refunds paid in accordance with the provisions of
section 3305(b) of the Federal Unemployment Tax
Act (26 U.S.C. 3305(b)): Provided, That an amount
equal to the amount of employee payments into the
Unemployment Compensation Benefit Account with-
in the unemployment fund of a State may be used
in the payment of cash benefits to individuals with
respect to their disability, exclusive of expenses of
administration: Provided further, That the amounts
specified by section 1103(c)(2) of this title may, sub-
ject to the conditions prescribed in such section, be
used for expenses incurred by the State for adminis-
tration of its unemployment compensation law and
public employment services: Provided further, That
nothing in this paragraph shall be construed to pro-
hibit deducting an amount from unemployment ben-
efits and used to repay overpayments as provided in
subsection (g) of this section: Provided further, That
amounts may be withdrawn for the payment of
short-time compensation under a plan approved by
the Secretary of Labor: Provided further, That
amounts may be withdrawn for the payment of al-
lowances under a self-employment assistance pro-
gram (as defined in section 3306(t) of the Internal
Revenue Code of 1986 (26 U.S.C. 3306(t)); and’’.
(c) USE OF ADMINISTRATIVE FUNDS.—Effective Oc-
tober 1, 1999, paragraph (8) of section 303(a) of the So-
cial Security Act is amended to read as follows:
‘‘(8) Expenditure of all moneys received pursu-
ant to title IX of the Social Security Act solely for
the proper and efficient administration of such State
law and services specified in title IX of the Social
Security Act, and section 3304 of the Internal Reve-
nue Code of 1986; and’’.
(d) PROPER ADMINISTRATION REQUIREMENT.—Ef-
fective October 1, 1999, paragraph (9) of section 303(a)
of the Social Security Act is amended to read as follows:
‘‘(9) The replacement, within a reasonable time,
of any moneys received pursuant to title IX of the
Social Security Act, which, because of any action or
contingency, have been lost or have been expended
for purposes other than those necessary for the
proper administration of such State law and the pro-
vision of services under title IX of the Social Secu-
rity Act, and section 3304 of the Internal Revenue
Code of 1986; and’’.
SEC. 303. INTERPRETATION OF METHODS OF ADMINISTRA-
TION REQUIREMENT.
Effective October 1, 1999, subsection (a) of section
303 of the Social Security Act, as amended by section 302
of this Act, is amended by striking the period at the end
of paragraph (10) and inserting ‘‘; and’’ and by adding
at the end the following new paragraph:
‘‘(11) States shall not be required to comply
with interpretations of the Secretary of Labor with
respect to methods of administration requirements
under paragraph (1) of this subsection, including
but not limited to requirements with respect to qual-
ity control, if such interpretations impose additional
administrative burdens on the States, unless con-
gress enacts legislation which approves such inter-
pretation.’’
TITLE 
IV—EXTENDED 
UNEM-
PLOYMENT 
COMPENSATION
ACT OF 1998
SEC. 401. EXTENDED UNEMPLOYMENT COMPENSATION ACT
OF 1998.
Effective November 1, 2003, title II of the Employ-
ment Security Amendments of 1970 (26 U.S.C. 3304
note) is amended to read as follows:
‘‘TITLE II—EXTENDED UNEMPLOYMENT
COMPENSATION PROGRAM
‘‘SHORT TITLE
‘‘SEC. 201. This title may be cited as the ‘Extended
Unemployment Compensation Act of 1998’.
‘‘STATE LAW REQUIREMENTS
‘‘SEC. 
202. 
(a)(1) 
For 
purposes 
of 
section
3304(a)(11) of the Internal Revenue Code of 1986, a
State law shall provide that payment of extended com-
pensation shall be made, for any week of unemployment
which begins in the individual’s eligibility period as pre-
scribed by State law, to individuals who have exhausted
all rights to regular compensation and who have no rights
to regular compensation with respect to such week under
State unemployment compensation law or under the un-
employment compensation law of Canada. For purposes
of the preceding sentence, an individual shall have ex-
hausted his rights to regular compensation—
‘‘(A) when no payments of regular compensa-
tion are authorized to be made because the individ-
ual has received all regular compensation available
to the individual, or
‘‘(B) when the individual’s rights to such com-
pensation have terminated by reason of the expira-
tion of the benefit year with respect to which such
rights existed.
