II

106TH CONGRESS

1ST SESSION S. 462

To amend the Internal Revenue Code of 1986, the Social Security Act,

the Wagner-Peyser Act, and the Federal-State Extended Unemployment

Compensation Act of 1970 to improve the method by which Federal

unemployment taxes are collected and to improve the method by which

funds are provided from Federal unemployment tax revenue for employment security administration, and for other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 24, 1999

Mr. DEWINE (for himself, Mr. COCHRAN, and Mr. VOINOVICH) introduced the

following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986, the Social

Security Act, the Wagner-Peyser Act, and the FederalState Extended Unemployment Compensation Act of

1970 to improve the method by which Federal unemployment taxes are collected and to improve the method

by which funds are provided from Federal unemployment

tax revenue for employment security administration, 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,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

3 ‘‘Employment Security Financing Act of 1999’’.

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

5 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—AMENDMENTS TO THE INTERNAL REVENUE CODE OF

1986

Sec. 101. Repeal of surtax.

Sec. 102. Conforming amendments to section 3304(a).

Sec. 103. Additional requirements for approval of State laws.

Sec. 104. Conforming amendments to section 3304(c).

Sec. 105. State unemployment fund defined.

Sec. 106. Definition of State ESAA.

Sec. 107. Collection of FUTA tax by State agencies.

Sec. 108. Payment of FUTA tax to State agencies.

Sec. 109. Repealer.

TITLE II—UNEMPLOYMENT TRUST FUND ACCOUNTS

Sec. 201. Establishment of unemployment accounts.

Sec. 202. Repeal of subsections (a) and (b) of section 901 of the Social Security Act.

Sec. 203. Expenditures for administration.

Sec. 204. Transfer of amounts attributable to reduced credits.

Sec. 205. Establishment of revolving fund.

Sec. 206. Treatment of excess ESAA amounts.

Sec. 207. Treatment of excess FUA amounts.

Sec. 208. Repeal of reporting requirement.

Sec. 209. Treatment of extended unemployment compensation account.

Sec. 210. Treatment of amounts elected by ineligible States.

Sec. 211. Use of Reed Act funds.

Sec. 212. Provisions relating to establishment of Unemployment Trust Fund.

Sec. 213. Separate book accounts.

Sec. 214. Payments to State agencies and Railroad Retirement Board.

Sec. 215. Establishment of EUCA account excess and transfers.

Sec. 216. Repeal of interfund borrowing authority.

TITLE III—GRANTS TO STATES FOR EMPLOYMENT SECURITY

ADMINISTRATION

Sec. 301. Repeal of sections 301 and 302 of the Social Security Act.

Sec. 302. State requirements.

Sec. 303. Interpretation of methods of administration requirement.

TITLE IV—EXTENDED UNEMPLOYMENT COMPENSATION

Sec. 401. Extended unemployment compensation.

TITLE V—FEDERAL EMPLOYMENT SECURITY SERVICE
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Sec. 501. Amendment to statement of purposes.

Sec. 502. Purpose of Employment Security Service.

Sec. 503. Transfer of real property.

Sec. 504. Repeal of Federal appropriations authority.

Sec. 505. Use of public employment service funds.

Sec. 506. Repeal of Federal use of funds requirements.

Sec. 507. Repeal of Federal planning and fiscal requirements.

TITLE VI—ADVANCES TO STATE UNEMPLOYMENT

COMPENSATION BENEFIT ACCOUNTS

Sec. 601. Transfers from the Federal Unemployment Account.

Sec. 602. Use of transferred funds.

Sec. 603. Determination of interest rate.

Sec. 604. Revolving loan fund.

TITLE VII—CONFORMING AMENDMENTS

Sec. 701. Balanced budget amendments.

Sec. 702. Repeal of Federal unemployment tax amendment.

1 TITLE I—AMENDMENTS TO THE

2 INTERNAL REVENUE CODE

3 OF 1986

4 SEC. 101. REPEAL OF SURTAX.

5 Section 3301 of the Internal Revenue Code of 1986

6 is amended to read as follows:

7 ‘‘SEC. 3301. RATE OF TAX.

8 ‘‘There is hereby imposed on every employer (as de9 fined in section 3306(a)) for each calendar year an excise

10 tax, with respect to having individuals in his employ, equal

11 to—

12 ‘‘(1) 6.2 percent in the case of calendar years

13 1988 through 1999; or

14 ‘‘(2) 6.0 percent in the case of calendar year

15 2000 and each calendar year thereafter;
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1 of the total wages (as defined in section 3306(b)) paid

2 by him during the calendar year with respect to employ3 ment (as defined in section 3306(c)). Effective for cal4 endar year 2001 and each calendar year thereafter, the

5 tax, including accounts receivable from prior years, shall

6 be collected by the State agencies responsible for adminis7 tration of the State unemployment compensation law as

8 agents for the Secretary of the Treasury. Amounts col9 lected for years prior to calendar year 2004 by each State

10 agency responsible for administration of the State unem11 ployment compensation law shall be immediately deposited

12 in the employment security administration account estab13 lished pursuant to section 904 of the Social Security Act.

14 Amounts collected for calendar year 2004 and years there15 after shall be immediately deposited in the State’s employ16 ment security administration account established pursuant

17 to section 904 of the Social Security Act. Amounts col18 lected after January 1, 2001, by the Internal Revenue

19 Service shall be immediately deposited in the employment

20 security transition account within the Unemployment

21 Trust Fund established pursuant to section 904 of the So22 cial Security Act.’’.
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1 SEC. 102. CONFORMING AMENDMENTS TO SECTION 3304(a).

2 (a) LIMITATION ON USE OF FUNDS.—Paragraph (4)

3 of section 3304(a) of the Internal Revenue Code of 1986

4 is amended to read as follows:

5 ‘‘(4) all money withdrawn from the unemploy6 ment compensation benefit account of the unemploy7 ment fund of the State shall be used solely in the

8 payment of unemployment compensation, exclusive

9 of expenses of administration, and for refunds of

10 sums erroneously paid into such fund and refunds

11 paid in accordance with the provisions of section

12 3305(b); except that—

13 ‘‘(A) an amount equal to the amount of

14 employee payments into the unemployment fund

15 of a State may be used in the payment of cash

16 benefits to individuals with respect to their dis17 ability, exclusive of expenses of administration;

18 ‘‘(B) the amounts specified by section

19 903(c)(2) of the Social Security Act may, sub20 ject to the conditions prescribed in such section,

21 be used for expenses incurred by the State for

22 administration of its unemployment compensa23 tion law and public employment offices;

24 ‘‘(C) nothing in this paragraph shall be

25 construed to prohibit deducting an amount

26 from unemployment compensation otherwise
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1 payable to an individual and using the amount

2 so deducted to apply for health insurance, or

3 the withholding of Federal, State, or local indi4 vidual income tax, if the individual elected to

5 have such deduction made and such deduction

6 was made under a program approved by the

7 Secretary of Labor;

8 ‘‘(D) amounts may be deducted from un9 employment benefits and used to repay overpay10 ments as provided in section 303(g) of the So11 cial Security Act;

12 ‘‘(E) amounts may be withdrawn for the

13 payment of short-time compensation under a

14 plan approved by the Secretary of Labor; and

15 ‘‘(F) amounts may be withdrawn for the

16 payment of allowances under a self-employment

17 assistance program (as defined in section

18 3306(t));’’.

19 (b) EXTENDED COMPENSATION.—Paragraph (11) of

20 section 3304(a) of the Internal Revenue Code of 1986 is

21 amended to read as follows:

22 ‘‘(11) extended compensation shall be payable

23 as provided by State law conforming to the Federal24 State Extended Unemployment Compensation Act of

25 1970;’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall take effect on January 1, 2000.

3 SEC. 103. ADDITIONAL REQUIREMENTS FOR APPROVAL OF

4 STATE LAWS.

5 (a) IN GENERAL.—Section 3304(a) of the Internal

6 Revenue Code of 1986 is amended—

7 (1) by striking ‘‘and’’ at the end of paragraph

8 (18);

9 (2) by striking the period at the end of para10 graph (19) and inserting a semicolon; and

11 (3) by adding after paragraph (19) the follow12 ing:

13 ‘‘(20) funds provided to such State under title

14 IX of the Social Security Act for public employment

15 services shall be used—

16 ‘‘(A) for determining whether individuals

17 claiming unemployment compensation under

18 State laws conforming to this section are avail19 able to accept suitable work and have not re20 fused suitable work as prescribed by the State

21 unemployment compensation law;

22 ‘‘(B) for job search and placement services

23 to individuals claiming unemployment com24 pensation benefits and other job seekers includ25 ing counseling, testing, occupational and labor
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1 market information, assessment, and referral to

2 employers; and

3 ‘‘(C) for appropriate recruitment services

4 and special technical services for employers;

5 ‘‘(21) the State agency responsible for adminis6 tration of the State unemployment compensation law

7 shall submit annual reports to the governor of the

8 State providing information on services and out9 comes, and such reports shall include information

10 with respect to—

11 ‘‘(A) the proportion of the individuals

12 claiming compensation provided employment

13 services in accordance with titles III and IX of

14 the Social Security Act;

15 ‘‘(B) the proportion of employers provided

16 employment services in accord with titles III

17 and IX of the Social Security Act;

18 ‘‘(C) information regarding referrals and

19 placements provided in accord with titles III

20 and IX of the Social Security Act; and

21 ‘‘(D) information on other services such as

22 counseling and testing provided in accord with

23 titles III and IX of the Social Security Act; and

24 ‘‘(22) the State agency responsible for adminis25 tration of the State unemployment compensation law
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1 shall, effective for calendar year 2001 and each cal2 endar year thereafter, collect the Federal unemploy3 ment tax imposed pursuant to section 3301 as the

4 agent of the Secretary of the Treasury.’’

