I
106TH CONGRESS
1ST SESSION
H. R. 1830
To enhance the Federal-State Extended Benefit program, to provide incentives
to States to implement procedures that will expand eligibility for unem-
ployment compensation, to strengthen administrative financing of the
unemployment compensation program, to improve the solvency of State
accounts in the Unemployment Trust Fund, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 17, 1999
Mr. LEVIN (for himself, Mr. ENGLISH, Mr. KLECZKA, Mr. HILLIARD, Mr.
THOMPSON of Mississippi, Mr. KUCINICH, and Ms. SCHAKOWSKY) intro-
duced the following bill; which was referred to the Committee on Ways
and Means
A BILL
To enhance the Federal-State Extended Benefit program,
to provide incentives to States to implement procedures
that will expand eligibility for unemployment compensa-
tion, to strengthen administrative financing of the unem-
ployment compensation program, to improve the solvency
of State accounts in the Unemployment Trust Fund,
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.
This Act may be cited as the ‘‘Unemployment Com-
pensation Amendments of 1999’’.
SEC. 2. AMENDMENTS TO EXTENDED BENEFIT PROGRAM.
(a) REPEAL
OF CERTAIN STATE LAW REQUIRE-
MENTS.—Section 202 of the Federal-State Extended Un-
employment Compensation Act of 1970 (26 U.S.C. 3304
note) is amended—
(1) by striking paragraphs (3), (4), (5), (6),
and (7) of subsection (a); and
(2) by repealing subsection (c).
(b) ESTABLISHMENT
OF MANDATORY TRIGGERS
BASED ON TOTAL UNEMPLOYMENT.—
(1) STATE ‘ON’ AND ‘OFF’ INDICATORS.—Sub-
section (d) of section 203 of such Act is amended to
read as follows:
‘‘State ‘On’ and ‘Off’ Indicators
‘‘(d) For purposes of this section—
‘‘(1) There is a State ‘on’ indicator for a week
if—
‘‘(A)(i) the average rate of total unemploy-
ment in such State (seasonally adjusted) for the
period consisting of the most recent three
months for which data for all States are pub-
lished before the close of the week equals or ex-
ceeds 7.5 percent, and
‘‘(ii) the average rate of total unemploy-
ment in such State (seasonally adjusted) for the
3-month period referred to in clause (i) equals
or exceeds 110 percent of such average for ei-
ther (or both) of the corresponding 3-month pe-
riods ending in the two preceding calendar
years; or
‘‘(B) the average rate of total unemploy-
ment for such State (seasonally adjusted) for
the period consisting of the most recent 3
months for which data for all States are pub-
lished before the close of the week equals or ex-
ceeds 10 percent.
‘‘(2) There is a State ‘off’ indicator for a week
unless the requirements of subparagraph (A) or (B)
of paragraph (1) are satisfied.’’.
(2) DETERMINATION OF RATES OF TOTAL UN-
EMPLOYMENT
AND
INSURED
UNEMPLOYMENT.—
Subsection (e) of section 203 of such Act is amended
to read as follows:
‘‘Determination of Rates of Total Unemployment and
Insured Unemployment
‘‘(e)(1) For purposes of this Act, determinations of
the rate of total unemployment in any State for any period
(and of any seasonal adjustments) shall be made by the
Secretary.
‘‘(2)(A) For purposes of subsection (f)(2), the rate
of insured unemployment for any thirteen-week period
shall be determined by reference to the average monthly
covered employment under the State law for the first four
of the most recent six calendar quarters ending before the
close of such period.
‘‘(B) For purposes of subsection (f)(2), the term ‘rate
of insured unemployment’ means the percentage arrived
at by dividing—
‘‘(i) the average weekly number of individuals
filing claims for regular compensation for weeks of
unemployment with respect to the specified period,
as determined on the basis of the reports made by
the State agency to the Secretary, by
‘‘(ii) the average monthly covered employment
for the specified period.
‘‘(C) Determinations under subsection (f)(2) shall be
made by the State agency in accordance with regulations
prescribed by the Secretary.’’.
(c) REQUIREMENTS FOR SUPPLEMENTAL BENEFITS
DURING HIGH UNEMPLOYMENT PERIODS.—
(1) IN GENERAL.—Subparagraph (B) of section
202(b)(3) of such Act is amended to read as follows:
‘‘(B) For purposes of subparagraph (A), the term
‘high unemployment period’ means any period during
which an extended benefit period would be in effect if—
‘‘(i)(I) section 203(d)(1)(A)(i) were applied by
substituting ‘10 percent’ for ‘7.5 percent’; and
‘‘(II) section 203(d)(1)(B) were applied by sub-
stituting ‘12.5 percent’ for ‘10 percent’; and
‘‘(ii) section 203(f)(1)(A)(i) were applied by
substituting ‘8 percent’ for ‘6.5 percent’.’’.
