I 
108TH CONGRESS 
1ST SESSION H. R. 1802
To amend the Federal Unemployment Tax Act and the Social Security Act 
to modernize the unemployment insurance system, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 11, 2003
Mr. MCDERMOTT (for himself, Mr. SANDERS, Ms. NORTON, Mr. NADLER, Ms. 
CARSON of Indiana, Mr. EVANS, Mr. OWENS, Ms. SOLIS, Mr. STARK, Mr. 
KUCINICH, Mr. LANTOS, Ms. LEE, and Mr. FRANK of Massachusetts) in-
troduced the following bill; which was referred to the Committee on Ways 
and Means 
A BILL 
To amend the Federal Unemployment Tax Act and the So-
cial Security Act to modernize the unemployment insur-
ance system, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Keep America Working Act of 2003’’. 
(b) TABLE OF CONTENTS.—
Sec. 1. Short title; etc. 
TITLE I—RESTORING INSURANCE ELIGIBILITY IN AN EVOLVING 
ECONOMY
nating paragraph (19) as paragraph (29), and by insert-
ing after paragraph (18) the following new paragraphs: 
‘‘(19) compensation shall not be denied to an 
individual solely because such individual is seeking 
only part-time work, if—
‘‘(A) such individual otherwise qualifies for 
unemployment compensation, based wholly or 
mostly on part-time work; and 
‘‘(B) the part-time work sought by such in-
dividual generally requires at least 20 hours per 
week; 
‘‘(20) compensation is payable to an eligible in-
dividual in an amount which is not less than the 
amount determined by applying a base period ending 
at the close of the calendar quarter most recently 
completed before the date of the individual’s applica-
tion for benefits; 
‘‘(21) except as provided in paragraphs (6) and 
(13), compensation shall not be denied in such State 
to any otherwise eligible individual solely on the 
basis that such individual is a seasonal worker; 
‘‘(22)(A) if any individual leaves employment 
because of sexual harassment, for purposes of deter-
mining such individual’s eligibility for compensation 
for any subsequent week for which such individual
‘‘(C) licensing, bonding, or regulating the 
employee leasing industry, and 
‘‘(D) the strategic targeting of audits; 
‘‘(27) compensation shall not be denied in such 
State to any otherwise eligible individual solely on 
the basis that such individual was employed at the 
applicable minimum wage for not less than 20 hours 
a week for 30 weeks in the base period; 
‘‘(28) compensation is payable to any individual 
who is a parent of a child by blood or adoption and 
who takes an unpaid leave of absence from the em-
ployer at any time during the first year after—
‘‘(A) in the case of a child by blood, the 
birth of such child, and 
‘‘(B) in the case of a child by adoption by 
such individual, the adoption of such child; 
and’’. 
(b) UNEMPLOYMENT COMPENSATION NOT REDUCED 
BY EXEMPT TRUST ROLLOVERS.—Paragraph (15) of sec-
tion 3304(a) of such Code is amended by inserting ‘‘(other 
than a rollover described in section 402(c), 403(a)(4), 
403(b)(8), 408(d)(3), or 457(e)(16))’’ after ‘‘periodic pay-
ment’’ the first place it appears.
SEC. 102. EXPANSION OF UNEMPLOYMENT TAX WAGE BASE. 
(a) IN GENERAL.—Paragraph (1) of section 3306(b) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘$7,000’’ and inserting ‘‘the contribution and benefit 
base (as determined under section 230 of the Social Secu-
rity Act)’’. 
(b) DECREASE IN FUTA TAX RATE.—Section 3301 
of such Code is amended by striking ‘‘equal to—’’ and 
all that follows through ‘‘thereafter;’’ and inserting ‘‘equal 
to 5.59 percent’’. 
SEC. 103. DETERMINATIONS OF WHETHER INDIVIDUALS 
ARE EMPLOYEES FOR PURPOSES OF EM-
PLOYMENT TAXES. 
(a) REPEAL OF PRIOR AUDIT SAFE HARBOR WITH 
RESPECT TO DETERMINATIONS OF EMPLOYMENT STA-
TUS.—
(1) IN
GENERAL.—Paragraph (2) of section 
530(a) of the Revenue Act of 1978 is amended by 
striking subparagraph (B) and redesignating sub-
paragraph (C) as subparagraph (B). 