5 (b) EFFECTIVE DATE.—The amendments made by

6 subsection (a) shall take effect on January 1, 2001.

7 SEC. 104. CONFORMING AMENDMENTS TO SECTION 3304(c).

8 Subsection (c) of section 3304 of the Internal Reve9 nue Code of 1986 is amended to read as follows:

10 ‘‘(c) CERTIFICATION.—On October 31 of each tax11 able year, the Secretary of Labor shall certify to the Sec12 retary of the Treasury each State whose law he has pre13 viously approved, except that he shall not certify any State

14 which, after reasonable notice and opportunity for hearing

15 to the State agency, the Secretary of Labor finds has

16 amended its law so that it no longer contains the provi17 sions specified in subsection (a) or has with respect to the

18 12-month period ending on such October 31 failed to com19 ply substantially with any such provision in such sub20 section. No finding of a failure to comply substantially

21 with any provision in paragraph (5) of subsection (a) shall

22 be based on an application or interpretation of State law—

23 ‘‘(1) until all administrative review provided for

24 under the laws of the State has been exhausted,
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1 ‘‘(2) with respect to which the time for judicial

2 review provided by the laws of the State has not ex3 pired, or

4 ‘‘(3) with respect to which any judicial review

5 is pending.

6 On October 31 of any taxable year, the Secretary of Labor

7 shall not certify any State which, after reasonable notice

8 and opportunity for hearing to the State agency, the Sec9 retary of Labor finds has failed to amend its law so that

10 it contains each of the provisions required by law to be

11 included therein (including provisions relating to the Fed12 eral-State Extended Unemployment Compensation Act of

13 1970, as required under subsection (a)(11)), or has, with

14 respect to the 12-month period ending on such October

15 31, failed to comply substantially with any such provision.

16 No State shall be required to enact a State law to meet

17 the performance measures or other standards established

18 by the Secretary of Labor pursuant to the Government

19 Performance Results Act of 1993.’’

20 SEC. 105. STATE UNEMPLOYMENT FUND DEFINED.

21 (a) IN GENERAL.—Subsection (f) of section 3306 of

22 the Internal Revenue Code of 1986 is amended to read

23 as follows:

24 ‘‘(f) For purposes of this chapter, the term ‘unem25 ployment fund’ means a special fund, established under
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1 a State law and administered by a State agency, for the

2 payment of compensation. Any sums standing to the un3 employment benefit accounts of the State agency in the

4 Unemployment Trust Fund established by section 904 of

5 the Social Security Act shall be deemed to be a part of

6 the unemployment fund of the State, and no sums paid

7 out of the Unemployment Trust Fund to such State agen8 cy shall cease to be a part of the unemployment fund of

9 the State until expended by such State agency. An unem10 ployment fund shall be deemed to be maintained during

11 a taxable year only if throughout such year, or such por12 tion of the year as the unemployment fund was in exist13 ence, no part of the moneys of such fund was expended

14 for any purpose other than the payment of compensation

15 and for refunds of sums erroneously paid into such fund

16 and refunds paid in accordance with the provisions of sec17 tion 3305(b); except that—

18 ‘‘(1) an amount equal to the amount of em19 ployee payments into the unemployment compensa20 tion benefit account within the fund of a State may

21 be used in the payment of cash benefits drawn from

22 the unemployment compensation benefit account of

23 the State within the Unemployment Trust Fund to

24 individuals with respect to their disability, exclusive

25 of expenses of administration;
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1 ‘‘(2) the amounts specified by section 903(c)(2)

2 of the Social Security Act may, subject to the condi3 tions prescribed in such section, be used for ex4 penses incurred by the State for administration of

5 its unemployment compensation law, and public em6 ployment services;

7 ‘‘(3) nothing in this subsection shall be con8 strued to prohibit deducting any amount from unem9 ployment compensation otherwise payable to an indi10 vidual and using the amount so deducted to pay for

11 health insurance, or the withholding of Federal,

12 State, or local individual income tax, if the individ13 ual elected to have such deduction made and such

14 deduction was made under a program approved by

15 the Secretary of Labor;

16 ‘‘(4) amounts may be deducted from unemploy17 ment benefits drawn from the State’s unemployment

18 compensation benefit account within the Unemploy19 ment Trust Fund and used to repay overpayments

20 as provided in section 303(g) of the Social Security

21 Act;

22 ‘‘(5) amounts may be withdrawn from the

23 State’s unemployment compensation benefit account

24 within the Unemployment Trust Fund for the pay-
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1 ment of short-time compensation under a plan ap2 proved by the Secretary of Labor; and

3 ‘‘(6) amounts may be withdrawn from the

4 State’s unemployment compensation benefit account

5 within the Unemployment Trust Fund for the pay6 ment of allowances under a self-employment assist7 ance program (as defined in subsection (t)).’’

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

9 subsection (a) shall take effect on October 1, 2000.

10 SEC. 106. DEFINITION OF STATE ESAA.

11 (a) IN GENERAL.—Section 3306 of the Internal Rev12 enue Code of 1986 is amended by adding at the end the

13 following:

14 ‘‘(u) STATE EMPLOYMENT SECURITY ADMINISTRA15 TION ACCOUNT.—For purposes of this chapter, the term

16 ‘State employment security administration account’ means

17 a special account within the Unemployment Trust Fund

18 established pursuant to section 904 of the Social Security

19 Act for the purpose of providing administrative funds to

20 pay the cost of services performed by the State agency

21 in accord with section 3304 and titles III and IX of the

22 Social Security Act. No sums paid out of the account to

23 the State agency shall cease to be a part of the Unemploy24 ment Trust Fund until expended by such State agency.’’
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall take effect on October 1, 2000.

3 SEC. 107. COLLECTION OF FUTA TAX BY STATE AGENCIES.

4 (a) IN GENERAL.—Subsection (a) of section 3501 of

5 the Internal Revenue Code of 1986 is amended to read

6 as follows:

7 ‘‘(a) GENERAL RULE.—(1) The taxes imposed by this

8 subtitle shall be collected by the Secretary and shall be

9 paid into the Treasury of the United States as internal10 revenue collections, except that effective for calendar year

11 2001 and calendar years thereafter the tax imposed by

12 section 3301 shall be collected by the State agencies re13 sponsible for administration of the State unemployment

14 law (or any other State agencies specifically identified by

15 State law) as agents for the Secretary. Amounts collected

16 by each State agency shall be paid into the treasury to

17 the credit of the State employment security administration

18 account of the State as prescribed in section 3301 and

19 titles III and IX of the Social Security Act. Amounts col20 lected by the Internal Revenue Service after January 1,

21 2001, with respect to the tax imposed by section 3301

22 shall be paid into the Treasury of the United States to

23 the credit of the employment security transition account

24 within the Unemployment Trust Fund established pursu25 ant to section 904 of the Social Security Act.
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1 ‘‘(2) The Secretary is authorized to enter into agree2 ments with the State agencies administering State unem3 ployment compensation laws to assist with the administra4 tion of chapter 23 of the Internal Revenue Code of 1986.’’

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

6 subsection (a) shall take effect on October 1, 2000.

7 SEC. 108. PAYMENT OF FUTA TAX TO STATE AGENCIES.

8 (a) IN GENERAL.—The last sentence of section

9 6157(a) of the Internal Revenue Code of 1986 is amended

10 to read as follows: ‘‘The tax for any calendar quarter or

11 other period shall be computed as provided in subsection

12 (b) and the tax as so computed shall, except as otherwise

13 provided in subsection (c), be paid, effective for calendar

14 year 2001 and calendar years thereafter, to the State

15 agency responsible for administration of the State unem16 ployment compensation law as the agent of the Secretary.

17 Such taxes shall be paid quarterly.’’

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

19 subsection (a) shall take effect on October 1, 2000.

20 SEC. 109. REPEALER.

21 Paragraph (2) of section 6201(b) of the Internal Rev22 enue Code of 1986 is repealed.
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1 TITLE II—UNEMPLOYMENT

2 TRUST FUND ACCOUNTS

3 SEC. 201. ESTABLISHMENT OF UNEMPLOYMENT ACCOUNTS.

4 (a) IN GENERAL.—Title IX of the Social Security Act

5 (42 U.S.C. 1395 et seq.) is amended by adding at the end

6 the following:

7 ‘‘STATE EMPLOYMENT SECURITY ADMINISTRATION

8 ACCOUNTS

9 ‘‘SEC. 911. There are hereby established in the Un10 employment Trust Fund, the following accounts:

11 ‘‘(1) A State employment security administra12 tion account for each State.