(2) TECHNICAL AMENDMENT.—Subsection (b)
of section 202 of such Act is amended by moving the
text of paragraph (3)(A) of such subsection 2 ems
to the left.
(d) AMENDMENTS TO ALTERNATIVE TRIGGER.—Sec-
tion 203(f) of such Act is amended—
(1) in paragraph (1), by striking ‘‘Effective
with respect to compensation for weeks of employ-
ment beginning after March 6, 1993, the’’ and in-
serting ‘‘In lieu of applying the indicator specified in
subsection (d)(1)(A), a’’;
(2) by amending paragraph (2) to read as fol-
lows:
‘‘(2) A State may by law provide that, for the purpose
of beginning or ending any extended period under this sec-
tion, in addition to the indicators specified in subsection
(d) and paragraph (1) of this subsection—
‘‘(A) there is a State ‘on’ indicator for a week
if the rate of insured unemployment under State law
for the period consisting of such week and the imme-
diately preceding twelve weeks equals or exceeds 6
percent; and
‘‘(B) there is a State ‘off’ indicator for a week
if the requirement set forth in subparagraph (A) is
not satisfied.
Notwithstanding the provision of any State law described
in this paragraph, any week for which there would other-
wise be a State ‘on’ indicator shall continue to be such
a week and shall not be determined to be a week for which
there is a State ‘off’ indicator.’’.
SEC. 3. SPECIAL DISTRIBUTIONS TO THE STATES.
Section 903(a)(3) of the Social Security Act (42
U.S.C. 1103(a)(3)) is amended—
(1) in subparagraph (A) by amending clauses
(i) and (ii) to read as follows:
‘‘(i) be subject to subparagraphs (B)
and (C), to the extent such amounts are
not in excess of the sum of—
‘‘(I) $20,000,000, plus
‘‘(II) the amount determined by
the Secretary of Labor to be the dif-
ference between the amount necessary
for the proper and efficient adminis-
tration of the unemployment com-
pensation program for the succeeding
fiscal year (taking into account work-
load and other appropriate factors)
and $2,419,000,000, and
‘‘(ii) be subject to subparagraph (D),
to the extent such amounts are in excess of
the sum of subclauses (I) and (II) of
clause (i).’’;
(2) in subparagraph (B) by striking ‘‘(A)(i)’’
and inserting ‘‘(A)(i)(II)’’;
(3) by redesignating subparagraphs (B) and
(C) as subparagraphs (C) and (D), respectively; and
(4) by inserting after subparagraph (A) the fol-
lowing new subparagraph:
‘‘(B) The Secretary of Labor shall reserve the
amount specified in subparagraph (A)(i)(I) (at the close
of fiscal years 1999, 2000, and 2001) to award grants
to the States in fiscal years 2000, 2001, and 2002 to as-
sist in the implementation of alternative base periods for
determining the eligibility of claimants. Such alternative
base periods shall reduce the period of time between the
end of the base period for a claimant and the filing of
a claim for compensation. The amounts reserved pursuant
to this subparagraph shall be available to the Secretary
of Labor for obligation through fiscal year 2002.’’.
SEC. 4. SOLVENCY REQUIREMENTS.
Section 903(b) of the Social Security Act (42 U.S.C.
1103(b)) is amended by adding at the end the following
new paragraph:
‘‘(3)(A) If the Secretary of Labor finds that, as of
December 31, 2001, a State has not achieved, or made
acceptable progress toward achieving, the solvency target
established pursuant to subparagraph (B), then, subject
to the limitation described in subparagraph (C), the
amount available under this section for transfer to such
State account for the succeeding fiscal year shall, in lieu
of being so transferred, be transferred to the States meet-
ing the requirements of this subsection. The transfers
shall be made to such States based on the share of funds
of each such State under subsection (a)(2), except that,
for purposes of this subparagraph, the ratio under sub-
section (a)(2) shall be adjusted by excluding the wages at-
tributable to the States failing to meet the requirements
of this subparagraph.
‘‘(B)(i) For December 31, 2001, the solvency target
shall be an average high cost multiple of 1.0. For purposes
of this subparagraph, the average high cost multiple rep-
resents the number of years a State could pay unemploy-
ment compensation (based on the reserve ratio of such
State) if the State paid such compensation at a rate equiv-
alent to the average benefit cost rate such State paid in
the three calendar years during the preceding 20 calendar
years (or, if longer, during the period consisting of the
preceding three recessions as determined by the National
Bureau of Economic Research) that the benefit cost rates
were the highest. For purposes of making this
determination—
‘‘(I) the term ‘reserve ratio’ means the ratio de-
termined by dividing the balance in the State ac-
count at the end of the calendar year by the total
covered wages in the State for such year;
‘‘(II) the term ‘benefit cost rate’ means the rate
determined by dividing the unemployment compensa-
tion paid during a calendar year by the total covered
wages in the State for such year; and
‘‘(III) the ratio and rates determined under
subclauses (I) and (II) shall exclude the wages and
unemployment compensation paid by employers cov-
ered under section 3309 of the Internal Revenue
Code of 1986.
