II 

116TH CONGRESS 

2D SESSION S. 4244 

To amend title III of the Social Security Act to provide for improvements 

to State unemployment systems and to strengthen program integrity. 

IN THE SENATE OF THE UNITED STATES 

JULY 21, 2020 

Mr. YOUNG (for himself and Mr. SASSE) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend title III of the Social Security Act to provide 

for improvements to State unemployment systems and 

to strengthen program integrity. 

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. 

4 This Act may be cited as the ‘‘Unemployment Insur5 ance Systems Modernization Act of 2020’’. 

6 SEC. 2. IMPROVEMENTS TO STATE UNEMPLOYMENT SYS7 TEMS AND STRENGTHENING PROGRAM IN8 TEGRITY. 

9 (a) UNEMPLOYMENT COMPENSATION SYSTEMS.— 


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1 (1) IN GENERAL.—Section 303(a) of the Social 

2 Security Act (42 U.S.C. 503(a)) is amended— 

3 (A) in the matter preceding paragraph (1), 

4 by striking ‘‘provision for—’’ and inserting 

5 ‘‘provision for each of the following:’’; 

6 (B) at the end of each of paragraphs (1) 

7 through (10) and paragraph (11)(B), by strik8 ing ‘‘; and’’ and inserting a period; and 

9 (C) by adding at the end the following new 

10 paragraph: 

11 ‘‘(13) The State system shall, in addition to 

12 meeting the requirements under section 1137, meet 

13 the following requirements: 

14 ‘‘(A) The system shall be capable of han15 dling a surge of claims that would represent a 

16 twentyfold increase in claims from January 

17 2020 levels, occurring over a one-month period. 

18 ‘‘(B) The system shall be capable of— 

19 ‘‘(i) adjusting wage replacement levels 

20 for individuals receiving unemployment 

21 compensation; 

22 ‘‘(ii) adjusting weekly earnings dis23 regards, including the ability to adjust 

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1 ual’s earnings or weekly benefit amount; 

2 and 

3 ‘‘(iii) providing for wage replacement 

4 levels that vary based on the duration of 

5 benefit receipt. 

6 ‘‘(C) The system shall have in place an 

7 automated process for receiving and processing 

8 claims for disaster unemployment assistance 

9 under section 410(a) of the Robert T. Stafford 

10 Disaster Relief and Emergency Assistance Act 

11 (42 U.S.C. 5177(a)), with flexibility to adapt 

12 rules regarding individuals eligible for assist13 ance and the amount payable. 

14 ‘‘(D) In the case of a State that makes 

15 payments of short-time compensation under a 

16 short-time compensation program (as defined in 

17 section 3306(v) of the Internal Revenue Code of 

18 1986), the system shall have in place an auto19 mated process of receiving and processing 

20 claims for short-time compensation. 

21 ‘‘(E) The system shall have in place an 

22 automated process for receiving and processing 

23 claims for— 

24 ‘‘(i) unemployment compensation for 

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1 chapter I of chapter 85 of title 5, United 

2 States Code; 

3 ‘‘(ii) unemployment compensation for 

4 ex-servicemembers under subchapter II of 

5 chapter 85 of title 5, United States Code; 

6 and 

7 ‘‘(iii) trade readjustment allowances 

8 under sections 231 through 233 of the 

9 Trade Act of 1974 (19 U.S.C. 2291– 

10 2293).’’. 

11 (2) EFFECTIVE DATE.—The amendment made 

12 by paragraph (1) shall apply to weeks of unemploy13 ment beginning on or after the earlier of— 

14 (A) the date the State changes its statutes, 

15 regulations, or policies in order to comply with 

16 such amendment; or 

17 (B) October 1, 2023. 

18 (b) ELECTRONIC TRANSMISSION OF UNEMPLOYMENT

19 COMPENSATION INFORMATION.—Section 303 of the So20 cial Security Act (42 U.S.C. 503) is amended by adding 

21 at the end the following new subsection: 

22 ‘‘(n) ELECTRONIC TRANSMISSION OF UNEMPLOY23 MENT COMPENSATION INFORMATION.— 

24 ‘‘(1) IN GENERAL.—Not later than October 1, 

25 2023, the State agency charged with administration 


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1 of the State law shall use a system developed (in 

2 consultation with stakeholders) and designated by 

3 the Secretary of Labor for automated electronic 

4 transmission of requests for information relating to 

5 unemployment compensation and the provision of 

6 such information between such agency and employ7 ers or their agents. 