13 ‘‘(A) There is hereby appropriated to the

14 Unemployment Trust Fund for credit to the

15 employment security administration account for

16 each State—

17 ‘‘(i) for the fiscal year ending Septem18 ber 30, 2005, and for each fiscal year

19 thereafter, an amount equal to 100 percent

20 of the Federal unemployment tax, includ21 ing interest, penalties and additions to the

22 tax, received from collection of the tax and

23 covered into the State’s account; and
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1 ‘‘(ii) any amounts transferred to the

2 account pursuant to this section and sec3 tions 902 and 903.

4 ‘‘(B) At the end of the month following

5 January 1, 2004, and each month thereafter,

6 the Secretary of the Treasury shall transfer 2

7 percent of the amount collected and deposited

8 into each State employment security adminis9 tration account pursuant to subparagraph

10 (A)(i) to the supplemental employment security

11 administration account established pursuant to

12 this section and section 904.

13 ‘‘(C) At the end of the month following

14 January 1, 2004, and each month thereafter,

15 the Secretary of the Treasury shall transfer 2

16 percent of the amount collected and deposited

17 into each State employment security adminis18 tration account pursuant to subparagraph

19 (A)(i) to the Secretary of Labor employment se20 curity administration account established pur21 suant to this section and section 904.

22 ‘‘(2)(A) A supplemental employment security

23 administration account for the administration of em24 ployment security programs in accordance with this

25 title, title III, and section 3304 of the Internal Reve-
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1 nue Code of 1986 by States whose average civilian

2 labor force populations number less than 1,000,000.

3 ‘‘(B) There is hereby appropriated to the Un4 employment Trust Fund for credit to the supple5 mental employment security administration account,

6 for the fiscal year ending September 30, 2005, and

7 for each fiscal year thereafter—

8 ‘‘(i) an amount equal to 100 percent of the

9 amount transferred pursuant to paragraph

10 (1)(B); and

11 ‘‘(ii) amounts transferred to the account

12 pursuant to subparagraphs (C) and (D) of sec13 tion 901(f)(3) and sections 902 and 903.

14 ‘‘(3)(A) The Secretary of Labor employment se15 curity administration account for the Secretary of

16 Labor in carrying out administrative duties as pre17 scribed in this title, title III, and chapter 23 of the

18 Internal Revenue Code of 1986.

19 ‘‘(B) There is hereby appropriated to the Un20 employment Trust Fund for credit to the Secretary

21 of Labor employment security administration ac22 count, for the fiscal year ending September 30,

23 2005, and for each fiscal year thereafter an amount

24 equal to 100 percent of the amount transferred pur25 suant to paragraph (1)(C).
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1 ‘‘USE OF SPECIAL ADMINISTRATIVE FUNDS

2 ‘‘SEC. 912. There are hereby authorized to be made

3 available for expenditure out of the employment security

4 administration accounts maintained by the Secretary of

5 Treasury for each State for fiscal years 2001 through

6 2004 such amounts, not to exceed $245,000,000 for each

7 year, as are requested by the States from their respective

8 State employment security administration accounts, sub9 ject to appropriation by the legislative body of each State,

10 to be used only for—

11 ‘‘(1) determining whether individuals claiming

12 unemployment compensation under State laws con13 forming to section 3304 are available to accept suit14 able work and have not refused suitable work as pre15 scribed by the State unemployment law;

16 ‘‘(2) job search and placement services to indi17 viduals claiming unemployment compensation bene18 fits and other job seekers including counseling, test19 ing, occupational and labor market information, as20 sessment, and referral to employers;

21 ‘‘(3) appropriate recruitment services and spe22 cial technical services for employers; and

23 ‘‘(4) collection of the Federal Unemployment

24 Tax imposed pursuant to chapter 23 of the Internal

25 Revenue Code of 1986.
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1 Such amounts shall be available for State appropriation

2 in addition to amounts otherwise appropriated by Con3 gress.’’.

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

5 subsection (a) shall take effect on October 1, 2000.

6 SEC. 202. REPEAL OF SUBSECTIONS (a) AND (b) OF SECTION

7 901 OF THE SOCIAL SECURITY ACT.

8 (a) IN GENERAL.—Subsections (a) and (b) of section

9 901 of the Social Security Act (42 U.S.C. 1101) are re10 pealed.

11 (b) EFFECTIVE DATE.—This section shall take effect

12 on October 1, 2004.

13 SEC. 203. EXPENDITURES FOR ADMINISTRATION.

14 (a) IN GENERAL.—Section 901(c) of the Social Secu15 rity Act (42 U.S.C. 1101(c)) is amended to read as fol16 lows:

17 ‘‘Administrative Expenditures

18 ‘‘(c)(1) There are hereby authorized to be made avail19 able for expenditure out of the employment security ad20 ministration accounts maintained by the Secretary of the

21 Treasury for the States, effective for the Federal fiscal

22 year beginning October 1, 2004, and each fiscal year

23 thereafter, such amounts as are requested by the States

24 from their respective State employment security adminis25 tration accounts, subject to appropriation by the legisla-
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1 tive body of each State (not in excess of 140 percent of

2 the amount appropriated to the State agency from Federal

3 employment security funds for the 12-month period end4 ing September 30 of the previous year), only for the pur5 pose of—

6 ‘‘(A) assisting the State in the administration

7 of its unemployment compensation laws as provided

8 in title III (including administration pursuant to

9 agreements under any Federal unemployment com10 pensation law),

11 ‘‘(B) providing public employment services in

12 accordance with section 7 of the Wagner-Peyser Act,

13 ‘‘(C) carrying into effect section 4103 of title

14 38, United States Code,

15 ‘‘(D) collection of amounts due under chapter

16 23 of the Internal Revenue Code of 1986, and

17 ‘‘(E) administration of statistical programs es18 sential for development of estimates of the gross do19 mestic product and other national statistical series,

20 including those related to employment and unem21 ployment.

22 Amounts requested by the State but not appropriated by

23 the State legislative body for the fiscal year for which such

24 amounts are requested shall be transferred to the State’s
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1 unemployment compensation benefit account as of the be2 ginning of the following Federal fiscal year.

3 ‘‘(2) There are hereby authorized to be made avail4 able for expenditure by States whose average civilian labor

5 force populations number less than 1,000,000, out of the

6 supplemental employment security administration ac7 count, $5,000,000 for each of fiscal years 2001 through

8 2004 only for—

9 ‘‘(A) determining whether individuals claiming

10 unemployment compensation under State laws con11 forming to section 3304 of the Internal Revenue

12 Code of 1986 are available to accept suitable work

13 and have not refused suitable work as prescribed by

14 the State unemployment compensation law;

15 ‘‘(B) job search and placement services to indi16 viduals claiming unemployment compensation bene17 fits and other job seekers including counseling, test18 ing, occupational and labor market information, as19 sessment, and referral to employers; and

20 ‘‘(C) appropriate recruitment services and spe21 cial technical services for employers.

22 Such amounts shall be available for State appropriation

23 in addition to amounts otherwise appropriated by Con24 gress.
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1 ‘‘(3) There are hereby authorized to be made avail2 able for expenditure by States whose average civilian labor

3 force populations number less than 1,000,000, amounts

4 out of the supplemental employment security administra5 tion account for the fiscal year ending September 30,

6 2005, and for each year thereafter. Such amounts shall

7 be allocated to the States by the Council of States with

8 Lesser Populations (established under paragraph (4)),

9 subject to appropriation by the legislative body of each

10 State, only for the purpose of—

11 ‘‘(A) administration of the State’s unemploy12 ment compensation laws;

13 ‘‘(B) providing public employment services in

14 accord with section 7 of the Wagner-Peyser Act;

15 ‘‘(C) administration of section 4103 of title 38,

16 United States Code;

17 ‘‘(D) collection of amounts due under chapter

18 23 of the Internal Revenue Code of 1986; and

19 ‘‘(E) administration of statistical programs es20 sential for development of estimates of the gross do21 mestic product and other national statistical series,

22 including those related to employment and unem23 ployment.

24 ‘‘(4)(A) The Council of States with Lesser Popu25 lations is hereby established for the purpose of determin-
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1 ing the methodology by which amounts available from the

2 supplemental employment Security administration account

3 are to be allocated. The council shall be composed of 1

4 representative appointed by the Governor of each State

5 with an average civilian labor force which numbers less

6 than 1,000,000 for the calendar year ending prior to the

7 Federal fiscal year for which allocations are to be made.

8 The council shall be reconstituted each year prior to the

9 beginning of the ensuing Federal fiscal year.

10 ‘‘(B) The council shall determine amounts to be allo11 cated to the States, except that no State’s allocation for

12 any fiscal year, when added to the amount available pursu13 ant to section 901(b)(1), shall be less than the amount

14 appropriated to such State from the employment security

15 administration account for fiscal year 1995, plus an ad16 justment for increased administrative costs incurred after

17 1995.

18 ‘‘(C) The council shall notify the Secretary of the

19 Treasury prior to each fiscal year of the amounts to be

20 allocated to each State. If the council fails to determine

21 amounts to be allocated for a fiscal year, such amounts

22 shall be carried over and maintained in the supplemental

23 employment security Administration Account and may be

24 allocated by the council for following Federal fiscal years.
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1 ‘‘(D) Amounts allocated by the council, but not ap2 propriated by the State legislative body for the fiscal year

3 for which allocation was made, shall be transferred to the

4 State employment security administration accounts of all

5 States as of the beginning of the following Federal fiscal

6 year. Each State’s share of the funds to be transferred

7 shall bear the same ratio to the total amount to be so

8 transferred as the amount of wages subject to tax under

9 section 3301 of the Internal Revenue Code of 1986 during

10 the preceding calendar year which are determined by the

11 Secretary of Labor to be attributable to the State, bears

12 to the total amount of wages subject to such tax during

13 such year.

