I 

108TH CONGRESS 

2D SESSION H. R. 4684 

To extend the Temporary Extended Unemployment Compensation Act of 

2002, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 24, 2004 

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

Committee on Ways and Means 

A BILL 

To extend the Temporary Extended Unemployment 

Compensation Act of 2002, and for other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Neighbors in Need Act’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—TEMPORARY EXTENDED UNEMPLOYMENT 

COMPENSATION 

Sec. 101. Program extension for States experiencing high unemployment. 
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TITLE II—FEDERAL UNEMPLOYMENT BENEFIT SYSTEM 

REFORMS 

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

States meet or fail to meet funding goals. 

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

Fund restricted to States which meet funding goals. 

TITLE III—AMENDMENTS TO THE INTERNAL REVENUE CODE OF 

1986 

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

Sec. 302. State collection of Federal unemployment tax. 

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

1 TITLE I—TEMPORARY EX2 TENDED UNEMPLOYMENT 

3 COMPENSATION 

4 SEC. 101. PROGRAM EXTENSION FOR STATES EXPERI5 ENCING HIGH UNEMPLOYMENT. 

6 (a) IN GENERAL.—The Temporary Extended Unem7 ployment Compensation Act of 2002 (26 U.S.C. 3304 

8 note) is amended by inserting after section 208 the fol9 lowing: 

10 ‘‘§ 208a. Program extension for States experiencing 

11 high unemployment 

12 ‘‘(a) IN GENERAL.—Notwithstanding any other pro13 vision of this title, an agreement under section 202(a) 

14 shall be considered to provide that, in the case of a State 

15 described in subsection (b), the State agency of such State 

16 will make payments of temporary extended unemployment 

17 compensation— 

18 ‘‘(1) to individuals described in subsection 

19 (d)(1); and 
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1 ‘‘(2) for any week of unemployment which be2 gins in the individual’s period of eligibility (as de3 fined in subsection (e)). 

4 ‘‘(b) STATE ELIGIBILITY REQUIREMENTS.—A State 

5 described in this subsection is any State that, during the 

6 week in which occurs the date of the enactment of this 

7 Act— 

8 ‘‘(1) is in an extended benefit period (as de9 scribed in section 203 of the Federal-State Extended 

10 Unemployment Compensation Act of 1970); or 

11 ‘‘(2) would be in such a period (as so defined) 

12 if section 203(d) of such Act were applied— 

13 ‘‘(A) by disregarding subparagraph (A) of 

14 paragraph (1) thereof and any reference to such 

15 subparagraph; and 

16 ‘‘(B) by substituting ‘3’ for ‘5’ each place 

17 it appears. 

18 ‘‘(c) TERMS AND CONDITIONS.—Except as otherwise 

19 provided in this section, the preceding provisions of this 

20 title shall apply in the case of any individual qualifying 

21 for temporary extended unemployment compensation ben22 efits by virtue of this section. 

23 ‘‘(d) AMOUNT IN ACCOUNT.—In determining the 

24 amount to be established in an account under section 

25 203(a) for purposes of this section— 
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1 ‘‘(1) section 203(b)(1) shall be applied— 

2 ‘‘(A) in the case of an individual who first 

3 satisfies the exhaustion requirements of this 

4 title (as set forth in section 202(b)(1)–(3)) dur5 ing a week beginning after December 31, 2003, 

6 and before the first day of the week in which 

7 occurs the date of the enactment of this section, 

by substituting ‘331 8 ⁄3’ for ‘50’ in section 

9 203(b)(1)(A) and ‘8’ for ‘13’ in section 

10 203(b)(1)(B); and 

11 ‘‘(B) in the case of an individual who first 

12 satisfies such requirements during a week be13 ginning on or after the first day of the week in 

14 which occurs the date of the enactment of this 

15 section and before the close of the 12th week 

16 following the week in which occurs the date of 

17 the enactment of this section, by applying sub18 paragraphs (A) and (B) of section 203(b)(1) in 

19 accordance with their terms; and 

20 ‘‘(2) section 203(c) shall be disregarded. 

21 ‘‘(e) PERIOD OF ELIGIBILITY.—An individual’s pe22 riod of eligibility consists of any week which begins on or 

23 after the first day of the week in which occurs the date 

24 of the enactment of this section and which (except as pro25 vided in subsection (f)) begins before the close of the 12th 
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1 week following the week in which occurs the date of the 

2 enactment of this section. 