‘‘(ii) For December 31, 2001, acceptable progress to-
wards achieving the solvency target shall mean that a
State has reduced any difference between 1.0 and the av-
erage high cost multiple of such State (if such multiple
is less than 1.0) that the Secretary found to exist as of
December 31, 1998, by an amount equal to or exceeding
5 percent of such difference.
‘‘(iii) The Secretary may adjust the solvency target
specified in clause (i), or the criteria for determining
whether there is acceptable progress towards achieving the
solvency target specified in clause (ii), for States that ex-
perience significant increases in unemployment during the
period between December 31, 1998, and December 31,
2001. The Secretary shall establish objective criteria for
making such adjustments.
‘‘(iv) A State shall include, as part of the annual
State plan relating to the administration of grants under
this title, such information as the Secretary may request
relating to the manner in which the State intends to
achieve the solvency target established pursuant to this
paragraph.
‘‘(C) The requirements of subparagraph (A) shall
apply to excess (referred to in subsection (a)(1)) remain-
ing in the employment security account at the close of fis-
cal year 2002 that are equal to or less than
$2,900,000,000. Such requirements shall not apply to any
such 
excess 
amounts 
that 
are 
greater 
than
$2,900,000,000.’’.
SEC. 5. TREATMENT OF SHORT-TIME COMPENSATION PRO-
GRAMS.
(a) GENERAL RULE.—Section 3306 of the Internal
Revenue Code of 1986 (26 U.S.C. 3306) is amended by
adding at the end the following new subsection:
‘‘(u) SHORT-TIME COMPENSATION PROGRAM.—For
purposes of this chapter, the term ‘short-time compensa-
tion program’ means a program under which—
‘‘(1) the participation of an employer is vol-
untary;
‘‘(2) an employer reduces the number of hours
worked by employees in lieu of temporary layoffs;
‘‘(3) such employees whose workweeks have
been reduced by at least 10 percent are eligible for
unemployment compensation;
‘‘(4) the amount of unemployment compensa-
tion payable to any such employee is a pro rata por-
tion of the unemployment compensation which would
be payable to the employee if such employee were to-
tally unemployed;
‘‘(5) such employees are not required to meet
the availability for work or work search test require-
ments while collecting short-time compensation bene-
fits, but are required to be available for their normal
workweek;
‘‘(6) eligible employees may participate in an
employer-sponsored training program to enhance job
skills if such program has been approved by the
State agency;
‘‘(7) the State agency may require an employer
to continue to provide health benefits, and retire-
ment benefits under a defined benefit pension plan
(as defined in section 414(j)) to any employee whose
workweek is reduced pursuant to the program as
though the workweek of such employee had not been
reduced;
‘‘(8) the State agency may require an employer
(or an employers’ association which is party to a col-
lective bargaining agreement) to submit a written
plan describing the manner in which the require-
ments of this subsection will be implemented and
containing such other information as the Secretary
of Labor determines is appropriate; and
‘‘(9) the program meets such other require-
ments as the Secretary of Labor determines are ap-
propriate.’’.
(b) CONFORMING AMENDMENTS.—
(1) Subparagraph (E) of section 3304(a)(4) of
such Code (26 U.S.C. 3304(a)(4)(E)) is amended to
read as follows:
‘‘(E) amounts may be withdrawn for the
payment of short-time compensation under a
short-time compensation program (as defined
under section 3306(u));’’.
(2) Paragraph (5) of section 3306(f) of such
Code (26 U.S.C. 3306(f)(5)) is amended to read as
follows:
‘‘(5) amounts may be withdrawn for the pay-
ment of short-time compensation under a short-time
compensation program (as defined under subsection
(u)); and’’.
(3) Section 303(a)(5) of the Social Security Act
(42 U.S.C. 503(a)(5)) is amended by striking ‘‘the
payment of short-time compensation under a plan
approved by the Secretary of Labor’’ and inserting
‘‘the payment of short-time compensation under a
short-time compensation program (as defined in sec-
tion 3306(u) of the Internal Revenue Code of
1986)’’.
SEC. 6. EFFECTIVE DATE.
(a) IN GENERAL.—Except as provided in subsection
(b), the provisions of this Act shall take effect on the date
of enactment of this Act.
(b) EXTENDED BENEFIT AMENDMENTS.—
(1) Except as provided in paragraph (2), the
provisions of section 2 of this Act shall take effect
for the weeks beginning on or after October 1, 2002.
(2) Pursuant to the enactment of appropriate
provisions of the State law, the provisions of section
2 may, with respect to such State, take effect for
weeks which begin earlier than the weeks specified
in paragraph (1), but not earlier than 60 days after
the date of enactment of this Act.
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