(2) 
CONFORMING
AMENDMENTS.—Section 
530(e) of such Act is amended—
(A) in paragraph (2) by striking subpara-
graph (A) and redesignating subparagraphs (B) 
and (C) as subparagraphs (A) and (B), respec-
tively,
(B) in paragraph (4)(B) by striking ‘‘sub-
paragraph (A), (B), or (C)’’ and inserting ‘‘sub-
paragraph (A) or (B)’’. 
(b) REPEAL
OF PROHIBITION AGAINST REGULA-
TIONS AND RULINGS ON EMPLOYMENT STATUS.—Section 
530 of the Revenue Act of 1978 is amended by striking 
subsection (b). 
SEC. 104. REPEAL OF DETERMINATION OF EMPLOYER’S LI-
ABILITY FOR CERTAIN EMPLOYMENT TAXES. 
(a) IN GENERAL.—Section 3509 of the Internal Rev-
enue Code of 1986 is repealed. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 25 of such Code is amended by striking the 
item relating to section 3509. 
SEC. 105. EFFECTIVE DATES. 
(a) IN GENERAL.—Except as provided by subsection 
(b), the amendments made by this title—
(1) shall take effect on January 1, 2004, and 
(2) in the case of sections 103 and 104, shall 
apply to periods beginning after December 31, 2003. 
(b) EXCEPTION.—In the case of any State the legisla-
ture of which has not been in session for at least 30 cal-
endar days (whether or not successive) between the date 
of the enactment of this Act and December 31, 2003, the 
amendments made by section 101 shall take effect 30 cal-
endar days after the first day on which such legislature 
is in session on or after January 1, 2004. 
TITLE 
II—ENCOURAGING 
JOB 
MOBILITY 
AND 
ADEQUATE 
COMPENSATION 
SEC. 201. SEPARATION FROM WORK DUE TO A MOVE RE-
LATING TO SPOUSE’S OR DOMESTIC PART-
NER’S NEW PRINCIPAL PLACE OF WORK NOT 
A BAR TO RECEIVING UNEMPLOYMENT COM-
PENSATION; 
REPLACEMENT 
RATIOS 
FOR 
LOWER PAID WORKERS WHO BECOME UNEM-
PLOYED. 
(a) REVENUES FROM INDIVIDUAL INCOME TAXES 
ATTRIBUTABLE TO UNEMPLOYMENT COMPENSATION TO 
BE CREDITED TO UNEMPLOYMENT ACCOUNTS OF QUALI-
FYING STATES.—
(1) IN
GENERAL.—There is hereby appro-
priated to accounts of certified States in the Unem-
ployment Trust Fund (as described in section 903 of 
the Social Security Act (42 U.S.C. 1103)) amounts 
equivalent to the amount of tax liabilities under 
chapter 1 of the Internal Revenue Code of 1986 
which is attributable to the application of section 85 
of such Code to payments from such accounts.
(2) TRANSFERS.—The amounts appropriated 
by paragraph (1) to any such account shall be trans-
ferred from time to time (but not less frequently 
than quarterly) from the general fund of the Treas-
ury on the basis of estimates made by the Secretary 
of the Treasury, in consultation with the Secretary 
of Labor, of the amounts referred to in such para-
graph. Any such quarterly payment shall be made on 
the first day of such quarter and shall take into ac-
count unemployment compensation estimated to be 
received from such account during such quarter. 
Proper adjustments shall be made in the amounts 
subsequently transferred to the extent prior esti-
mates were in excess of or less than the amounts re-
quired to be transferred. 
(3) CERTIFIED STATES.—For purposes of this 
subsection, the term ‘certified State’ means a State 
for which a certification under subsection (d) is in 
effect. 
(4) REPORTS.—The Secretary of the Treasury 
shall submit annual reports to the Congress on—
(A) the transfers made under this sub-
section during the year, and the methodology 
used in determining the amount of such trans-
fers and the account to which made, and
(B) the anticipated operation of this sub-
section during the next 5 years.
