I 

111TH CONGRESS 

1ST SESSION H. R. 290 

To provide for special transfers of funds to States to promote certain 

improvements in State unemployment compensation laws. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 8, 2009 

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

Committee on Ways and Means 

A BILL 

To provide for special transfers of funds to States to promote 

certain improvements in State unemployment compensation laws. 

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

3 SECTION 1. SHORT TITLE. 

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

6 SEC. 2. SPECIAL TRANSFERS FOR UNEMPLOYMENT COM7 PENSATION MODERNIZATION. 

8 (a) IN GENERAL.—Section 903 of the Social Security 

9 Act (42 U.S.C. 1103) is amended by adding at the end 

10 the following: 


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1 ‘‘Special Transfers in Fiscal Years 2009, 2010, and 2011 

2 for Modernization 

3 ‘‘(f)(1)(A) In addition to any other amounts, the Sec4 retary of Labor shall provide for the making of unemploy5 ment compensation modernization incentive payments 

6 (hereinafter ‘incentive payments’) to the accounts of the 

7 States in the Unemployment Trust Fund, by transfer from 

8 amounts reserved for that purpose in the Federal unem9 ployment account, in accordance with succeeding provi10 sions of this subsection. 

11 ‘‘(B) The maximum incentive payment allowable 

12 under this subsection with respect to any State shall, as 

13 determined by the Secretary of Labor, be equal to the 

14 amount obtained by multiplying $7,000,000,000 by the 

15 same ratio as would apply under subsection (a)(2)(B) for 

16 purposes of determining such State’s share of any excess 

17 amount (as described in subsection (a)(1)) that would 

18 have been subject to transfer to State accounts, as of Oc19 tober 1, 2008, under the provisions of subsection (a). 

20 ‘‘(C) Of the maximum incentive payment determined 

21 under subparagraph (B) with respect to a State— 

22 ‘‘(i) one-third shall be transferred to the ac23 count of such State upon a certification under para24 graph (4)(B) that the State law of such State meets 

25 the requirements of paragraph (2); and 


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1 ‘‘(ii) the remainder shall be transferred to the 

2 account of such State upon a certification under 

3 paragraph (4)(B) that the State law of such State 

4 meets the requirements of paragraph (3). 

5 ‘‘(2) The State law of a State meets the requirements 

6 of this paragraph if such State law— 

7 ‘‘(A) uses a base period that includes the most 

8 recently completed calendar quarter before the start 

9 of the benefit year for purposes of determining eligi10 bility for unemployment compensation; or 

11 ‘‘(B) provides that, in the case of an individual 

12 who would not otherwise be eligible for unemploy13 ment compensation under the State law because of 

14 the use of a base period that does not include the 

15 most recently completed calendar quarter before the 

16 start of the benefit year, eligibility shall be deter17 mined using a base period that includes such cal18 endar quarter. 

19 ‘‘(3) The State law of a State meets the requirements 

20 of this paragraph if such State law includes provisions to 

21 carry out at least 2 of the following subparagraphs: 

22 ‘‘(A) An individual shall not be denied regular 

23 unemployment compensation under any State law 

24 provisions relating to availability for work, active 

25 search for work, or refusal to accept work, solely beVerDate Nov 24 2008 03:17 Jan 10, 2009 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H290.IH H290

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1 cause such individual is seeking only part-time (and 

2 not full-time) work, except that the State law provi3 sions carrying out this subparagraph may exclude an 

4 individual if a majority of the weeks of work in such 

5 individual’s base period do not include part-time 

6 work. 

7 ‘‘(B) An individual shall not be disqualified 

8 from regular unemployment compensation for sepa9 rating from employment if that separation is for any 

10 compelling family reason. For purposes of this sub11 paragraph, the term ‘compelling family reason’ 

12 means the following: 

13 ‘‘(i) Domestic violence, verified by such 

14 reasonable and confidential documentation as 

15 the State law may require, which causes the in16 dividual reasonably to believe that such individ17 ual’s continued employment would jeopardize 

18 the safety of the individual or of any member 

19 of the individual’s immediate family (as defined 

20 by the Secretary of Labor). 