14 ‘‘(5)(A) There are hereby authorized to be made

15 available for expenditure out of the Secretary of Labor

16 employment security administration account for the fiscal

17 year ending September 30, 2005, and for each fiscal year

18 thereafter such amounts (not in excess of 140 percent of

19 the amount appropriated by Congress for the Department

20 of Labor from the employment security administration ac21 count for the prior year) as Congress may deem appro22 priate for the necessary expenses of the Department of

23 Labor for the performance of its functions under—

24 ‘‘(i) this title and titles III and XII,
26

•S 462 IS

1 ‘‘(ii) chapter 23 of the Internal Revenue Code

2 of 1986,

3 ‘‘(iii) chapter 41 (except section 4103) of title

4 38, United States Code,

5 ‘‘(iv) Federal unemployment compensation laws

6 effective as of October 1, 1999,

7 ‘‘(v) administration of statistical programs es8 sential for development of estimates of the gross do9 mestic product and other national statistical series,

10 including those related to employment and unem11 ployment,

12 ‘‘(vi) establishment and maintenance of the em13 ployment security system in accordance with the

14 Wagner-Peyser Act, and

15 ‘‘(vii) payments of the Federal share of annual

16 amortization costs of the unfunded liability for the

17 State employment security agencies with independ18 ent retirement plans as determined by the Secretary

19 of Labor.

20 ‘‘(B) Amounts appropriated under this paragraph, if

21 not obligated within the fiscal year for which appropriation

22 was made, shall be transferred to the State employment

23 security administration accounts. Each State’s share shall

24 be determined as provided for distribution of funds from
27

•S 462 IS

1 the employment security transition account pursuant to

2 subsection (e)(3)(D).

3 ‘‘(C) The term ‘necessary expenses’, as used in this

4 paragraph, shall include the expense of reimbursing a

5 State for salaries and other expenses of employees of such

6 State temporarily assigned or detailed to duty with the

7 Department of Labor and of paying such employees for

8 travel expenses, transportation of household goods, and

9 per diem in lieu of subsistence while away from their regu10 lar duty stations in the State, at rates authorized by law

11 for civilian employees of the Federal Government.

12 ‘‘(6) The Secretary of the Treasury is directed, for

13 the fiscal year ending September 30, 2005, and each fiscal

14 year thereafter, to pay from the Secretary of Labor em15 ployment security Administration Account into the treas16 ury as miscellaneous receipts the amount determined by

17 the Secretary of Labor to be allocated to the treasury de18 partment to cover costs of the Department of the Treasury

19 for the performance of its functions under—

20 ‘‘(A) this title and titles III and XII, including

21 the expenses of banks for servicing unemployment

22 benefit payment and clearing accounts which are off23 set by the maintenance of balances of treasury funds

24 with such banks,
28

•S 462 IS

1 ‘‘(B) chapter 23 of the Internal Revenue Code

2 of 1986, and

3 ‘‘(C) any Federal unemployment compensation

4 law with respect to which responsibility for adminis5 tration is vested in the Secretary of Labor.’’.

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

7 subsection (a) shall take effect on October 1, 2000.

8 SEC. 204. TRANSFER OF AMOUNTS ATTRIBUTABLE TO RE9 DUCED CREDITS.

10 (a) IN GENERAL.—Section 901(d) of the Social Secu11 rity Act (42 U.S.C. 1101(d)) is amended to read as fol12 lows:

13 ‘‘Additional Tax Attributable to Reduced Credits

14 ‘‘(d)(1) The Secretary of the Treasury is directed to

15 transfer from the employment security administration ac16 count of each State subject to the reduced credits provi17 sion of section 3302(c)(3) of the Internal Revenue Code

18 of 1986—

19 ‘‘(A) to the Federal unemployment account, an

20 amount equal to the amount by which—

21 ‘‘(i) 100 percent of the additional tax re22 ceived under chapter 23 of the Internal Reve23 nue Code of 1986 with respect to the State by

24 reason of the reduced credits provisions of sec25 tion 3302(c)(3) of such Code and covered into
29

•S 462 IS

1 the Treasury for the repayment of advances

2 made to the State under section 1201, exceeds

3 ‘‘(ii) the amount transferred to the account

4 of such State pursuant to subparagraph (B) of

5 this paragraph. Any amount transferred pursu6 ant to this subparagraph shall be credited

7 against, and shall operate to reduce, that bal8 ance of advances, made under section 1201 to

9 the State, with respect to which employers paid

10 such additional tax; and

11 ‘‘(B) to the unemployment compensation benefit

12 account (in the Unemployment Trust Fund) of the

13 State with respect to which employers paid such ad14 ditional tax, an amount equal to the amount by

15 which such additional tax received and covered into

16 the treasury exceeds that balance of advances, made

17 under section 1201 to the State, with respect to

18 which employers paid such additional tax.

19 ‘‘(2) Transfers under this subsection shall be as of

20 the beginning of the month succeeding the month in which

21 the moneys were credited to the employment security ad22 ministration account of the State.’’.

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

24 subsection (a) shall take effect on October 1, 2000.
30

•S 462 IS

1 SEC. 205. ESTABLISHMENT OF REVOLVING FUND.

2 (a) IN GENERAL.—Section 901(e) of the Social Secu3 rity Act (42 U.S.C. 1101(e)) is amended to read as fol4 lows:

5 ‘‘Revolving Fund

6 ‘‘(e)(1) There is hereby established in the treasury

7 a revolving fund within the Federal unemployment ac8 count established pursuant to section 904 which shall be

9 available to make the advances authorized by this sub10 section. There are hereby authorized to be appropriated,

11 without fiscal year limitation, to such revolving fund such

12 amounts as may be necessary for the purposes of this sec13 tion.

14 ‘‘(2) The Secretary of the Treasury is directed to ad15 vance at the request of a State from the revolving fund

16 to the State employment security administration account

17 maintained for the State such amounts as may be re18 quested for the purposes set forth in this title, title III,

19 and section 3304 of the Internal Revenue Code of 1986.

20 ‘‘(3) Advances to the State employment security ad21 ministration account of a State made under this sub22 section shall bear interest until repaid at a rate equal to

23 the average rate of interest (computed as of the end of

24 the calendar month next preceding the date of such ad25 vance) borne by all interest-bearing obligations of the

26 United States then forming a part of the public debt; ex-
31

•S 462 IS

cept that where such average rate is not a multiple of 1 1 ⁄8

2 of 1 percent, the rate of interest shall be the multiple of

1 3 ⁄8 of 1 percent next lower than such average rate.

4 ‘‘(4) Advances to the State employment security ad5 ministration account of a State made under this sub6 section, plus interest accrued thereon, shall be repaid by

7 the State, and may be repaid at the request of a State

8 by the transfer, from the State employment security ad9 ministration account of such State to the revolving fund.

10 Any amount transferred as a repayment under this para11 graph shall be credited against, and shall operate to re12 duce, any balance of advances (plus accrued interest) re13 payable under this subsection.’’.

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

15 subsection (a) shall take effect on October 1, 2000.

16 SEC. 206. TREATMENT OF EXCESS ESAA AMOUNTS.

17 Section 901 of the Social Security Act (42 U.S.C.

18 1101 et seq.) is amended by adding at the end the follow19 ing:

20 ‘‘Treatment of Excess ESAA Amounts

21 ‘‘(f)(1) The Secretary of the Treasury shall determine

22 as of the close of the fiscal year ending September 30,

23 2002, and each fiscal year thereafter, the excess and the

24 net balance of amounts in the State employment security

25 administration account maintained for each State.
32

•S 462 IS

1 ‘‘(2) The excess in the State employment security ad2 ministration account for each State as of the close of any

3 fiscal year is the amount by which the net balance in such

4 account as of such time (after the application of sections

5 902 and 903 and paragraph (3)(B) of this subsection) ex6 ceeds the net balance in the State employment security

7 administration account for such State as of the close of

8 the previous fiscal year.

9 ‘‘(3)(A) The excess in the State employment security

10 administration account of each State determined as pro11 vided in paragraph (2) as of the close of any fiscal year

12 ending after September 30, 2006, not to exceed 140 per13 cent of the net balance at the close of the previous fiscal

14 year, shall be retained (as of the beginning of the succeed15 ing fiscal year) in the State employment security adminis16 tration account for the State.

17 ‘‘(B) The amount of the excess determined not to be

18 retained as provided in paragraph (3)(A) as of the close

19 of any fiscal year ending after September 30, 2006, shall

20 be transferred (as of the beginning of the succeeding fiscal

21 year) to the unemployment compensation benefit account

22 of the State in the Unemployment Trust Fund.