(b) CONDITIONS FOR APPROVAL OF STATE LAWS.—
The Secretary of Labor shall (for purposes of this section) 
approve any State law submitted to the Secretary under 
this section, within 30 days of such submission, which the 
Secretary finds provides that—
(1) compensation shall not be denied to any in-
dividual by reason of such individual’s separating 
from employment, if—
(A) that separation is related to a change 
in such individual’s spouse’s place of residence 
in connection with the commencement of work 
by the spouse (as an employee or as a self-em-
ployed individual) at a new principal place of 
work; 
(B) the spouse’s new principal place of 
work satisfies the condition under subsection 
(c)(1) of section 217 of the Internal Revenue 
Code of 1986 (relating to the minimum dis-
tance required, between a taxpayer’s former 
residence and new principal place of work, in 
order to qualify for a moving expenses deduc-
tion under such section); and
(C) the separating individual has both the 
former residence and the new residence as his 
principal place of abode; and 
(2) in the case of any individual who becomes 
entitled to receive compensation from such State, 
and whose average weekly wages (for the period on 
the basis of which such individual qualifies for such 
compensation, determined without any limitation on 
amount) do not exceed 50 percent of the average 
weekly wages subject (determined without any limi-
tation on amount) to contributions under the unem-
ployment compensation law of such State (as deter-
mined by the Secretary based on the data the Sec-
retary considers most appropriate), compensation 
shall be computed in a manner that results in a 
wage replacement ratio for such individual that is at 
least equal to the sum of—
(A) 50 percent, plus 
(B) 1⁄4 of 1 percent times the percentage 
by which such individual’s average weekly 
wages (for the aforementioned period) are less 
than the average weekly wages subject to con-
tributions under the unemployment compensa-
tion law of such State (as so determined).
The condition under paragraph (2) shall not be considered 
met if, in order to satisfy such paragraph, the State modi-
fies its State law in a way that, as determined by the Sec-
retary, has the general effect of reducing the replacement 
ratio for individuals whose average weekly wages equal or 
exceed the 50-percent threshold described in such para-
graph, except for good cause shown. 
(c) NOTIFICATION.—The Secretary of Labor shall, 
upon approving such law for purposes of this section, no-
tify the governor (or, if none, the chief executive officer) 
of the State of the Secretary’s approval. 
(d) CERTIFICATION.—On October 31 of each year, 
the Secretary of Labor shall certify to the Secretary of 
the Treasury each State whose law the Secretary of Labor 
has previously approved for purposes of this section, ex-
cept that the Secretary of Labor shall not certify any 
State which, after reasonable notice and opportunity for 
hearing to the State agency, the Secretary of Labor finds 
has amended its law so that it no longer contains the pro-
visions specified in subsection (b) or has with respect to 
the 12-month period ending on such October 31 failed to 
comply substantially with either provision of such sub-
section. 
(e) NOTICE OF NONCERTIFICATION.—If at any time 
the Secretary of Labor has reason to believe that a State
whose law the Secretary has previously approved for pur-
poses of this section may not be certified under subsection 
(d), the Secretary shall promptly so notify the governor 
(or, if none, the chief executive officer) of such State. 
(f) DEFINITIONS.—For purposes of this section—
(1) the terms ‘‘State’’, ‘‘State law’’, ‘‘State 
agency’’, ‘‘compensation’’, and ‘‘week’’ have the re-
spective meanings given such terms under section 
205 of the Federal-State Extended Unemployment 
Compensation Act of 1970; 
(2) the terms ‘‘wages’’ and ‘‘contributions’’ 
have the respective meanings given such terms under 
section 3306 of the Internal Revenue Code of 1986; 
(3) the term ‘‘wage replacement ratio’’ shall 
have such meaning as the Secretary of Labor shall 
by regulation prescribe consistent with the purposes 
of this section; and 
(4) the term ‘‘spouse’’ shall include a domestic 
partner, as defined under regulations of the Sec-
retary of Labor.
TITLE III—ENSURING SOLVENCY 
AND PREPARING FOR RECES-
SION 
SEC. 301. INCREASE AND DECREASE IN EARNINGS CRED-
ITED TO STATE ACCOUNTS WHEN STATES 
MEET OR FAIL TO MEET FUNDING GOALS. 