21 ‘‘(ii) The illness or disability of a member 

22 of the individual’s immediate family (as defined 

23 by the Secretary of Labor). 

24 ‘‘(iii) The need for the individual to accom25 pany such individual’s spouse— 


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1 ‘‘(I) to a place from which it is im2 practical for such individual to commute; 

3 and 

4 ‘‘(II) due to a change in location of 

5 the spouse’s employment. 

6 ‘‘(C) Weekly unemployment compensation is 

7 payable under this subparagraph to any individual 

8 who is unemployed (as determined under the State 

9 unemployment compensation law), has exhausted all 

10 rights to regular unemployment compensation under 

11 the State law, and is enrolled and making satisfac12 tory progress in a State-approved training program 

13 or in a job training program authorized under the 

14 Workforce Investment Act of 1998. Such programs 

15 shall prepare individuals who have been separated 

16 from a declining occupation, or who have been invol17 untarily and indefinitely separated from employment 

18 as a result of a permanent reduction of operations 

19 at the individual’s place of employment, for entry 

20 into a high-demand occupation. The amount of un21 employment compensation payable under this sub22 paragraph to an individual for a week of unemploy23 ment shall be equal to the individual’s average week24 ly benefit amount (including dependents’ allowances) 

25 for the most recent benefit year, and the total 


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1 amount of unemployment compensation payable 

2 under this subparagraph to any individual shall be 

3 equal to at least 26 times the individual’s average 

4 weekly benefit amount (including dependents’ allow5 ances) for the most recent benefit year. 

6 ‘‘(D) Dependents’ allowances are provided, in 

7 the case of any individual who is entitled to receive 

8 regular unemployment compensation and who has 

9 any dependents (as defined by State law), in an 

10 amount equal to at least $15 per dependent per 

11 week, subject to any aggregate limitation on such al12 lowances which the State law may establish (but 

13 which aggregate limitation on the total allowance for 

14 dependents paid to an individual may not be less 

15 than $50 for each week of unemployment or 50 per16 cent of the individual’s weekly benefit amount for 

17 the benefit year, whichever is less). 

18 ‘‘(4)(A) Any State seeking an incentive payment 

19 under this subsection shall submit an application therefor 

20 at such time, in such manner, and complete with such in21 formation as the Secretary of Labor may within 60 days 

22 after the date of the enactment of this subsection prescribe 

23 (whether by regulation or otherwise), including informa24 tion relating to compliance with the requirements of para25 graph (2) or (3), as well as how the State intends to use 


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1 the incentive payment to improve or strengthen the State’s 

2 unemployment compensation program. The Secretary of 

3 Labor shall, within 30 days after receiving a complete ap4 plication, notify the State agency of the State of the Sec5 retary’s findings with respect to the requirements of para6 graph (2) or (3) (or both). 

7 ‘‘(B)(i) If the Secretary of Labor finds that the State 

8 law provisions (disregarding any State law provisions 

9 which are not then currently in effect as permanent law 

10 or which are subject to discontinuation) meet the require11 ments of paragraph (2) or (3), as the case may be, the 

12 Secretary of Labor shall thereupon make a certification 

13 to that effect to the Secretary of the Treasury, together 

14 with a certification as to the amount of the incentive pay15 ment to be transferred to the State account pursuant to 

16 that finding. The Secretary of the Treasury shall make 

17 the appropriate transfer within 7 days after receiving such 

18 certification. 

19 ‘‘(ii) For purposes of clause (i), State law provisions 

20 which are to take effect within 12 months after the date 

21 of their certification under this subparagraph shall be con22 sidered to be in effect as of the date of such certification. 

23 ‘‘(C)(i) No certification of compliance with the re24 quirements of paragraph (2) or (3) may be made with re25 spect to any State whose State law is not otherwise eligible 


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1 for certification under section 303 or approvable under 

2 section 3304 of the Federal Unemployment Tax Act. 