‘‘(2) The State law shall provide that the State will
establish, for each eligible individual who files an applica-
tion therefor, an extended compensation account within
the State’s Unemployment Compensation Benefit Account
with respect to such individual’s benefit year. Individuals
determined eligible for a week or weeks of extended com-
pensation shall be paid for such week or weeks by the
State agency with funds to be drawn from the State’s Un-
employment Compensation Benefit Account.
‘‘(3) States with State laws certified as meeting the
requirements of the Federal-State Extended Unemploy-
ment Compensation Act of 1970 on October 31, 1999,
shall be deemed to meet the requirements for certification
with respect to the Extended Unemployment Compensa-
tion Act of 1998 for the year ending October 31, 2000,
as long as the State law is not amended so as to conflict
with the requirements of this title.
‘‘EXTENDED BENEFIT PERIOD
‘‘SEC. 203. (a)(1) For the purposes of this title, in
the case of any State, an extended benefit period—
‘‘(A) shall begin with the third week after the
first week for which there is an ‘on’ indicator; and
‘‘(B) shall end with the third week after the
first week for which there is an ‘off’ indicator.
‘‘(2) For the purposes of this title, an individual’s eli-
gibility period under the State law shall consist of the
weeks in his benefit year which begin in an extended bene-
fit period and, if his benefit year ends within such ex-
tended benefit period, any weeks thereafter which begin
in such extended benefit period.
‘‘(b) The extended benefit period shall last for a pe-
riod of 13 consecutive weeks.
‘‘ ‘ON’ AND ‘OFF’ INDICATORS
‘‘SEC. 204. (a) There shall be an ‘on’ indicator if the
rate of insured unemployment under the State law for the
period consisting of such week and the immediately pre-
ceding 12 weeks—
‘‘(1) equaled or exceeded 120 percent of the av-
erage of such rates for the corresponding 13-week
period ending in each of the preceding two calendar
years, and
‘‘(2) equaled or exceeded 5 percent.
‘‘(b) The ‘off’ indicator shall be determined under
State law, except that if an ‘on’ indicator is triggered
under subsection (a) of this section, it shall remain on
until the rate of insured unemployment under the State
law for the period consisting of such week and the imme-
diately preceding 12 weeks fails to satisfy the require-
ments set forth in subsection (a).
‘‘RATE OF INSURED UNEMPLOYMENT; COVERED
EMPLOYMENT
‘‘SEC. 205. (a) For the purposes of this title, the term
‘rate of insured unemployment’ means the percentage ar-
rived at by dividing—
‘‘(1) the average weekly number of individuals
filing claims for weeks of unemployment with respect
to the specified 13-week period, by
‘‘(2) the average monthly covered employment
for the specified 13-week period.
‘‘DEFINITIONS
‘‘SEC. 206. (a) For purposes of this title—
‘‘(1) The term ‘compensation’ means cash bene-
fits payable to individuals with respect to their un-
employment.
‘‘(2) The term ‘regular compensation’ means
compensation payable to an individual under any
State unemployment compensation law (including
compensation payable pursuant to chapter 85 of title
5, United States Code), other than extended com-
pensation.
‘‘(3) The term ‘extended compensation’ means
compensation (including compensation payable pur-
suant to chapter 85 of title 5, United States Code),
payable for weeks of unemployment beginning in an
extended benefit period to an individual under those
provisions of the State law which satisfy the require-
ments of this title with respect to the payment of ex-
tended compensation.
‘‘(4) The term ‘benefit year’ means the benefit
year as defined in the applicable State law.
‘‘(5) The term ‘base period’ means the base pe-
riod as determined under applicable State law.
‘‘(6) The term ‘Secretary’ means the Secretary
of Labor of the United States.