(a) IN GENERAL.—Section 904 of the Social Security 
Act (42 U.S.C. 1104) is amended by adding at the end 
the following new subsection: 
‘‘Increase and Decrease in Amount of Earnings Allocated 
to State Accounts When States Meet or Fail to Meet 
Funding Goals 
‘‘(h)(1) If the average daily balance in a State ac-
count in the Unemployment Trust Fund for any calendar 
quarter exceeds the funding goal of such State, the 
amount otherwise creditable to such account under sub-
section (e) for such quarter shall be increased by the inter-
est premium on such excess. If the average daily balance 
in such a State account for any calendar quarter is less 
than the funding goal of such State, the amount otherwise 
creditable to such account under subsection (e) for such 
quarter shall be decreased by the interest penalty. 
‘‘(2) Paragraph (1) shall not apply with respect to 
any interest premium or interest penalty to the extent that 
such application would result in an increase or decrease
of more than $2,500,000 in the amount creditable to any 
State account for any calendar quarter. 
‘‘(3) For purposes of this subsection, the term ‘inter-
est premium’ means, for any calendar quarter—
‘‘(A) with respect to the State with the largest 
percentage value of excess of the average daily bal-
ance in the State account in the Unemployment 
Trust Fund over the funding goal of such State,
one-half of one percent of the amount of such ex-
cess, and 
‘‘(B) with respect to each other State, the prod-
uct of—
‘‘(i) the amount of the excess of the aver-
age daily balance in the State account in the 
Unemployment Trust Fund over the funding 
goal of such State, and 
‘‘(ii) the percentage which bears the same 
ratio to one-half of one percent as—
‘‘(I) the percentage value of such ex-
cess, bears to 
‘‘(II) the percentage value of the ex-
cess of the State referred to in subpara-
graph (A). 
The Secretary shall make appropriate adjustments in the 
interest premium for any calendar quarter if the aggregate
interest premiums payable for such quarter exceed the ag-
gregate interest penalties for such quarter. 
‘‘(4) For purposes of this subsection, the term ‘inter-
est penalty’ means, for any calendar quarter—
‘‘(A) with respect to the State with the largest 
percentage value of excess of the funding goal of 
such State over the average daily balance in the 
State account in the Unemployment Trust Fund, 
one-half of one percent of the amount otherwise 
creditable to such account under subsection (e), and 
‘‘(B) with respect to each other State, the prod-
uct of—
‘‘(i) the amount otherwise creditable to 
such account under subsection (e), and 
‘‘(ii) the percentage which bears the same 
ratio to one-half of one percent as—
‘‘(I) the percentage value of the excess 
of the funding goal of the State over such
average daily balance of such State, bears 
to 
‘‘(II) the percentage value of such ex-
cess of the State referred to in subpara-
graph (A). 
‘‘(5) For purposes of this subsection, the term ‘fund-
ing goal’ means, for any State for any calendar quarter,
the average of the unemployment insurance benefits paid 
by such State during each of the 3 years, in the 20-year 
period ending with the calendar year containing such cal-
endar quarter, during which the State paid the greatest 
amount of unemployment benefits. 
‘‘(6) For purposes of this subsection, the term ‘per-
centage value’ means—
‘‘(A) with respect to any excess of the average 
daily balance in a State account in the Unemploy-
ment Trust Fund over the funding goal of such 
State, the percentage which such excess bears to 
such funding goal, and 
‘‘(B) with respect to any excess of such funding 
goal over such average daily balance, the percentage 
which such excess bears to such funding goal.’’. 
(b) CONFORMING AMENDMENTS.—
(1) 
AMOUNTS
CREDITED
TO
STATE
AC-
COUNTS.—Subsection (e) of section 904 of the So-
cial Security Act (42 U.S.C. 1104(e)) is amended in 
the first sentence by inserting ‘‘(as modified by sub-
section (h))’’ after ‘‘a proportionate part’’. 