3 ‘‘(f) TRANSITION.—In the case of an individual who 

4 is receiving benefits under this section for any week begin5 ning before the close of the 12th week following the week 

6 in which occurs the date of the enactment of this section, 

7 temporary extended unemployment compensation shall 

8 continue to be payable to such individual for any week 

9 thereafter for which the individual meets the eligibility re10 quirements of this title. No compensation shall be payable 

11 by virtue of the preceding sentence for any week beginning 

12 after the 25th week following the week in which occurs 

13 the date of the enactment of this section.’’. 

14 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

15 (1) Section 208(a) of the Temporary Extended Unemploy16 ment Compensation Act of 2002 is amended in the matter 

17 before paragraph (1) by striking ‘‘subsection (b),’’ and in18 serting ‘‘subsection (b) or section 208a,’’. 

19 (2) The table of contents of Public Law 107–147 is 

20 amended by inserting after the item relating to section 

21 208 the following: 

‘‘208a. Program extension for States experiencing high unemployment.’’. 
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1 TITLE II—FEDERAL UNEMPLOY2 MENT BENEFIT SYSTEM RE3 FORMS 

4 SEC. 201. INCREASE AND DECREASE IN EARNINGS CRED5 ITED TO STATE ACCOUNTS WHEN STATES 

6 MEET OR FAIL TO MEET FUNDING GOALS. 

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

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

9 the following new subsection: 

10 ‘‘Increase and Decrease in Amount of Earnings Allocated 

11 to State Accounts When States Meet or Fail to Meet 

12 Funding Goals 

13 ‘‘(h)(1) If the average daily balance in a State ac14 count in the Unemployment Trust Fund for any calendar 

15 quarter exceeds the funding goal of such State, the 

16 amount otherwise creditable to such account under sub17 section (e) for such quarter shall be increased by the inter18 est premium on such excess. If the average daily balance 

19 in such a State account for any calendar quarter is less 

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

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

22 quarter shall be decreased by the interest penalty. 

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

24 any interest premium or interest penalty to the extent that 

25 such application would result in an increase or decrease 
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1 of more than $2,500,000 in the amount creditable to any 

2 State account for any calendar quarter. 

3 ‘‘(3) For purposes of this subsection, the term ‘inter4 est premium’ means, for any calendar quarter— 

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

6 percentage value of excess of the average daily bal7 ance in the State account in the Unemployment 

8 Trust Fund over the funding goal of such State, 

9 one-half of one percent of the amount of such ex10 cess, and 

11 ‘‘(B) with respect to each other State, the prod12 uct of— 

13 ‘‘(i) the amount of the excess of the aver14 age daily balance in the State account in the 

15 Unemployment Trust Fund over the funding 

16 goal of such State, and 

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

18 ratio to one-half of one percent as— 

19 ‘‘(I) the percentage value of such ex20 cess, bears to 

21 ‘‘(II) the percentage value of the ex22 cess of the State referred to in subpara23 graph (A). 

24 The Secretary shall make appropriate adjustments in the 

25 interest premium for any calendar quarter if the aggregate 
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1 interest premiums payable for such quarter exceed the ag2 gregate interest penalties for such quarter. 

3 ‘‘(4) For purposes of this subsection, the term ‘inter4 est penalty’ means, for any calendar quarter— 

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

6 percentage value of excess of the funding goal of 

7 such State over the average daily balance in the 

8 State account in the Unemployment Trust Fund, 

9 one-half of one percent of the amount otherwise 

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

11 ‘‘(B) with respect to each other State, the prod12 uct of— 

13 ‘‘(i) the amount otherwise creditable to 

14 such account under subsection (e), and 

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

16 ratio to one-half of one percent as— 

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

18 of the funding goal of the State over such 

19 average daily balance of such State, bears 

20 to 

21 ‘‘(II) the percentage value of such ex22 cess of the State referred to in subpara23 graph (A). 

24 ‘‘(5) For purposes of this subsection, the term ‘fund25 ing goal’ means, for any State for any calendar quarter, 
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1 the average of the unemployment insurance benefits paid 

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

3 period ending with the calendar year containing such cal4 endar quarter, during which the State paid the greatest 

5 amount of unemployment benefits. 

6 ‘‘(6) For purposes of this subsection, the term ‘per7 centage value’ means— 

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

9 daily balance in a State account in the Unemploy10 ment Trust Fund over the funding goal of such 

11 State, the percentage which such excess bears to 

12 such funding goal, and 

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

14 goal over such average daily balance, the percentage 

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

16 (b) CONFORMING AMENDMENTS.— 

17 (1) AMOUNTS CREDITED TO STATE AC18 COUNTS.—Subsection (e) of section 904 of the So19 cial Security Act (42 U.S.C. 1104(e)) is amended in 

20 the first sentence by inserting ‘‘(as modified by sub21 section (h))’’ after ‘‘a proportionate part’’. 