23 ‘‘(C)(i) At the close of each of fiscal years 2000

24 through 2003, there shall be transferred to the supple25 mental employment security administration account, out
33

•S 462 IS

1 of the employment security administration account,

2 $5,000,000 only for—

3 ‘‘(I) determining whether individuals claiming

4 unemployment compensation under State laws con5 forming to section 3304 of the Internal Revenue

6 Code of 1986 are available to accept suitable work

7 and have not refused suitable work as prescribed by

8 the State unemployment compensation law;

9 ‘‘(II) job search and placement services to indi10 viduals claiming unemployment compensation bene11 fits and other job seekers including counseling, test12 ing, occupational and labor market information, as13 sessment, and referral to employers;

14 ‘‘(III) appropriate recruitment services and spe15 cial technical services for employers; and

16 ‘‘(IV) collection of the Federal unemployment

17 tax imposed pursuant to section 3301 of the Inter18 nal Revenue Code of 1986.

19 ‘‘(ii) At the close of each of fiscal years 2000 through

20 2003, there shall be transferred to the State employment

21 security administration accounts, out of the employment

22 security administration account, $245,000,000 only for—

23 ‘‘(I) determining whether individuals claiming

24 unemployment compensation under State laws con25 forming to section 3304 of the Internal Revenue
34

•S 462 IS

1 Code of 1986 are available to accept suitable work

2 and have not refused suitable work as prescribed by

3 the State unemployment compensation law;

4 ‘‘(II) job search and placement services to indi5 viduals claiming unemployment compensation bene6 fits and other job seekers including counseling, test7 ing, occupational and labor market information, as8 sessment, and referral to employers;

9 ‘‘(III) appropriate recruitment services and spe10 cial technical services for employers; and

11 ‘‘(IV) collection of taxes under chapter 23 of

12 the Internal Revenue Code of 1986.

13 ‘‘(iii) Each State’s share of the funds to be trans14 ferred to the State employment security administration ac15 counts shall bear the same ratio to the total amount to

16 be transferred to such accounts as the amount of wages

17 subject to tax under chapter 23 of the Internal Revenue

18 Code of 1986 during the preceding calendar year which

19 are determined by the Secretary of Labor to be attrib20 utable to the State, bears to the total amount of wages

21 subject to such tax during such year.

22 ‘‘(D) As of the close of the fiscal year ending Septem23 ber 30, 2004, 96 percent of the amount in the employment

24 security administration account shall be transferred as of

25 October 1, 2004, to the State employment security admin-
35

•S 462 IS

1 istration accounts of the States, 2 percent shall be trans2 ferred as of October 1, 2004, to the supplemental employ3 ment security administration account, and 2 percent shall

4 be transferred as of October 1, 2004, to the Secretary of

5 Labor employment security administration account. Each

6 State’s share of the funds to be transferred to the State

7 employment security administration accounts shall bear

8 the same ratio to the total amount to be transferred to

9 such accounts as the amount of wages subject to tax under

10 chapter 23 of the Internal Revenue Code of 1986 during

11 the preceding calendar year which are determined by the

12 Secretary of Labor to be attributable to the State, bears

13 to the total amount of wages subject to such tax during

14 such year. Such amounts shall be available for the pur15 poses set forth in subsection (b)(1).

16 ‘‘(E) As of October 31, 2000, and the end of each

17 month thereafter, 96 percent of the amount in the employ18 ment security transition account shall be transferred to

19 the State employment security administration accounts of

20 the States, 2 percent shall be transferred to the supple21 mental employment security administration account, and

22 2 percent shall be transferred to the Secretary of Labor

23 employment security administration account. Each State’s

24 share of the funds to be transferred to the State employ25 ment security administration accounts shall bear the same
36

•S 462 IS

1 ratio to the total amount to be transferred to such ac2 counts as the amount of wages subject to tax under chap3 ter 23 of the Internal Revenue Code of 1986 during the

4 preceding calendar year which are determined by the Sec5 retary of Labor to be attributable to the State, bears to

6 the total amount of wages subject to such tax during such

7 year.

8 ‘‘(4) For the purposes of this section, the net balance

9 in the employment security administration account and

10 the State employment security administration account

11 maintained for each State as of any time is the amount

12 in such account as of such time reduced by the sum of

13 the balance of advances (plus interest accrued thereon)

14 then repayable to the revolving fund established by sub15 section (d) of this section. The net balance in the State

16 employment security administration account maintained

17 for each State as of the beginning of any fiscal year shall

18 be determined after the disposition of the excess in such

19 account as of the close of the preceding fiscal year.’’.

20 SEC. 207. TREATMENT OF EXCESS FUA AMOUNTS.

21 (a) IN GENERAL.—Section 902 of the Social Security

22 Act (42 U.S.C. 1102) is amended by striking subsections

23 (a) and (b) and inserting the following:
37

•S 462 IS

1 ‘‘Treatment of Excess Amounts in the Federal

2 Unemployment Account

3 ‘‘(a) The amount, if any, by which the amount in the

4 Federal unemployment account as of the close of the fiscal

5 year ending September 30, 2004, and any fiscal year

6 thereafter exceeds the amount (determined by the Sec7 retary of Labor) equal to 0.25 percent of the total wages

8 subject (determined without limitation on amount) to con9 tributions under all State unemployment compensation

10 laws for the calendar year ending during the fiscal year

11 for which the excess is determined shall be transferred to

12 the State employment security administration account of

13 each State as of the beginning of the following fiscal year.

14 ‘‘State Allocation Formula

15 ‘‘(b) Each State’s share of the funds to be transferred

16 under subsection (a) shall bear the same ratio to the total

17 amount to be so transferred as the amount of wages sub18 ject to tax under section 3301 of the Internal Revenue

19 Code of 1986 during the preceding calendar year which

20 are determined by the Secretary of Labor to be attrib21 utable to the State, bears to the total amount of wages

22 subject to such tax during such year.’’.

23 (b) EFFECTIVE DATE.—The amendments made by

24 subsection (a) shall take effect on September 30, 2004.
38

•S 462 IS

1 SEC. 208. REPEAL OF REPORTING REQUIREMENT.

2 Section 902(c) of the Social Security Act (42 U.S.C.

3 1102(c)) is repealed.

4 SEC. 209. TREATMENT OF EXTENDED UNEMPLOYMENT

5 COMPENSATION ACCOUNT.

6 (a) IN GENERAL.—Section 903(a) of the Social Secu7 rity Act (42 U.S.C. 1103(a)) is amended to read as fol8 lows:

9 ‘‘Transfer of Excess Amounts in Extended

10 Unemployment Compensation Account

11 ‘‘(a)(1) As of the close of the fiscal year ending Sep12 tember 30, 2004, and the close of each subsequent fiscal

13 year, the excess in the extended unemployment compensa14 tion account (as determined under section 905(b)) shall

15 be transferred by the Secretary of the Treasury to the em16 ployment security administration accounts of the States

17 pursuant to such section and the remaining balance shall

18 be retained in the extended unemployment compensation

19 account.

20 ‘‘(2) Each State’s share of the excess to be distrib21 uted to the employment security administration accounts

22 of the States at the close of a fiscal year pursuant to para23 graph (1)—

24 ‘‘(A) shall be determined by the Secretary of

25 Labor and certified by such Secretary to the Sec-
39

•S 462 IS

1 retary of the Treasury before any transfer is made,

2 and

3 ‘‘(B) shall bear the same ratio to the total

4 amount to be so transferred as—

5 ‘‘(i) the amount of wages subject to tax

6 under section 3301 of the Internal Revenue

7 Code of 1986 during the preceding calendar

8 year which are determined by the Secretary of

9 Labor to be attributable to the State, bears to

10 ‘‘(ii) the total amount of wages subject to

11 such tax during such calendar year.’’.

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

13 subsection (a) shall take effect on September 30, 2004.

14 SEC. 210. TREATMENT OF AMOUNTS ELECTED BY INELI15 GIBLE STATES.

16 (a) IN GENERAL.—Section 903(b) of the Social Secu17 rity Act (42 U.S.C. 1103(b)) is amended to read as fol18 lows:

19 ‘‘Treatment of Amounts Elected by Ineligible States

20 ‘‘(b)(1) If the Secretary of Labor finds that on Octo21 ber 1 of any fiscal year—

22 ‘‘(A) a State is not eligible for certification

23 under section 303, or

24 ‘‘(B) the law of a State is not approvable under

25 section 3304 of the Internal Revenue Code of 1986,
40

•S 462 IS

1 then the amount available for transfer to such

2 State’s unemployment compensation benefit account

3 in the Unemployment Trust Fund shall, in lieu of

4 being so transferred, be transferred to the Federal

5 unemployment account as of the beginning of such

6 October 1. If, during the fiscal year beginning on

7 such October 1, the Secretary of Labor finds and

8 certifies to the Secretary of the Treasury that such

9 State is eligible for certification under section 303,

10 and the law of such State is approvable under sec11 tion 3304 of such Code, the Secretary of the Treas12 ury shall transfer such amount from the Federal un13 employment account to the unemployment com14 pensation benefit account of such State in the Un15 employment Trust Fund. If the Secretary of Labor

16 does not so find and certify to the Secretary of the

17 Treasury before the close of such fiscal year then

18 the amount which was available for transfer to such

19 State’s unemployment compensation benefit account

20 as of October 1 of such fiscal year shall (as of the

21 close of such fiscal year) become part of the Federal

22 unemployment account.