(2) INTEREST RATE ON REPAYMENT OF AD-
VANCES DETERMINED WITHOUT REGARD TO INTER-
EST PREMIUMS OR PENALTIES ON AMOUNTS CRED-
ITED TO STATE ACCOUNTS.—Subparagraph (A) of
section 
1202(b)(4) 
of 
such 
Act 
(42 
U.S.C. 
1322(b)(4)) is amended by inserting ‘‘(determined 
without regard to section 904(h))’’ after ‘‘preceding 
calendar year’’. 
(c) REPORT.—Not later than 6 months after the date 
of the enactment of this Act, the Secretary of Labor shall 
submit to the Congress a report recommending sources of 
funding for the crediting of interest premiums under sub-
section (h) of section 904 of the Social Security Act (42 
U.S.C. 1104), as added by this section, in the event that 
the imposition of interest penalties under such subsection 
is insufficient to fund such premiums. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to calendar years beginning after 
December 31, 2005. 
SEC. 302. AMENDMENTS TO TRIGGER PROVISIONS OF EX-
TENDED BENEFIT PROGRAM. 
(a) LOWERING OF EXTENDED BENEFIT ‘‘ON’’ INDI-
CATOR.—Section 203(d) of the Federal-State Extended 
Unemployment Compensation Act of 1970 (26 U.S.C. 
3304 note) is amended—
(1) in paragraph (1)(B), by striking ‘‘5 per cen-
tum’’ and inserting ‘‘4 per centum’’, and 
(2) in the first sentence following paragraph 
(2)—
(A) by striking ‘‘5’’ and inserting ‘‘4’’, and 
(B) by striking ‘‘6’’ and inserting ‘‘5’’. 
(b) ALTERNATIVE TRIGGER.—Section 203(f) of such 
Act is amended—
(1) by striking ‘‘(f)(1)’’ and all that follows 
through ‘‘section—’’ and inserting the following: 
‘‘(f)(1) Effective with respect to compensation for 
weeks of unemployment beginning after December 31, 
2003, for purposes of this section—’’; and 
(2) in the last sentence of paragraph (1), by 
striking ‘‘Notwithstanding the provision of any State 
law described in this paragraph,’’ and inserting 
‘‘Notwithstanding any other provision of this sub-
section,’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply for purposes of determining wheth-
er there are State ‘‘on’’ or ‘‘off’’ indicators for weeks be-
ginning on or after January 1, 2004. 
SEC. 303. ELIMINATE SPECIAL FEDERAL ELIGIBILITY RE-
QUIREMENTS FOR EXTENDED COMPENSA-
TION. 
(a) IN GENERAL.—Section 202(a) of the Federal-
State Extended Unemployment Compensation Act of 1970 
(26 U.S.C. 3304 note) is amended by striking paragraphs 
(3) through (7).
(b) CONFORMING AMENDMENT.—Section 202(a)(2) 
of such Act is amended by striking ‘‘Except’’ and all that 
follows through ‘‘title, the’’ and inserting ‘‘The’’. 
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply in the case of compensation paid to indi-
viduals during eligibility periods beginning on or 
after January 1, 2004. 
(2) SPECIAL RULE FOR CERTAIN STATES.—In 
the case of any State the legislature of which has 
not been in session for at least 30 calendar days 
(whether or not successive) between the date of the 
enactment of this Act and January 1, 2004, the 
amendments made by this section shall apply in the 
case of compensation paid to individuals during eli-
gibility periods beginning after the end of the first 
session of the State legislature which begins on or 
after January 1, 2004.
TITLE IV—IMPROVING ADMINIS-
TRATIVE FUNDING FOR THE 
UNEMPLOYMENT SYSTEM 
SEC. 401. FUNDING FOR ADMINISTRATION OF STATE UNEM-
PLOYMENT COMPENSATION, STATE SYSTEMS 
OF PUBLIC EMPLOYMENT OFFICES AND VET-
ERANS EMPLOYMENT SERVICE PROGRAMS. 
