crediting of interest premiums under sub16 section (h) of section 904 of the Social Security Act (42 

17 U.S.C. 1104), as added by this section, in the event that 

18 the imposition of interest penalties under such subsection 

19 is insufficient to fund such premiums. 

20 (d) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to calendar years beginning after 

22 December 31, 2007.
10

•HR 3295 IH 

1 SEC. 202. INTEREST-FREE ADVANCES TO STATE ACCOUNTS 

2 IN UNEMPLOYMENT TRUST FUND RE3 STRICTED TO STATES WHICH MEET FUNDING 

4 GOALS. 

5 (a) IN GENERAL.—Subparagraph (C) of section 

6 1202(b)(2) of the Social Security Act (42 U.S.C. 

7 1322(b)(2)) is amended to read as follows: 

8 ‘‘(C) the average daily balance in the account of 

9 such State in the Unemployment Trust Fund for 

10 each of 4 of the 5 calendar quarters preceding the 

11 calendar quarter in which such advances were made 

12 exceeds the funding goal of such State (as defined 

13 in section 904(h)).’’

14 (b) EFFECTIVE DATE.—The amendment made by 

15 subsection (a) shall apply to calendar years beginning 

16 after the date of the enactment of this Act. 

17 TITLE III—AMENDMENTS TO 

18 THE INTERNAL REVENUE 

19 CODE OF 1986

20 SECTION 301. 2-YEAR SUSPENSION OF TAX ON UNEMPLOY21 MENT COMPENSATION. 

22 (a) IN GENERAL.—Section 85 of the Internal Rev23 enue Code of 1986 (relating to unemployment compensa24 tion) is amended by adding at the end the following new 

25 subsection: 
11

•HR 3295 IH 

1 ‘‘(c) MORATORIUM.—This section shall not apply to 

2 taxable years beginning in 2004 or 2005.’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 this section shall apply to taxable years beginning after 

5 December 31, 2003. 

6 SEC. 302. STATE COLLECTION OF FEDERAL UNEMPLOY7 MENT TAX. 

8 (a) IN GENERAL.—Chapter 23 of the Internal Rev9 enue Code of 1986 (relating to Federal Unemployment 

10 Tax Act) is amended by redesignating section 3311 as sec11 tion 3312 and by inserting after section 3310 the following 

12 new section: 

13 ‘‘SEC. 3311. STATE COLLECTION OF TAX. 

14 ‘‘(a) IN GENERAL.—At the election of any State 

15 which is certified as provided in section 3304, each em16 ployer who pays contributions, with respect to any wages, 

17 into an unemployment fund maintained under the unem18 ployment compensation law of such State shall submit the 

19 tax imposed by this chapter with respect to such wages 

20 to such State rather than to the Secretary. 

21 ‘‘(b) COORDINATION WITH DEPOSITARY REQUIRE22 MENTS.—Payment under subsection (a) of the tax im23 posed by this chapter with respect to any wages shall be 

24 treated as timely paid for purposes of this title if paid 

25 by the employer to the State at the same time as a timely 
12

•HR 3295 IH 

1 paid payment, with respect to such wages, of contributions 

2 into an unemployment fund maintained under the unem3 ployment compensation law of such State. 

4 ‘‘(c) EXCEPTION FOR PAYMENTS NOT TIMELY

5 PAID.—Subsection (a) shall not apply to any payment of 

6 the tax imposed by this chapter which is not paid by an 

7 employer on or before the last date on which such payment 

8 would be treated as timely paid under subsection (b). 

9 ‘‘(d) FEDERAL TAX TRANSFERRED TO SEC10 RETARY.—Each State making an election under sub11 section (a) shall transmit to the Secretary, at the time 

12 and in the manner prescribed by the Secretary, the 

13 amount of the tax imposed by this chapter which is sub14 mitted to such State under subsection (a) and a copy of 

15 the State tax return of each employer making such a sub16 mission. The Secretary may, after consultation with such 

17 organizations or other entities as the Secretary considers 

18 appropriate, prescribe regulations requiring that addi19 tional information be submitted by such State with respect 

20 to the amount of such tax payable by such employer.’’

21 (b) CLERICAL AMENDMENT.—The table of sections 

22 for chapter 23 of such Code is amended by striking the 

23 item relating to section 3311 and inserting the following 

24 new items:

‘‘Sec. 3311. State collection of tax. 

‘‘Sec. 3312. Short title.’’ 
13

•HR 3295 IH 

1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2004. 

4 SEC. 303. REQUIRED DISTRIBUTION OF STATE-SPECIFIC IN5 FORMATION PACKETS. 

6 (a) IN GENERAL.—Subsection (a) of section 3304 of 

7 the Internal Revenue Code of 1986 (relating to approval 

8 of State laws) is amended by striking ‘‘and’’ at the end 

9 of paragraph (18), by striking the period at the end of 

10 paragraph (19) and inserting ‘‘; and’’, and by adding at 

11 the end the following new paragraph: 

12 ‘‘(20) the State will distribute to unemployed 

13 individuals State-specific information packets ex14 plaining unemployment insurance eligibility condi15 tions.’’

16 (b) EFFECTIVE DATE.—The amendment made by 

17 subsection (a) shall apply to certifications of States for 

18 2004, except that section 3304(a)(20) of such Code, as 

19 added by subsection (a), shall not be a requirement for 

20 the State law of any State prior to July 1, 2005, if the 

21 legislature of such State does not meet in a regular session 

22 which closes during the calendar year 2004.

Æ