23 ‘‘(2) The amount which, but for this paragraph,

24 would be transferred to the unemployment compensation

25 benefit account of a State under subsection (a) of this sec-
41

•S 462 IS

1 tion or paragraph (1) of this subsection shall be reduced

2 (but not below zero) by the balance of advances made to

3 the State under section 1201. The sum by which such

4 amount is reduced shall—

5 ‘‘(A) be transferred to or retained in (as the

6 case may be) the Federal unemployment account,

7 and

8 ‘‘(B) be credited against, and operate to

9 reduce—

10 ‘‘(i) first, any balance of advances made

11 before September 13, 1960, to the State under

12 section 1201, and

13 ‘‘(ii) second, any balance of advances made

14 on or after September 13, 1960, to the State

15 under section 1201.’’.

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

17 subsection (a) shall take effect on October 1, 2000.

18 SEC. 211. USE OF REED ACT FUNDS.

19 (a) IN GENERAL.—Section 903(c) of the Social Secu20 rity Act (42 U.S.C. 1103(c)) is amended to read as fol21 lows:

22 ‘‘Use of Reed Act Funds

23 ‘‘(c)(1) Except as provided in paragraph (2),

24 amounts transferred to the unemployment compensation

25 benefit account of a State pursuant to subsections (a) and
42

•S 462 IS

1 (b) of this section shall be used only in the payment of

2 cash benefits to individuals with respect to their unem3 ployment, exclusive of expenses of administration.

4 ‘‘(2) A State may, pursuant to a specific appropria5 tion made by the legislative body of the State, use money

6 withdrawn from its unemployment compensation benefit

7 account in the payment of expenses incurred by it for the

8 administration of its unemployment compensation law and

9 public employment services, if and only if—

10 ‘‘(A) the purposes and amounts were specified

11 in the law making the appropriation,

12 ‘‘(B) the appropriation law did not authorize

13 the obligation of such money after the close of the

14 2-year period which began on the date of enactment

15 of the appropriation law,

16 ‘‘(C) the money is withdrawn and the expenses

17 are incurred after such date of enactment,

18 ‘‘(D)(i) the appropriation law limits the total

19 amount which may be obligated under such appro20 priation at any time to an amount which does not

21 exceed, at any such time, the amount by which—

22 ‘‘(I) the aggregate of the amounts trans23 ferred to the unemployment compensation bene24 fit account of such State pursuant to sub25 sections (a) and (b), exceeds
43

•S 462 IS

1 ‘‘(II) the aggregate of the amounts used by

2 the State pursuant to this subsection and

3 charged against the amounts transferred to the

4 unemployment compensation benefit account of

5 such State, and

6 ‘‘(ii) for purposes of clause (i), amounts used by

7 a State for administration shall be chargeable

8 against transferred amounts at the exact time the

9 obligation is entered into, and

10 ‘‘(E) the use of the money shall be accounted

11 for in accordance with standards established by each

12 State. Proceeds from the sale or transfer of real

13 property and other capital assets which were origi14 nally purchased with Federal funds provided under

15 this title or title III, may be used by a State agency

16 administering State law in accordance with such ti17 tles and section 3304 of the Internal Revenue Code

18 of 1986 to purchase or otherwise acquire real prop19 erty or other capital assets for a period of 2 years

20 after the date of sale or transfer. Proceeds from the

21 sale or transfer of real property remaining after

22 such 2-year period shall be deposited in the State’s

23 employment security administration account estab24 lished pursuant to section 904.

25 ‘‘(3)(A) If—
44

•S 462 IS

1 ‘‘(i) amounts transferred to the unemployment

2 compensation benefit account of a State pursuant to

3 subsections (a) and (b) of this section were used in

4 payment of unemployment benefits to individuals;

5 and

6 ‘‘(ii) the Governor of such State submits a re7 quest to the Secretary of Labor that such amounts

8 be restored under this paragraph, then the amounts

9 described in clause (i) shall be restored to the status

10 of funds transferred under subsections (a) and (b)

11 of this section which have not been used by eliminat12 ing any charge against amounts so transferred for

13 the use of such amounts in the payment of unem14 ployment benefits.

15 ‘‘(B) Subparagraph (A) shall apply only to the extent

16 that the amounts described in clause (i) of such subpara17 graph do not exceed the amount then in the State’s unem18 ployment compensation benefit account.

19 ‘‘(C) Subparagraph (A) shall not apply if the State

20 has a balance of advances made to its unemployment com21 pensation benefit account under title XII.

22 ‘‘(D) If the Secretary of Labor determines that the

23 requirements of this paragraph are met with respect to

24 any request, the Secretary shall notify the Governor of the

25 State that such requirements are met with respect to such
45

•S 462 IS

1 request and the amount restored under this paragraph.

2 Such restoration shall be as of the first day of the first

3 month following the month in which the notification is

4 made.’’.

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

6 subsection (a) shall take effect on October 1, 2000.

7 SEC. 212. PROVISIONS RELATING TO ESTABLISHMENT OF

8 UNEMPLOYMENT TRUST FUND.

9 (a) IN GENERAL.—Section 904(a) of the Social Secu10 rity Act (42 U.S.C. 1104(a)) is amended to read as fol11 lows:

12 ‘‘Establishment, Etc.

13 ‘‘(a) There is hereby established in the Treasury of

14 the United States a trust fund to be known as the Unem15 ployment Trust Fund (in this subchapter referred to as

16 the ‘Fund’). The Secretary of the Treasury is authorized

17 and directed to receive and hold in the Fund all moneys

18 deposited therein by a State agency from a State unem19 ployment fund. All moneys in the form of contributions

20 and payments in lieu of contributions under the State law

21 shall be deposited into the State’s unemployment com22 pensation benefit account established pursuant to this sec23 tion. All moneys collected by a State agency under chapter

24 23 of the Internal Revenue Code of 1986 and moneys

25 transferred or deposited under other sections of this title
46

•S 462 IS

1 or chapter 23 of the Internal Revenue Code of 1986 shall

2 be deposited into the State’s employment security adminis3 tration account. All moneys collected by the Internal Reve4 nue Service after January 1, 2001, under the provisions

5 of chapter 23 of the Internal Revenue Code of 1986 shall

6 be deposited into the employment security transition ac7 count of the Fund. Moneys collected by the Railroad Re8 tirement Board shall be deposited to the credit of the rail9 road unemployment insurance account or the railroad un10 employment insurance administration fund.’’.

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

12 subsection (a) shall take effect on October 1, 2000.

13 SEC. 213. SEPARATE BOOK ACCOUNTS.

14 (a) IN GENERAL.—Section 904(e) of the Social Secu15 rity Act (42 U.S.C. 1104(e)) is amended to read as fol16 lows:

17 ‘‘Separate Book Accounts

18 ‘‘(e)(1) The Fund shall be invested as a single fund,

19 but the Secretary of the Treasury shall maintain a sepa20 rate book account for the employment security transition

21 account, each State agency unemployment compensation

22 benefit account, the employment security administration

23 account for each State, the supplemental employment se24 curity administration account, the Secretary of Labor em25 ployment security administration account, the Federal un-
47

•S 462 IS

1 employment account, the extended unemployment com2 pensation account, the railroad unemployment insurance

3 account, and the railroad unemployment insurance admin4 istration fund and shall credit quarterly (on March 31,

5 June 30, September 30, and December 31, of each year)

6 to each account, on the basis of the average daily balance

7 of such account, a proportionate part of the earnings of

8 the Fund for the quarter ending on such date. For the

9 purpose of this subsection, the average daily balance shall

10 be computed—

11 ‘‘(A) in the case of any State unemployment

12 compensation benefit account, by reducing (but not

13 below zero) the amount in the account by the bal14 ance of advances made to the State under section

15 1201, and

16 ‘‘(B) in the case of the Federal unemployment

17 account—

18 ‘‘(i) by adding to the amount in the ac19 count the aggregate of the reductions under

20 paragraph (1), and

21 ‘‘(ii) by subtracting from the sum so ob22 tained the balance of advances made under sec23 tion 1201 to the account.

24 ‘‘(2) There is hereby established within the Unem25 ployment Trust Fund, an employment security transition
48

•S 462 IS

1 account for the purpose of receiving moneys collected

2 under chapter 23 of the Internal Revenue Code of 1986,

3 by the Internal Revenue Service, and transferring such

4 moneys to other accounts within the Unemployment Trust

5 Fund as prescribed by this title.’’.

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

7 subsection (a) shall take effect on October 1, 2000.

8 SEC. 214. PAYMENTS TO STATE AGENCIES AND RAILROAD

9 RETIREMENT BOARD.

10 (a) IN GENERAL.—Section 904(f) of the Social Secu11 rity Act (42 U.S.C. 1104(f)) is amended to read as fol12 lows:

13 ‘‘Payments to State Agencies and Railroad Retirement

14 Board

15 ‘‘(f) The Secretary of the Treasury is authorized and

16 directed to pay out of the Fund to any State agency such

17 amount as it may duly requisition. The Secretary of the

18 Treasury is authorized and directed to make such pay19 ments out of the railroad unemployment insurance ac20 count for the payment of benefits, and out of the railroad

21 unemployment insurance administration fund for the pay22 ment of administrative expenses, as the Railroad Retire23 ment Board may duly certify, not exceeding the amount

24 standing to the credit of such account or such fund, as

25 the case may be, at the time of such payment.’’.
49

•S 462 IS

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

2 subsection (a) shall take effect on October 1, 2000.