(a) IN GENERAL.—Paragraph (1) of section 901(c) 
of the Social Security Act (42 U.S.C. 1101(c)(1)) is 
amended by striking all that precedes clause (i) of sub-
paragraph (B) and inserting the following: 
‘‘(c)(1)(A) There are hereby appropriated out of the 
employment security administration account for each fis-
cal year—
‘‘(i) the amount determined under subsection 
(g) for such year for assisting the States in the ad-
ministration of their unemployment compensation 
laws as provided in title III (including administra-
tion pursuant to agreements under any Federal un-
employment compensation law), 
‘‘(ii) the amount determined under subsection 
(h) for such year for providing reemployment serv-
ices, including administering the work test for the 
State unemployment compensation system and pro-
viding job finding and placement services, to unem-
ployment compensation claimants, 
‘‘(iii) the amount determined under subsection 
(i) for such year for the establishment and mainte-
nance of systems of public employment offices in ac-
cordance with the Wagner-Peyser Act (29 U.S.C. 49 
et seq.), and 
‘‘(iv) the amounts determined under sections 
4103A(a)(1) and 4104(a)(1) of title 38 of the 
United States Code for such year for carrying out 
sections 4103A and 4104 of such title, respectively. 
The Secretary of Labor may reserve not more than 0.4 
percent of the funds appropriated under clauses (i) and 
(ii), respectively, for any fiscal year to carry out national 
activities that benefit the Federal-State unemployment 
compensation system as a whole, are interstate or 
multistate in nature, or are more efficiently and effectively 
performed on a centralized basis. 
‘‘(B) There are hereby authorized to be made avail-
able for expenditure out of the employment security ad-
ministration account for each fiscal year such amounts 
(not in excess of the limit provided by paragraph (4) with 
respect to subparagraph (A)(iii)) as the Congress may 
deem appropriate for the necessary expenses of the De-
partment of Labor for the performance of its functions 
under—’’. 
(b) FUNDING FORMULAS.—Section 901 of the Social 
Security Act (42 U.S.C. 1101) is amended by adding at 
the end the following: 
‘‘Amounts Appropriated for Administrative Costs of 
State Unemployment Compensation Programs 
‘‘(g)(1) For fiscal year 2004 and each fiscal year 
thereafter, the amount appropriated for funding costs of
administering State unemployment compensation pro-
grams under subsection (c)(1)(A)(i), shall be the sum of—
‘‘(A)(i) the amount determined under this 
clause for the prior fiscal year (except that in deter-
mining funding for fiscal year 2004, the amount for 
the prior fiscal year shall equal $789) multiplied by 
the projected change in the gross domestic product 
price index for the fiscal year for which the deter-
mination is being made, multiplied by 
‘‘(ii) the projected average weekly number of in-
dividuals filing claims for compensation (within the 
meaning of section 85(b) of the Internal Revenue 
Code of 1986) for such fiscal year, except that an 
individual shall not be included in such number sole-
ly by reason of filing a claim for assistance under 
section 410(a) of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C. 
5177(a)); and 
‘‘(B)(i) the amount determined under this 
clause for the prior fiscal year (except that in deter-
mining the funding for fiscal year 2004, the amount 
for the prior fiscal year shall equal $138) multiplied 
by the projected change in the gross domestic prod-
uct price index for the fiscal year for which the de-
termination is being made, multiplied by 
‘‘(ii) the average quarterly number of employers 
subject to State unemployment compensation laws 
projected for such fiscal year. 
‘‘(2) In addition to the amounts determined under 
paragraph (1) for a fiscal year, if the weekly average of 
insured unemployed individuals for such fiscal year (as 
projected using the economic assumptions released by the 
President during such fiscal year under section 1106 of 
title 31, United States Code, and excluding the same 
claimants as are excluded under paragraph (1)(A)(ii)) ex-
ceeds the projection used in such paragraph (1)(A)(ii), 
then additional amounts shall be appropriated under sub-
section (c)(1)(A)(i) for funding the costs of administering 
the State unemployment compensation programs equal 
to—
‘‘(A)(i) the amount determined under this sub-
paragraph for the prior fiscal year (except that in 
determining funding for fiscal year 2004, the 
amount for the prior fiscal year shall equal $298) 
multiplied by the projected change in the gross do-
mestic product price index for the fiscal year for 
which the determination is being made, multiplied by 
‘‘(ii) the difference between the weekly average 
of insured unemployed individuals (as measured 
using the most recent economic assumptions re-
leased by the President during such fiscal year) and 
the weekly average of insured unemployed individ-
uals projected under paragraph (1)(A)(ii) for such 
fiscal year. 
