While the added revenue raised trust fund balances, the main reason for the extensions was to offset costs of new spending for unrelated programs. Employers argue that the need for this surtax, which had been set to expire in January 1999, has vanished. President Clinton, on the other hand, proposed its extension through 2007 to anticipate the demands of the next recession. The bipartisan budget agreement included the FUTA surtax extension. The new law encourages higher state trust fund account balances.
States can receive interest-bearing loans from federal funds if their account reserves are depleted.
They will now be eligible for interest-free federal advances if they meet a funding goal set by DoL. Coverage. States must cover their government employees under UC, with certain exceptions. The 1997 budget law allows states a new exception for election workers. States already could exclude from UC coverage wages earned by inmates in penal institutions. The new law requires exclusion as well of outside earnings by inmates in work-release programs, to avoid creating UC entitlements for inmates upon discharge from prison.