3 SEC. 215. ESTABLISHMENT OF EUCA ACCOUNT EXCESS AND

4 TRANSFERS.

5 (a) IN GENERAL.—Section 905 of the Social Security

6 Act (42 U.S.C. 1105) is amended by striking subsections

7 (b) and (c) and inserting the following:

8 ‘‘Determination of Excess and Transfers to Accounts

9 ‘‘(b)(1) The Secretary of the Treasury shall deter10 mine as of the close of the fiscal year ending September

11 30, 2004, and the close of each subsequent fiscal year,

12 the excess in the extended unemployment compensation

13 account.

14 ‘‘(2) The excess in the extended unemployment com15 pensation account as of the close of any fiscal year is the

16 amount (if any) by which the net balance in such account

17 as of such time exceeds the greater of—

18 ‘‘(A) $14,400,000,000; or

19 ‘‘(B) an amount equal to 0.25 percent of the

20 total wages subject (determined without limitation

21 on amount) to contributions under all State unem22 ployment compensation laws for the calendar year

23 ending during the fiscal year for which the excess is

24 determined.
50

•S 462 IS

1 ‘‘(3) The excess determined under paragraph (2)

2 shall be transferred by the Secretary of the Treasury at

3 the close of the fiscal year ending September 30, 2004,

4 and at the close of each subsequent fiscal year, to the em5 ployment security administration accounts of the States

6 in the Unemployment Trust Fund as of the beginning of

7 the following fiscal year. Each State’s share shall be deter8 mined using the formula set forth in section 903(a)(2)(B).

9 ‘‘Transfers to State Accounts

10 ‘‘(c) Amounts in the extended unemployment com11 pensation account shall be available for transfer to the un12 employment compensation benefit accounts of the States

13 in the Unemployment Trust Fund as provided in section

14 204(e) of the Federal-State Extended Unemployment

15 Compensation Act of 1970.’’.

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

17 subsection (a) shall take effect on October 1, 2000.

18 SEC. 216. REPEAL OF INTERFUND BORROWING AUTHORITY.

19 Section 910 of the Social Security Act (42 U.S.C.

20 1110) is repealed.
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1 TITLE III—GRANTS TO STATES

2 FOR EMPLOYMENT SECURITY

3 ADMINISTRATION

4 SEC. 301. REPEAL OF SECTIONS 301 AND 302 OF THE SOCIAL

5 SECURITY ACT.

6 (a) IN GENERAL.—Sections 301 and 302 of the So7 cial Security Act (42 U.S.C. 501; 502) are repealed.

8 (b) EFFECTIVE DATE.—This section shall take effect

9 on October 1, 2004.

10 SEC. 302. STATE REQUIREMENTS.

11 (a) CONFORMITY REQUIREMENTS.—Section 303(a)

12 of the Social Security Act (42 U.S.C. 503(a)) is amended

13 by striking ‘‘The Secretary’’ through ‘‘for—’’ and insert14 ing the following: ‘‘As of October 31 each year, at the time

15 of the certification prescribed under section 3304(c) of the

16 Internal Revenue Code of 1986, the Secretary of Labor

17 shall certify whether each State’s law includes provision

18 for—’’.

19 (b) LIMITATION ON USE OF BENEFIT ACCOUNT

20 FUNDS.—Section 303(a)(5) of the Social Security Act (42

21 U.S.C. 503(a)(5)) is amended to read as follows:

22 ‘‘(5) Expenditure of all money withdrawn from

23 the State’s Unemployment Compensation Benefit

24 Account within the unemployment fund of such

25 State, in the payment of unemployment compensa-
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1 tion, exclusive of expenses of administration, and for

2 refunds of sums erroneously paid into such fund and

3 refunds paid in accordance with the provisions of

4 section 3305(b) of the Internal Revenue Code of

5 1986: Provided, That an amount equal to the

6 amount of employee payments into the Unemploy7 ment Compensation Benefit Account within the un8 employment fund of a State may be used in the pay9 ment of cash benefits to individuals with respect to

10 their disability, exclusive of expenses of administra11 tion: Provided further, That the amounts specified

12 by section 903(c)(2) may, subject to the conditions

13 prescribed in such section, be used for expenses in14 curred by the State for administration of its unem15 ployment compensation law and public employment

16 services: Provided further, That nothing in this para17 graph shall be construed to prohibit deducting an

18 amount from unemployment benefits and used to

19 repay overpayments as provided in subsection (g) of

20 this section: Provided further, That amounts may be

21 withdrawn for the payment of short-time compensa22 tion under a plan approved by the Secretary of

23 Labor: Provided further, That amounts may be with24 drawn for the payment of allowances under a self25 employment assistance program (as defined in sec-
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1 tion 3306(t) of the Internal Revenue Code of 1986);

2 and’’.

3 (c) USE OF ADMINISTRATIVE FUNDS.—Section

4 303(a)(8) of the Social Security Act (42 U.S.C. 503(a)(8))

5 is amended to read as follows:

6 ‘‘(8) Expenditure of all moneys received pursu7 ant to title IX solely for the proper and efficient ad8 ministration of such State law and services specified

9 in such title and section 3304 of the Internal Reve10 nue Code of 1986; and’’.

11 (d) PROPER ADMINISTRATION REQUIREMENT.—Sec12 tion 303(a)(9) of the Social Security Act (42 U.S.C.

13 503(a)(9)) is amended to read as follows:

14 ‘‘(9) The replacement, within a reasonable time,

15 of any moneys received pursuant to title IX, which,

16 because of any action or contingency, have been lost

17 or have been expended for purposes other than those

18 necessary for the proper administration of such

19 State law and the provision of services under such

20 title and section 3304 of the Internal Revenue Code

21 of 1986; and’’.

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

23 this section shall take effect on October 1, 2004.
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1 SEC. 303. INTERPRETATION OF METHODS OF ADMINISTRA2 TION REQUIREMENT.

3 (a) IN GENERAL.—Section 303(a) of the Social Secu4 rity Act (42 U.S.C. 503(a)) (as amended by section 302

5 of this Act) is amended—

6 (1) by striking the period at the end of para7 graph (10) and inserting ‘‘; and’’; and

8 (2) by adding at the end the following:

9 ‘‘(11) States shall not be required to comply

10 with interpretations of the Secretary of Labor with

11 respect to methods of administration requirements

12 under paragraph (1) of this subsection, including

13 but not limited to requirements with respect to qual14 ity control, if such interpretations impose additional

15 administrative burdens on the States, unless Con16 gress enacts legislation which approves such inter17 pretation.’’

18 (b) EFFECTIVE DATE.—The amendments made by

19 subsection (a) shall take effect on October 1, 2000.

20 TITLE IV—EXTENDED UNEM21 PLOYMENT COMPENSATION

22 SEC. 401. EXTENDED UNEMPLOYMENT COMPENSATION.

23 (a) IN GENERAL.—Section 202(a) of the Federal24 State Extended Unemployment Compensation Act of 1970

25 (26 U.S.C. 3304 note) is amended—

26 (1) by striking paragraphs (3), (4), and (7);
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1 (2) by redesignating paragraphs (5) and (6) as

2 paragraphs (3) and (4), respectively; and

3 (3) in paragraph (4) (as redesignated by para4 graph (2)), by striking ‘‘paragraphs (3), (4), and

5 (5)’’ and inserting ‘‘paragraph (3)’’.

6 (b) CONFORMING AMENDMENTS.—Section 204 of the

7 Federal-State Extended Unemployment Compensation Act

8 of 1970 (26 U.S.C. 3304 note) is amended—

9 (1) in subsection (a)—

10 (A) in paragraph (1), in the matter preced11 ing subparagraph (A), by inserting ‘‘the unem12 ployment compensation benefit account of’’

13 after ‘‘be paid to’’;

14 (B) in paragraph (2), by inserting ‘‘unem15 ployment compensation account of a’’ after

16 ‘‘made to any’’; and

17 (C) in paragraph (3), by inserting ‘‘unem18 ployment compensation benefit account of a’’

19 after ‘‘subsection to any’’;

20 (2) in subsection (d), by inserting ‘‘the unem21 ployment compensation benefit account of’’ after ‘‘be

22 paid to’’;

23 (3) in subsection (e)—
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1 (A) by inserting ‘‘the unemployment com2 pensation benefit account of’’ after ‘‘Treasury

3 for payment to’’;

4 (B) by inserting ‘‘unemployment com5 pensation benefit’’ after ‘‘extended unemploy6 ment compensation account to the’’; and

7 (C) by adding at the end ‘‘Amounts main8 tained within the extended unemployment com9 pensation account shall be used only as set

10 forth in this Act and may not be transferred or

11 used to provide funds for benefits, goods, or

12 services other than those prescribed in this

13 Act.’’.

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

15 this section shall take effect on January 1, 2000.

16 TITLE V—FEDERAL EMPLOY17 MENT SECURITY SERVICE

18 SEC. 501. AMENDMENT TO STATEMENT OF PURPOSES.

19 (a) IN GENERAL.—Section 1 of the Wagner-Peyser

20 Act (29 U.S.C. 49) is amended to read as follows:

21 ‘‘SECTION 1. In order to assist in the coordination

22 of public employment security services, the United States

23 Employment Security Service shall be established and

24 maintained within the Department of Labor.’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall take effect on October 1, 2000.