The additional amounts made available pursuant to this 
paragraph for a fiscal year shall be available to be allo-
cated to the States only to the extent that the projected 
weekly average of insured unemployed individuals for such 
fiscal year, as referred to in the preceding sentence (in 
the matter preceding subparagraph (A)) exceeds the pro-
jection used in paragraph (1)(A)(ii). 
‘‘Amounts Appropriated to States for the Provision of 
Reemployment Services 
‘‘(h) For fiscal year 2004 and each fiscal year there-
after, the amount appropriated for funding costs of pro-
viding reemployment services to unemployment compensa-
tion claimants under subsection (c)(1)(A)(ii) shall be—
‘‘(1) the amount determined under this para-
graph for the prior fiscal year (except that in deter-
mining funding for fiscal year 2004, the amount for 
the prior fiscal year shall equal $11.10) multiplied 
by the projected change in the gross domestic prod-
uct price index for the fiscal year for which the de-
termination is being made, multiplied by 
‘‘(2) the projected number of payments of un-
employment compensation representing first weeks 
compensated in a benefit year for such fiscal year. 
‘‘Amounts Appropriated for Administration of State 
Public Employment Offices 
‘‘(i) For fiscal year 2004 and each fiscal year there-
after, the amount appropriated for funding the costs of 
administering the State system of public employment of-
fices under subsection (c)(1)(A)(iii) shall be—
‘‘(1) the amount determined under this para-
graph for the prior fiscal year (except that in deter-
mining funding for fiscal year 2004, the amount for 
the prior fiscal year shall equal $7.30) multiplied by 
the projected change in the gross domestic product 
price index for the fiscal year for which the deter-
mination is being made, multiplied by
‘‘(2) the projected average monthly number of 
individuals in the civilian labor force for such fiscal 
year. 
‘‘Calculation of Appropriated Amounts by the Secretary 
of Labor 
‘‘(j) For purposes of subsections (g), (h) and (i)—
‘‘(1) each projection shall be made by the Sec-
retary of Labor using the economic assumptions re-
leased by the President for such fiscal year, during 
the preceding fiscal year, under section 1106 of title 
31, United States Code, except as otherwise pro-
vided under subsection (g)(2) or (h)(2), and 
‘‘(2) the projected change in the gross domestic 
product price index for the fiscal year for which the 
determination is being made shall equal the sum of 
1 and the quotient of the percent change in the 
gross domestic product price index projected for 
such fiscal year divided by 100. 
‘‘Special Rules Relating to Use of Amounts Appropriated 
‘‘(k)(1) Amounts appropriated under paragraphs 
(1)(A)(i)–(ii) and (6) of subsection (c) with respect to a 
fiscal year shall remain available for obligation by the 
States during such fiscal year and the first quarter of the 
following fiscal year, except that funds used for automa-
tion acquisitions shall remain available for obligation by
the States through the end of the second fiscal year fol-
lowing the fiscal year in which such funds are appro-
priated. 
‘‘(2) Amounts reserved by the Secretary of Labor 
under the second sentence of subsection (c)(1)(A) may be 
obligated in contracts, grants, or agreements with non-
State entities. 
‘‘(3) Amounts appropriated under paragraph (1)(A) 
and paragraph (6) of subsection (c) may be used by the 
States to fund integrated employment service and unem-
ployment compensation automation efforts notwith-
standing the cost allocation principles prescribed under 
Office of Management and Budget Circular No. A–87.’’. 
(c) FUNDING FOR IMPROVED TECHNOLOGY TO AS-
SIST IN DETERMINING BENEFIT ELIGIBILITY.—Section 
901(c) of the Social Security Act (42 U.S.C. 1101(c)) is 
amended by adding at the end the following new para-
graph: 
‘‘(6) In addition to amounts provided under para-
graph (1)(A)(i)–(ii), there is hereby appropriated out of 
the 
employment 
security 
administration 
account 
$60,000,000 for fiscal year 2004 for the purpose of assist-
ing States in funding technology and other costs that ac-
celerate access to wage and employment information in
order to determine eligibility for unemployment compensa-
tion.’’. 