8 ‘‘(2) USE OF APPROPRIATED FUNDS.—The Sec9 retary of Labor may use funds appropriated for 

10 grants to States under this title to make payments 

11 on behalf of States as the Secretary determines is 

12 appropriate for the use of the system described in 

13 paragraph (1). 

14 ‘‘(3) EMPLOYER PARTICIPATION.—The Sec15 retary of Labor shall work with the State agency 

16 charged with administration of the State law to in17 crease the number of employers using this system 

18 and to resolve any technical challenges with the sys19 tem. 

20 ‘‘(4) REPORTS ON USE OF ELECTRONIC SYS21 TEM.—After the end of each fiscal year, on a date 

22 determined by the Secretary, each State shall report 

23 to the Secretary information on— 

24 ‘‘(A) the proportion of employers using the 

25 designated system described in paragraph (1); 


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1 ‘‘(B) the reasons employers are not using 

2 such system; and 

3 ‘‘(C) the efforts the State is undertaking 

4 to increase employer’s use of such system. 

5 ‘‘(5) ENFORCEMENT.—Whenever the Secretary 

6 of Labor, after reasonable notice and opportunity for 

7 hearing to the State agency charged with the admin8 istration of the State law, finds that there is a fail9 ure to comply substantially with the requirements of 

10 paragraph (1), the Secretary of Labor shall notify 

11 such State agency that further payments will not be 

12 made to the State until the Secretary of Labor is 

13 satisfied that there is no longer any such failure. 

14 Until the Secretary of Labor is so satisfied, such 

15 Secretary shall make no future certification to the 

16 Secretary of the Treasury with respect to the 

17 State.’’. 

18 (c) UNEMPLOYMENT COMPENSATION INTEGRITY

19 DATA HUB.— 

20 (1) IN GENERAL.—Section 303(a) of the Social 

21 Security Act (42 U.S.C. 503(a)), as amended by 

22 subsection (a), is amended by adding at the end the 

23 following new paragraph: 

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1 ignated by the Secretary of Labor for cross-match2 ing claimants of unemployment compensation under 

3 State law against any databases in the system to 

4 prevent and detect fraud and improper payments.’’. 

5 (2) EFFECTIVE DATE.—The amendment made 

6 by paragraph (1) shall apply to weeks of unemploy7 ment beginning on or after the earlier of— 

8 (A) the date the State changes its statutes, 

9 regulations, or policies in order to comply with 

10 such amendment; or 

11 (B) October 1, 2023. 

12 (d) USE OF NATIONAL DIRECTORY OF NEW HIRES

13 IN ADMINISTRATION OF UNEMPLOYMENT COMPENSATION

14 PROGRAMS AND PENALTIES ON NONCOMPLYING EMPLOY15 ERS.— 

16 (1) IN GENERAL.—Section 303 of the Social 

17 Security Act (42 U.S.C. 503), as amended by sub18 section (b), is amended by adding at the end the fol19 lowing new subsection: 

20 ‘‘(o) USE OF NATIONAL DIRECTORY OF NEW

21 HIRES.— 

22 ‘‘(1) IN GENERAL.—Not later than October 1, 

23 2023, the State agency charged with administration 

24 of the State law shall— 


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1 ‘‘(A) compare information in the National 

2 Directory of New Hires established under sec3 tion 453(i) against information about individ4 uals claiming unemployment compensation to 

5 identify any such individuals who may have be6 come employed, in accordance with any regula7 tions or guidance that the Secretary of Health 

8 and Human Services may issue and consistent 

9 with the computer matching provisions of the 

10 Privacy Act of 1974; 

11 ‘‘(B) take timely action to verify whether 

12 the individuals identified pursuant to subpara13 graph (A) are employed; and 

14 ‘‘(C) upon verification pursuant to sub15 paragraph (B), take appropriate action to sus16 pend or modify unemployment compensation 

17 payments, and to initiate recovery of any im18 proper unemployment compensation payments 

19 that have been made. 

20 ‘‘(2) ENFORCEMENT.—Whenever the Secretary 

21 of Labor, after reasonable notice and opportunity for 

22 hearing to the State agency charged with the admin23 istration of the State law, finds that there is a fail24 ure to comply substantially with the requirements of 

25 paragraph (1), the Secretary of Labor shall notify 


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1 such State agency that further payments will not be 

2 made to the State until the Secretary of Labor is 

3 satisfied that there is no longer any such failure. 