3 ‘‘(ii) No certification of compliance with the require4 ments of paragraph (3) may be made with respect to any 

5 State whose State law is not in compliance with the re6 quirements of paragraph (2). 

7 ‘‘(iii) No application under subparagraph (A) may be 

8 considered if submitted before the date of the enactment 

9 of this subsection or after the latest date necessary (as 

10 specified by the Secretary of Labor) to ensure that all in11 centive payments under this subsection are made before 

12 October 1, 2011. 

13 ‘‘(5)(A) Except as provided in subparagraph (B), any 

14 amount transferred to the account of a State under this 

15 subsection may be used by such State only in the payment 

16 of cash benefits to individuals with respect to their unem17 ployment (including for dependents’ allowances and for 

18 unemployment compensation under paragraph (3)(C)), ex19 clusive of expenses of administration. 

20 ‘‘(B) A State may, subject to the same conditions as 

21 set forth in subsection (c)(2) (excluding subparagraph (B) 

22 thereof, and deeming the reference to ‘subsections (a) and 

23 (b)’ in subparagraph (D) thereof to include this sub24 section), use any amount transferred to the account of 

25 such State under this subsection for the administration 


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1 of its unemployment compensation law and public employ2 ment offices. 

3 ‘‘(6) Out of any money in the Federal unemployment 

4 account not otherwise appropriated, the Secretary of the 

5 Treasury shall reserve $7,000,000,000 for incentive pay6 ments under this subsection. Any amount so reserved shall 

7 not be taken into account for purposes of any determina8 tion under section 902, 910, or 1203 of the amount in 

9 the Federal unemployment account as of any given time. 

10 Any amount so reserved for which the Secretary of the 

11 Treasury has not received a certification under paragraph 

12 (4)(B) by the deadline described in paragraph (4)(C)(iii) 

13 shall, upon the close of fiscal year 2011, become unre14 stricted as to use as part of the Federal unemployment 

15 account. 

16 ‘‘(7) For purposes of this subsection, the terms ‘ben17 efit year’, ‘base period’, and ‘week’ have the respective 

18 meanings given such terms under section 205 of the Fed19 eral-State Extended Unemployment Compensation Act of 

20 1970 (26 U.S.C. 3304 note). 

21 ‘‘Special Transfer in Fiscal Year 2009 for Administration 

22 ‘‘(g)(1) In addition to any other amounts, the Sec23 retary of the Treasury shall transfer from the employment 

24 security administration account to the account of each 

25 State in the Unemployment Trust Fund, within 30 days 


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1 after the date of the enactment of this subsection, the 

2 amount determined with respect to such State under para3 graph (2). 

4 ‘‘(2) The amount to be transferred under this sub5 section to a State account shall (as determined by the Sec6 retary of Labor and certified by such Secretary to the Sec7 retary of the Treasury) be equal to the amount obtained 

8 by multiplying $500,000,000 by the same ratio as deter9 mined under subsection (f)(1)(B) with respect to such 

10 State. 

11 ‘‘(3) Any amount transferred to the account of a 

12 State as a result of the enactment of this subsection may 

13 be used by the State agency of such State only in the pay14 ment of expenses incurred by it for— 

15 ‘‘(A) the administration of the provisions of its 

16 State law carrying out the purposes of subsection 

17 (f)(2) or any subparagraph of subsection (f)(3); 

18 ‘‘(B) improved outreach to individuals who 

19 might be eligible for regular unemployment com20 pensation by virtue of any provisions of the State 

21 law which are described in subparagraph (A); 

22 ‘‘(C) the improvement of unemployment benefit 

23 and unemployment tax operations, including re24 sponding to increased demand for unemployment 

25 compensation; and 


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1 ‘‘(D) staff-assisted reemployment services for 

2 unemployment compensation claimants.’’. 

3 (b) REGULATIONS.—The Secretary of Labor may 

4 prescribe any regulations, operating instructions, or other 

5 guidance necessary to carry out the amendment made by 

6 subsection (a). 

Æ 


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