(d) CONFORMING AMENDMENTS.—
(1) PAYMENTS TO STATES FOR REEMPLOYMENT 
SERVICES.—Section 302 of the Social Security Act 
(42 U.S.C. 502) is amended by adding at the end 
the following: 
‘‘(d) The Secretary of Labor shall from time to time 
certify to the Secretary of the Treasury for payment to 
each State such amounts as the Secretary of Labor deter-
mines appropriate for providing reemployment services, in-
cluding administering the work test for the State unem-
ployment compensation system and providing job finding 
and placement services, to claimants for unemployment 
compensation.’’. 
(2) EXPENDITURE OF FUNDS FOR REEMPLOY-
MENT SERVICES.—Section 303(a)(8) of the Social 
Security Act (42 U.S.C. 503(a)(8)) is amended—
(A) by inserting ‘‘subsections (a) and (b) 
of’’ after ‘‘pursuant to’’; and 
(B) by inserting before the semicolon at 
the end the following: ‘‘and the expenditure of 
all moneys received pursuant to section 302(d) 
of this title solely for the purposes and in the 
amounts found necessary by the Secretary of
Labor for providing reemployment services to 
claimants for unemployment compensation’’. 
(3) REPLENISHMENT OF FUNDS NOT USED FOR 
REEMPLOYMENT
SERVICES.—Section 303(a)(9) of 
the Social Security Act (42 U.S.C. 503(a)(9)) is 
amended—
(A) by inserting ‘‘subsections (a) and (b) 
of’’ after ‘‘pursuant to’’; and 
(B) by inserting before the semicolon at 
the end the following: ‘‘and the replacement, 
within a reasonable time, of any moneys re-
ceived pursuant to section 302(d) of this title 
which, because of any action or contingency, 
have been lost or have been expended for pur-
poses other than, or in amounts in excess of, 
those found necessary by the Secretary of 
Labor for providing reemployment services to 
claimants for unemployment compensation’’. 
(4) REPEALS.—The following provisions of the 
Social Security Act are repealed: 
(A) Paragraph (3) of section 901(c). 
(B) The second sentence of section 
901(f)(3)(A). 
(5) AMOUNT OF AUTHORIZATION UNDER THE 
WAGNER-PEYSER ACT.—
(A) Section 901(c)(4) of the Social Secu-
rity Act (42 U.S.C. 1101(c)(4)) is amended—
(i) by striking ‘‘paragraphs (1)(A)(ii) 
and’’ and inserting ‘‘paragraph’’; 
(ii) by striking ‘‘the proportion of the 
total cost of administering the system of 
public employment offices in accordance 
with the Act of June 6, 1933, as amended, 
and of’’; and 
(iii) by striking the last sentence. 
(B) Section 901(c)(1)(B) of the Social Se-
curity Act (42 U.S.C. 1101(c)(1)(B)) is amend-
ed by moving clauses (i) through (v) 2 ems to 
the left, and by striking clause (iii) and insert-
ing the following: 
‘‘(iii) the Wagner-Peyser Act (29 U.S.C. 49 et 
seq.),’’. 
(6) APPROPRIATION REFERENCE IN THE WAG-
NER-PEYSER ACT.—Section 5 of the Wagner-Peyser 
Act (29 U.S.C. 49d) is amended—
(A) by striking all that precedes subsection 
(b) and inserting the following: 
‘‘SEC. 5. (a) The amounts available to carry out sec-
tions 1 through 13 of this Act shall be appropriated in 
accordance with section 901 of the Social Security Act.’’;
(B) by striking subsection (b); and 
(C) by redesignating subsection (c) as sub-
section (b). 
(e) BUDGET JUSTIFICATION.—No funds may be ex-
pended under the amendments made by this section unless 
the Secretary of Labor includes in the Department of La-
bor’s annual budget justification to Congress a detailed 
description of the specific activities for which the funds 
made available by such amendments have been used in the 
prior and current years (if applicable) and the activities 
and costs planned for the budget year. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to fiscal year 2004 and subsequent 
fiscal years.
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