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[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.
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