‘‘(7) The term ‘State’ includes the District of
Columbia, the Virgin Islands, and the Common-
wealth of Puerto Rico.
‘‘(8) The term ‘State agency’ means the agency
of the State which administers its State law.
‘‘(9) The term ‘State law’ means the unemploy-
ment compensation law of the State, approved by
the Secretary under section 3304 of the Internal
Revenue Code of 1986.
‘‘(10) The term ‘week’ means a week as defined
in the applicable State law.’’
TITLE 
V—FEDERAL 
EMPLOY-
MENT SECURITY SERVICE
SEC. 501. AMENDMENT TO STATEMENT OF PURPOSES.
Section 1 of the Wagner-Peyser Act (29 U.S.C. 49)
is amended, effective October 1, 1999, to read as follows:
‘‘SECTION 1. In order to assist in the coordination
of public employment security services, the United States
Employment Security Service shall be established and
maintained within the Department of Labor.’’
SEC. 502. PURPOSE OF EMPLOYMENT SECURITY SERVICE.
The provisions of the Wagner-Peyser Act provided in
paragraph (a) of section 49b of title 29 of the United
States Code are amended effective October 1, 1999, to
read as follows:
‘‘(a) The United States Employment Security Service
shall assist in coordinating public employment services
throughout the country and assure that the requirements
of titles III and IX of the Social Security Act (42 U.S.C.
501 et seq. and 42 U.S.C. 1101 et seq.) and section 3304
of the Internal Revenue Code of 1986 (26 U.S.C. 3304)
are met.’’
SEC. 503. TRANSFER OF REAL PROPERTY.
The provisions of the Wagner-Peyser Act provided in
section 49c(1) of title 29 of the United States Code are
amended effective October 1, 1999, as follows: ‘‘For the
purpose of assisting in the coordination of employment
services in accordance with the terms of this chapter, the
Secretary of Labor is authorized without payment of com-
pensation to transfer and assign to the States in which
it is located all property, including records, files, and office
equipment, used by the United States Employment Serv-
ice in its administrative and local employment offices in
the respective States, except the records, files, and prop-
erty used in the Veterans Service and in the Farm Place-
ment Service maintained under this chapter.’’
SEC. 504. REPEAL OF FEDERAL APPROPRIATIONS AUTHOR-
ITY.
The provisions of the Wagner-Peyser Act set forth
in section 49d and 49e of title 29 of the United States
Code are repealed effective October 1, 2003.
SEC. 505. USE OF PUBLIC EMPLOYMENT SERVICE FUNDS.
The provisions of the Wagner-Peyser Act set forth
in subsection (a) of section 49f of title 29 of the United
States Code are amended effective October 1, 2003, to
read as follows:
‘‘(a) Funds provided to such State under title IX of
the Social Security Act for public employment services
shall be used—
‘‘(1) for determining whether individuals claim-
ing unemployment compensation under State laws
conforming to section 3304 of the Internal Revenue
Code of 1986 (26 U.S.C. 3304) are available to ac-
cept suitable work and have not refused suitable
work as prescribed by the State unemployment com-
pensation law;
‘‘(2) for job search and placement services to
individuals claiming unemployment compensation
benefits and other job seekers including counseling,
testing, occupational and labor market information,
assessment, and referral to employers; and
‘‘(3) for appropriate recruitment services and
special technical services for employers, and may be
used for any of the following activities:
‘‘(A) evaluation of programs;
‘‘(B) developing linkages between services
funded under this Act and related Federal or
State legislation, including the provision of
labor exchange services at education sites;
‘‘(C) providing services for workers who
have received notice of permanent layoff or im-
pending layoff, or workers in occupations which
are experiencing limited demand due to techno-
logical change, impact of imports, or plant clo-
sures;
‘‘(D) developing and providing labor mar-
ket and occupational information;
‘‘(E) developing a management informa-
tion system and compiling and analyzing re-
ports therefrom.’’.
SEC. 506. REPEAL OF FEDERAL USE OF FUNDS REQUIRE-
MENTS.
The provisions of the Wagner-Peyser Act set forth
in subsection (b) through (d) of section 49f of title 29
of the United States Code are repealed as of October 1,
2003.
