I 
108TH CONGRESS 
1ST SESSION H. R. 3295
To provide for additional benefits under the Temporary Extended Unemploy-
ment Compensation Act of 2002, to extend the Federal unemployment 
benefits system, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 15, 2003
Mr. ENGLISH introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To provide for additional benefits under the Temporary Ex-
tended Unemployment Compensation Act of 2002, to 
extend the Federal unemployment benefits 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; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Neighbors in Need Act’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—TEMPORARY EXTENDED UNEMPLOYMENT 
COMPENSATION 
Sec. 101. Additional weeks of benefits. 
Sec. 102. Program extension in States with high unemployment. 
TITLE II—FEDERAL UNEMPLOYMENT BENEFIT SYSTEM 
REFORMS 
Sec. 201. Increase and decrease in earnings credited to State accounts when 
States meet or fail to meet funding goals. 
Sec. 202. Interest-free advances to State accounts in Unemployment Trust 
Fund restricted to States which meet funding goals. 
TITLE III—AMENDMENTS TO THE INTERNAL REVENUE CODE OF 
1986 
Sec. 301. 2-year suspension of tax on unemployment compensation. 
Sec. 302. State collection of Federal unemployment tax. 
Sec. 303. Required distribution of State-specific information packets.
TITLE 
I—TEMPORARY 
EX-
TENDED 
UNEMPLOYMENT 
COMPENSATION 
SEC. 101. ADDITIONAL WEEKS OF BENEFITS. 
(a) IN GENERAL.—Section 203 of the Temporary Ex-
tended Unemployment Compensation Act of 2002 is 
amended by adding at the end the following: 
‘‘(d) ADDITIONAL WEEKS OF BENEFITS.—Notwith-
standing any other provision of this section, upon the ex-
haustion of all amounts that may be credited to an individ-
ual’s account under the preceding provisions of this sec-
tion, such account shall be increased by an amount equal 
to 8 times the individual’s average weekly benefit amount 
for the benefit year (as determined under subsection 
(b)(2)).’’.
(b) EFFECTIVE DATE
AND APPLICABILITY.—The 
amendment made by subsection (a)—
(1) shall take effect as if included in the enact-
ment of the Temporary Extended Unemployment 
Compensation Act of 2002, and shall apply to weeks 
of unemployment beginning on or after the date of 
the enactment of this Act, but 
(2) shall not apply in the case of any individual 
whose eligibility for additional weeks of benefits 
would be based on an exhaustion of amounts (as re-
quired under such amendment) occurring on or after 
the date of the enactment of this Act. 
SEC. 102. PROGRAM EXTENSION IN STATES WITH HIGH UN-
EMPLOYMENT. 
(a) APPLICABILITY.—This section applies only to any 
State with respect to which, during the last week in De-
cember 2003, an extended benefit period (as described in 
section 203 of the Federal-State Extended Unemployment 
Compensation Act of 1970)—
(1) is in effect; or 
(2) would be in effect, if subsection (d) of such 
section 203 were applied by substituting—
(A) ‘‘100’’ for ‘‘120’’ in paragraph (1)(A); 
and
(B) ‘‘3.5’’ for ‘‘5’’ in paragraph (1)(B) and 
the first flush sentence following paragraph (2). 
(b) EXTENSION.—In the case of each State that sat-
isfies subsection (a), section 208 of the Temporary Ex-
tended Unemployment Compensation Act of 2002 shall be 
applied as if it had been amended—
(1) in subsection (a)(2), by striking ‘‘December 
31, 2003’’ and inserting ‘‘March 31, 2004’’; 
(2) in subsection (b)(1), by striking ‘‘December 
31, 2003’’ and inserting ‘‘March 31, 2004’’; 
(3) in subsection (b)(2)—
(A) in the heading, by striking ‘‘DECEM-
BER 31, 2003’’ and inserting ‘‘MARCH 31, 2004’’; 
and 
(B) by striking ‘‘December 31, 2003’’ and 
inserting ‘‘March 31, 2004’’; and 
(4) in subsection (b)(3), by striking ‘‘March 31, 
2004’’ and inserting ‘‘June 30, 2004’’. 
(c) DEFINITIONS.—For purposes of this section, the 
terms ‘‘State’’ and ‘‘week’’ have the respective meanings 
given such terms under section 207 of the Temporary Ex-
tended Unemployment Compensation Act of 2002.
(d) RULE OF CONSTRUCTION.—Nothing in this Act 
shall be considered to limit, terminate, or otherwise affect 
any unemployment benefits provided under section 4002
of the Emergency Wartime Supplemental Appropriations 
Act, 2003. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as if included in the enact-
ment of the Temporary Extended Unemployment Com-
pensation Act of 2002. 
TITLE II—FEDERAL UNEMPLOY-
MENT BENEFIT SYSTEM RE-
FORMS 
SEC. 201. 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, 2007.
‘‘(c) MORATORIUM.—This section shall not apply to 
taxable years beginning in 2004 or 2005.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2003. 
SEC. 302. STATE COLLECTION OF FEDERAL UNEMPLOY-
MENT TAX. 
(a) IN GENERAL.—Chapter 23 of the Internal Rev-
enue Code of 1986 (relating to Federal Unemployment 
Tax Act) is amended by redesignating section 3311 as sec-
tion 3312 and by inserting after section 3310 the following 
new section: 
‘‘SEC. 3311. STATE COLLECTION OF TAX. 
‘‘(a) IN GENERAL.—At the election of any State 
which is certified as provided in section 3304, each em-
ployer who pays contributions, with respect to any wages, 
into an unemployment fund maintained under the unem-
ployment compensation law of such State shall submit the 
tax imposed by this chapter with respect to such wages 
to such State rather than to the Secretary. 
‘‘(b) COORDINATION WITH DEPOSITARY REQUIRE-
MENTS.—Payment under subsection (a) of the tax im-
posed by this chapter with respect to any wages shall be 
treated as timely paid for purposes of this title if paid 
by the employer to the State at the same time as a timely