3 SEC. 502. PURPOSE OF EMPLOYMENT SECURITY SERVICE.

4 (a) IN GENERAL.—Section 3(a) of the Wagner5 Peyser Act (29 U.S.C. 49b(a)) is amended to read as fol6 lows:

7 ‘‘(a) The Secretary shall assist in coordinating public

8 employment services throughout the country and assure

9 that the requirements of titles III and IX of the Social

10 Security Act and section 3304 of the Internal Revenue

11 Code of 1986 are met.’’.

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

13 subsection (a) shall take effect on October 1, 2000.

14 SEC. 503. TRANSFER OF REAL PROPERTY.

15 (a) IN GENERAL.—For the purpose of assisting in

16 the coordination of employment services in accordance

17 with the terms of the Wagner-Peyser Act (29 U.S.C. 49

18 et seq.), the Secretary of Labor is authorized without pay19 ment of compensation to transfer and assign to the States

20 in which it is located all property, including records, files,

21 and office equipment, used by the United States Employ22 ment Service in its administrative and local employment

23 offices in the respective States, except the records, files,

24 and property used in the Veterans Service and in the
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1 Farm Placement Service maintained pursuant to such

2 Act.

3 (b) REPEAL.—The Act entitled ‘‘To provide for the

4 transfer of United States Employment Service records,

5 files, and property in local offices to the States’’, approved

6 August 11, 1939 (29 U.S.C. 49c(1)) is repealed.

7 (c) EFFECTIVE DATE.—This section shall take effect

8 on October 1, 2000.

9 SEC. 504. REPEAL OF FEDERAL APPROPRIATIONS AUTHOR10 ITY.

11 (a) IN GENERAL.—Sections 5 and 6 of the Wagner12 Peyser Act (29 U.S.C. 49d; 49e) are repealed.

13 (b) EFFECTIVE DATE.—This section shall take effect

14 on October 1, 2004.

15 SEC. 505. USE OF PUBLIC EMPLOYMENT SERVICE FUNDS.

16 (a) IN GENERAL.—Section 7(a) of the Wagner17 Peyser Act (29 U.S.C. 49f) is amended to read as follows:

18 ‘‘(a) Funds provided to such State under title IX of

19 the Social Security Act for public employment services

20 shall be used—

21 ‘‘(1) for determining whether individuals claim22 ing unemployment compensation under State laws

23 conforming to section 3304 of the Internal Revenue

24 Code of 1986 are available to accept suitable work
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1 and have not refused suitable work as prescribed by

2 the State unemployment compensation law;

3 ‘‘(2) for job search and placement services to

4 individuals claiming unemployment compensation

5 benefits and other job seekers including counseling,

6 testing, occupational and labor market information,

7 assessment, and referral to employers; and

8 ‘‘(3) for appropriate recruitment services and

9 special technical services for employers, and may be

10 used for—

11 ‘‘(A) evaluation of programs;

12 ‘‘(B) developing linkages between services

13 funded under this Act and related Federal or

14 State legislation, including the provision of

15 labor exchange services at education sites;

16 ‘‘(C) providing services for workers who

17 have received notice of permanent layoff or im18 pending layoff, or workers in occupations which

19 are experiencing limited demand due to techno20 logical change, impact of imports, or plant clo21 sures;

22 ‘‘(D) developing and providing labor mar23 ket and occupational information; and
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1 ‘‘(E) developing a management informa2 tion system and compiling and analyzing re3 ports therefrom.’’.

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

5 subsection (a) shall take effect on October 1, 2004.

6 SEC. 506. REPEAL OF FEDERAL USE OF FUNDS REQUIRE7 MENTS.

8 (a) IN GENERAL.—Section 7 of the Wagner-Peyser

9 Act (29 U.S.C. 49f) (as amended by section 305 of the

10 Workforce Investment Act of 1998) is amended—

11 (1) by striking subsections (b), (c), and (d); and

12 (2) by redesignating subsection (e) as sub13 section (b).

14 (b) EFFECTIVE DATE.—This section shall take effect

15 on October 1, 2004.

16 SEC. 507. REPEAL OF FEDERAL PLANNING AND FISCAL RE17 QUIREMENTS.

18 (a) IN GENERAL.—Sections 8, 9, 12, 13, and 14 of

19 the Wagner-Peyser Act (29 U.S.C. 49g; 49h; 49k; 49l;

20 49l–1) (as amended by the Workforce Investment Act of

21 1998) are repealed.

22 (b) EFFECTIVE DATE.—This section shall take effect

23 on October 1, 2004.
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1 TITLE VI—ADVANCES TO STATE

2 UNEMPLOYMENT COMPENSA3 TION BENEFIT ACCOUNTS

4 SEC. 601. TRANSFERS FROM THE FEDERAL UNEMPLOY5 MENT ACCOUNT.

6 (a) IN GENERAL.—Section 1201(b) of the Social Se7 curity Act (42 U.S.C. 1321(b)) is amended to read as fol8 lows:

9 ‘‘(b) The Secretary of the Treasury shall, prior to

10 audit or settlement by the General Accounting Office,

11 transfer in monthly installments from the Federal unem12 ployment account to the unemployment compensation ben13 efit account of the State in the Unemployment Trust

14 Fund the amount certified under subsection (a) of this

15 section by the Secretary of Labor (but not exceeding that

16 portion of the balance in the Federal unemployment ac17 count at the time of the transfer which is not restricted

18 as to use pursuant to section 903). The amount of any

19 monthly installment so transferred shall not exceed the

20 amount estimated by the State to be required for the pay21 ment of compensation for the month with respect to which

22 such installment is made.’’.

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

24 subsection (a) shall take effect on October 1, 2000.
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1 SEC. 602. USE OF TRANSFERRED FUNDS.

2 (a) IN GENERAL.—Section 1202(a) of the Social Se3 curity Act (42 U.S.C. 1322(a)) is amended to read as fol4 lows:

5 ‘‘(a) The Governor of any State may at any time re6 quest that funds be transferred from the unemployment

7 compensation benefit account of such State in the Unem8 ployment Trust Fund to the Federal unemployment ac9 count in repayment of part or all of that balance of ad10 vances, made to such State under section 1201, specified

11 in the request, and the Secretary of the Treasury shall

12 promptly transfer such amount in reduction of such bal13 ance.’’.

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

15 subsection (a) shall take effect on October 1, 2000.

16 SEC. 603. DETERMINATION OF INTEREST RATE.

17 (a) IN GENERAL.—Section 1202(b) of the Social Se18 curity Act (42 U.S.C. 1322(b)) is amended by striking

19 paragraphs (4) and (5) and inserting the following:

20 ‘‘(4) The interest rate determined under this

21 paragraph with respect to any calendar year is a

22 percentage (but not in excess of 10 percent) deter23 mined by dividing—

24 ‘‘(A) the aggregate amount credited under

25 section 904 to State unemployment compensa26 tion benefit accounts on the last day of the last
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1 calendar quarter of the immediately preceding

2 calendar year, by

3 ‘‘(B) the aggregate of the average daily

4 balances of the State unemployment compensa5 tion benefit accounts for such quarter as deter6 mined under section 904(e).

7 ‘‘(5) Interest required to be paid under para8 graph (1) shall not be paid (directly or indirectly) by

9 a State from amounts in its unemployment com10 pensation benefit account. If the Secretary of Labor

11 determines that any State action results in the pay12 ing of such interest directly or indirectly (by an

13 equivalent reduction in State unemployment taxes or

14 otherwise) from such unemployment compensation

15 benefit account, the Secretary of Labor shall not

16 certify such State’s unemployment compensation law

17 under section 3304 of the Internal Revenue Code of

18 1986. Such noncertification shall be made in accord19 ance with section 3304(c) of such Code.’’.

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

21 subsection (a) shall take effect on October 1, 2000.

22 SEC. 604. REVOLVING LOAN FUND.

23 (a) IN GENERAL.—Section 1203 of the Social Secu24 rity Act (42 U.S.C. 1323) is amended to read as follows:
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1 ‘‘ADVANCES TO FEDERAL UNEMPLOYMENT ACCOUNT

2 ‘‘SEC. 1203. There are hereby authorized to be ap3 propriated to the Federal unemployment account, as re4 payable advances, such sums as may be necessary to carry

5 out the purposes of this title. Amounts appropriated as

6 repayable advances for purposes of this section shall bear

7 interest at a rate equal to the average rate of interest,

8 computed as of the end of the calendar month next preced9 ing the date of such advance, borne by all interest-bearing

10 obligations of the United States then forming part of the

11 public debt; except that in cases in which such average

rate is not a multiple of 1 12 ⁄8 of 1 percent, the rate of interest shall be the multiple of 1 13 ⁄8 of 1 percent next lower than

14 such average rate.’’.

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

16 subsection (a) shall take effect on October 1, 2000.

17 TITLE VII—CONFORMING

18 AMENDMENTS

19 SEC. 701. BALANCED BUDGET AMENDMENTS.

20 Sections 5402, 5403, 5404, and 5408 of the Bal21 anced Budget Act of 1997 are repealed effective Septem22 ber 30, 2004.
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1 SEC. 702. REPEAL OF FEDERAL UNEMPLOYMENT TAX

2 AMENDMENT.

3 Amendments enacted in section 1035 of the Taxpayer

4 Relief Act of 1997 are repealed.

Æ