22 (2) INTEREST RATE ON REPAYMENT OF AD23 VANCES DETERMINED WITHOUT REGARD TO INTER24 EST PREMIUMS OR PENALTIES ON AMOUNTS CRED25 ITED TO STATE ACCOUNTS.—Subparagraph (A) of 
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1 section 1202(b)(4) of such Act (42 U.S.C. 

2 1322(b)(4)) is amended by inserting ‘‘(determined 

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

4 calendar year’’. 

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

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

7 submit to the Congress a report recommending sources of 

8 funding for the crediting of interest premiums under sub9 section (h) of section 904 of the Social Security Act (42 

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

11 the imposition of interest penalties under such subsection 

12 is insufficient to fund such premiums. 

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

14 this section shall apply to calendar years beginning after 

15 December 31, 2007. 

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

17 IN UNEMPLOYMENT TRUST FUND RE18 STRICTED TO STATES WHICH MEET FUNDING 

19 GOALS. 

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

21 1202(b)(2) of the Social Security Act (42 U.S.C. 

22 1322(b)(2)) is amended to read as follows: 

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

24 such State in the Unemployment Trust Fund for 

25 each of 4 of the 5 calendar quarters preceding the 
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1 calendar quarter in which such advances were made 

2 exceeds the funding goal of such State (as defined 

3 in section 904(h)).’’ 

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

5 subsection (a) shall apply to calendar years beginning 

6 after the date of the enactment of this Act. 

7 TITLE III—AMENDMENTS TO 

8 THE INTERNAL REVENUE 

9 CODE OF 1986 

10 SECTION 301. 2-YEAR SUSPENSION OF TAX ON UNEMPLOY11 MENT COMPENSATION. 

12 (a) IN GENERAL.—Section 85 of the Internal Rev13 enue Code of 1986 (relating to unemployment compensa14 tion) is amended by adding at the end the following new 

15 subsection: 

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

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

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

19 this section shall apply to taxable years beginning after 

20 December 31, 2003. 

21 SEC. 302. STATE COLLECTION OF FEDERAL UNEMPLOY22 MENT TAX. 

23 (a) IN GENERAL.—Chapter 23 of the Internal Rev24 enue Code of 1986 (relating to Federal Unemployment 

25 Tax Act) is amended by redesignating section 3311 as sec-
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1 tion 3312 and by inserting after section 3310 the following 

2 new section: 

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

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

5 which is certified as provided in section 3304, each em6 ployer who pays contributions, with respect to any wages, 

7 into an unemployment fund maintained under the unem8 ployment compensation law of such State shall submit the 

9 tax imposed by this chapter with respect to such wages 

10 to such State rather than to the Secretary. 

11 ‘‘(b) COORDINATION WITH DEPOSITARY REQUIRE12 MENTS.—Payment under subsection (a) of the tax im13 posed by this chapter with respect to any wages shall be 

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

15 by the employer to the State at the same time as a timely 

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

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

19 ‘‘(c) EXCEPTION FOR PAYMENTS NOT TIMELY

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

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

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

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

24 ‘‘(d) FEDERAL TAX TRANSFERRED TO SEC25 RETARY.—Each State making an election under sub-
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1 section (a) shall transmit to the Secretary, at the time 

2 and in the manner prescribed by the Secretary, the 

3 amount of the tax imposed by this chapter which is sub4 mitted to such State under subsection (a) and a copy of 

5 the State tax return of each employer making such a sub6 mission. The Secretary may, after consultation with such 

7 organizations or other entities as the Secretary considers 

8 appropriate, prescribe regulations requiring that addi9 tional information be submitted by such State with respect 

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

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

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

13 item relating to section 3311 and inserting the following 

14 new items: 

‘‘Sec. 3311. State collection of tax. 

‘‘Sec. 3312. Short title.’’ 

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

16 this section shall apply to calendar years beginning after 

17 December 31, 2004. 

18 SEC. 303. REQUIRED DISTRIBUTION OF STATE-SPECIFIC IN19 FORMATION PACKETS. 

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

21 the Internal Revenue Code of 1986 (relating to approval 

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

23 of paragraph (18), by striking the period at the end of 
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1 paragraph (19) and inserting ‘‘; and’’, and by adding at 

2 the end the following new paragraph: 

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

4 individuals State-specific information packets ex5 plaining unemployment insurance eligibility condi6 tions.’’ 

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

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

9 2005, except that section 3304(a)(20) of such Code, as 

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

11 the State law of any State prior to July 1, 2006, if the 

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

13 which closes during the calendar year 2005. 

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