SEC. 507. REPEAL OF FEDERAL PLANNING AND FISCAL RE-
QUIREMENTS.
The provisions of the Wagner-Peyser Act set forth
in sections 49g, 49h, 49k, 491 and 491–1 of the United
States Code are repealed as of October 1, 2003.
TITLE VI—ADVANCES TO STATE
UNEMPLOYMENT COMPENSA-
TION BENEFIT ACCOUNTS
SEC. 601. TRANSFERS FROM THE FEDERAL UNEMPLOY-
MENT ACCOUNT.
Subsection (b) of section 1201 of the Social Security
Act is amended, effective October 1, 1999, to read as fol-
lows:
‘‘(b) The Secretary of the Treasury shall, prior to
audit or settlement by the General Accounting Office,
transfer in monthly installments from the Federal Unem-
ployment Account to the Unemployment Compensation
Benefit Account of the State in the Unemployment Trust
Fund the amount certified under subsection (a) of this
section by the Secretary of Labor (but not exceeding that
portion of the balance in the Federal Unemployment Ac-
count at the time of the transfer which is not restricted
as to use pursuant to section 903 of the Social Security
Act). The amount of any monthly installment so trans-
ferred shall not exceed the amount estimated by the State
to be required for the payment of compensation for the
month with respect to which such installment is made.’’
SEC. 602. USE OF TRANSFERRED FUNDS.
Subsection (a) of section 1202 of the Social Security
Act is amended, effective October 1, 1999, to read as fol-
lows:
‘‘(a) The Governor of any State may at any time re-
quest that funds be transferred from the Unemployment
Compensation Benefit Account of such State in the unem-
ployment trust fund to the Federal Unemployment Ac-
count in repayment of part or all of that balance of ad-
vances, made to such State under section 1321 of this
title, specified in the request, and the Secretary of the
Treasury shall promptly transfer such amount in reduc-
tion of such balance.’’
SEC. 603. DETERMINATION OF INTEREST RATE.
Effective October 1, 1999, section 1202(b) of the So-
cial Security Act is amended by striking paragraphs (4)
and (5) and inserting the following:
‘‘(4) The interest rate determined under this
paragraph with respect to any calendar year is a
percentage (but not in excess of 10 percent) deter-
mined by dividing—
‘‘(A) the aggregate amount credited under
section 904 of the Social Security Act to State
‘‘ADVANCES TO FEDERAL UNEMPLOYMENT ACCOUNT
‘‘SEC. 1203. There are hereby authorized to be ap-
propriated to the Federal Unemployment Account, as re-
payable advances, such sums as may be necessary to carry
out the purposes of this title. Amounts appropriated as
repayable advances for purposes of this subsection shall
bear interest at a rate equal to the average rate of interest,
computed as of the end of the calendar month next preced-
ing the date of such advance, borne by all interest bearing
obligations of the United States then forming part of the
public debt; except that in cases in which such average
rate is not a multiple of one-eighth of 1 percent, the rate
of interest shall be the multiple of one-eighth of 1 percent
next lower than such average rate.’’
TITLE VII—CONFORMING
AMENDMENTS
SEC. 701. CONFORMING AMENDMENT TO DEFINITIONAL
PROVISION.
Section 5401(b) of the Balanced Budget Act of 1997
is amended, effective November 1, 1999, by striking ‘‘Fed-
eral-State Extended Unemployment Compensation Act of
1970 (26 U.S.C. 3304 note)’’ and inserting ‘‘Extended
Unemployment Compensation Act of 1998’’.
SEC. 702. BALANCED BUDGET AMENDMENTS.
Sections 5402, 5403, 5404, and 5408 of the Bal-
anced Budget Act of 1997, Public Law 105–33, are re-
pealed effective September 30, 2003.
SEC. 703. REPEAL OF FEDERAL UNEMPLOYMENT TAX
AMENDMENT.
Amendments enacted in section 1035 of the Taxpayer
Relief Act of 1997, Public Law 105–34, are repealed.
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