4 Until the Secretary of Labor is so satisfied, such 

5 Secretary shall make no future certification to the 

6 Secretary of the Treasury with respect to the 

7 State.’’. 

8 (2) PENALTIES.— 

9 (A) IN GENERAL.—Section 453A(d) of the 

10 Social Security Act (42 U.S.C. 653a(d)), in the 

11 matter preceding paragraph (1), is amended by 

12 striking ‘‘have the option to set a State civil 

13 money penalty which shall not exceed’’ and in14 serting ‘‘set a State civil money penalty which 

15 shall be no less than’’. 

16 (B) EFFECTIVE DATE.—The amendment 

17 made by subparagraph (A) shall apply to pen18 alties assessed on or after October 1, 2023. 

19 (e) STATE PERFORMANCE.— 

20 (1) IN GENERAL.—Section 303 of the Social 

21 Security Act (42 U.S.C. 503), as amended by sub22 sections (b) and (d), is amended by adding at the 

23 end the following new subsection: 

24 ‘‘(p) STATE PERFORMANCE.— 


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1 ‘‘(1) IN GENERAL.—For purposes of assisting 

2 States in meeting the requirements of this title, title 

3 IX, title XII, or chapter 23 of the Internal Revenue 

4 Code of 1986 (commonly referred to as ‘the Federal 

5 Unemployment Tax Act’), the Secretary of Labor 

6 may— 

7 ‘‘(A) consistent with subsection (a)(1), es8 tablish measures of State performance, includ9 ing criteria for acceptable levels of performance, 

10 performance goals, and performance measure11 ment programs; 

12 ‘‘(B) consistent with subsection (a)(6), re13 quire States to provide to the Secretary of 

14 Labor data or other relevant information from 

15 time to time concerning the operations of the 

16 State or State performance, including the meas17 ures, criteria, goals, or programs established 

18 under paragraph (1); 

19 ‘‘(C) require States with sustained failure 

20 to meet acceptable levels of performance or with 

21 performance that is substantially below accept22 able standards, as determined based on the 

23 measures, criteria, goals, or programs estab24 lished under subparagraph (A), to implement 

25 specific corrective actions and use specified 


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1 amounts of the administrative grants under this 

2 title provided to such States to improve per3 formance; and 

4 ‘‘(D) based on the data and other informa5 tion provided under subparagraph (B)— 

6 ‘‘(i) to the extent the Secretary of 

7 Labor determines funds are available after 

8 providing grants to States under this title 

9 for the administration of State laws, recog10 nize and make awards to States for per11 formance improvement, or performance ex12 ceeding the criteria or meeting the goals 

13 established under subparagraph (A); or 

14 ‘‘(ii) to the extent the Secretary of 

15 Labor determines funds are available after 

16 providing grants to States under this title 

17 for the administration of State laws, pro18 vide incentive funds to high-performing 

19 States based on the measures, criteria, 

20 goals, or programs established under sub21 paragraph (A). 

22 ‘‘(2) ENFORCEMENT.—Whenever the Secretary 

23 of Labor, after reasonable notice and opportunity for 

24 hearing to the State agency charged with the admin25 istration of the State law, finds that there is a failVerDate Sep 11 2014 18:49 Aug 01, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S4244.IS S4244

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1 ure to comply substantially with the requirements of 

2 paragraph (1), the Secretary of Labor shall notify 

3 such State agency that further payments will not be 

4 made to the State until the Secretary of Labor is 

5 satisfied that there is no longer any such failure. 

6 Until the Secretary of Labor is so satisfied, such 

7 Secretary shall make no future certification to the 

8 Secretary of the Treasury with respect to the 

9 State.’’. 

10 (2) EFFECTIVE DATE.—The amendments made 

11 by this subsection shall take effect on the date of en12 actment of this Act. 

13 (f) FUNDING.—Out of any money in the Treasury of 

14 the United States not otherwise appropriated, there are 

15 appropriated to the Secretary of Labor $3,000,000,000 to 

16 assist States in carrying out the amendments made by this 

17 section, which may include regional or multi-State efforts. 

18 Amounts appropriated under the preceding sentence shall 

19 remain available until expended. 

Æ 


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