SUTA Dumping Prevention Act of 2004
PL 108-295 (H.R.3463), enacted 08/09/2004

118 STAT. 1090
PUBLIC LAW 108–295—AUG. 9, 2004
Public Law 108–295
108th Congress
An Act
To amend titles III and IV of the Social Security Act to improve the administration
of unemployment taxes and benefits.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘SUTA Dumping Prevention
Act of 2004’’.
SEC. 2. TRANSFER OF UNEMPLOYMENT EXPERIENCE UPON TRANSFER
OR ACQUISITION OF A BUSINESS.
(a) IN GENERAL.—Section 303 of the Social Security Act (42
U.S.C. 503) is amended by adding at the end the following:
‘‘(k)(1) For purposes of subsection (a), the unemployment com-
pensation law of a State must provide—
‘‘(A) that if an employer transfers its business to another
employer, and both employers are (at the time of transfer)
under substantially common ownership, management, or con-
trol, then the unemployment experience attributable to the
transferred business shall also be transferred to (and combined
with the unemployment experience attributable to) the
employer to whom such business is so transferred,
‘‘(B) that unemployment experience shall not, by virtue
of the transfer of a business, be transferred to the person
acquiring such business if—
‘‘(i) such person is not otherwise an employer at the
time of such acquisition, and
‘‘(ii) the State agency finds that such person acquired
the business solely or primarily for the purpose of obtaining
a lower rate of contributions,
‘‘(C) that unemployment experience shall (or shall not)
be transferred in accordance with such regulations as the Sec-
retary of Labor may prescribe to ensure that higher rates
of contributions are not avoided through the transfer or acquisi-
tion of a business,
‘‘(D) that meaningful civil and criminal penalties are
imposed with respect to—
‘‘(i) persons that knowingly violate or attempt to violate
those provisions of the State law which implement subpara-
graph (A) or (B) or regulations under subparagraph (C),
and
‘‘(ii) persons that knowingly advise another person to
violate those provisions of the State law which implement
SUTA Dumping
Prevention Act
of 2004.
Inter-
governmental
relations.
42 USC 1305
note.
Aug. 9, 2004
[H.R. 3463]
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118 STAT. 1091
PUBLIC LAW 108–295—AUG. 9, 2004
subparagraph (A) or (B) or regulations under subparagraph
(C), and
‘‘(E) for the establishment of procedures to identify the
transfer or acquisition of a business for purposes of this sub-
section.
‘‘(2) For purposes of this subsection—
‘‘(A) the term ‘unemployment experience’, with respect to
any person, refers to such person’s experience with respect
to unemployment or other factors bearing a direct relation
to such person’s unemployment risk;
‘‘(B) the term ‘employer’ means an employer as defined
under the State law;
‘‘(C) the term ‘business’ means a trade or business (or
a part thereof);
‘‘(D) the term ‘contributions’ has the meaning given such
term by section 3306(g) of the Internal Revenue Code of 1986;
‘‘(E) the term ‘knowingly’ means having actual knowledge
of or acting with deliberate ignorance of or reckless disregard
for the prohibition involved; and
‘‘(F) the term ‘person’ has the meaning given such term
by section 7701(a)(1) of the Internal Revenue Code of 1986.’’.
(b) STUDY AND REPORTING REQUIREMENTS.—
(1) STUDY.—The Secretary of Labor shall conduct a study
of the implementation of the provisions of section 303(k) of
the Social Security Act (as added by subsection (a)) to assess
the status and appropriateness of State actions to meet the
requirements of such provisions.
(2) REPORT.—Not later than July 15, 2007, the Secretary
of Labor shall submit to the Congress a report that contains
the findings of the study required by paragraph (1) and rec-
ommendations for any Congressional action that the Secretary
considers necessary to improve the effectiveness of section
303(k) of the Social Security Act.
(c) EFFECTIVE DATE.—The amendment made by subsection (a)
shall, with respect to a State, apply to certifications for payments
(under section 302(a) of the Social Security Act) in rate years
beginning after the end of the 26-week period beginning on the
first day of the first regularly scheduled session of the State legisla-
ture beginning on or after the date of the enactment of this Act.
(d) DEFINITIONS.—For purposes of this section—
(1) the term ‘‘State’’ includes the District of Columbia,
the Commonwealth of Puerto Rico, and the Virgin Islands;
(2) the term ‘‘rate year’’ means the rate year as defined
in the applicable State law; and
(3) the term ‘‘State law’’ means the unemployment com-
pensation law of the State, approved by the Secretary of Labor
under section 3304 of the Internal Revenue Code of 1986.
SEC. 3. USE OF NEW HIRE INFORMATION TO ASSIST IN ADMINISTRA-
TION OF UNEMPLOYMENT COMPENSATION PROGRAMS.
Section 453(j) of the Social Security Act (42 U.S.C. 653(j))
is amended by adding at the end the following:
‘‘(8) INFORMATION COMPARISONS AND DISCLOSURE TO ASSIST
IN
ADMINISTRATION
OF
UNEMPLOYMENT
COMPENSATION
PRO-
GRAMS.—
‘‘(A) IN
GENERAL.—If, for purposes of administering
an unemployment compensation program under Federal
Applicability.
42 USC 503 note.
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118 STAT. 1092
PUBLIC LAW 108–295—AUG. 9, 2004
or State law, a State agency responsible for the administra-
tion of such program transmits to the Secretary the names
and social security account numbers of individuals, the
Secretary shall disclose to such State agency information
on such individuals and their employers maintained in
the National Directory of New Hires, subject to this para-
graph.
‘‘(B) CONDITION ON DISCLOSURE BY THE SECRETARY.—
The Secretary shall make a disclosure under subparagraph
(A) only to the extent that the Secretary determines that
the disclosure would not interfere with the effective oper-
ation of the program under this part.
‘‘(C) USE AND DISCLOSURE OF INFORMATION BY STATE
AGENCIES.—
‘‘(i) IN
GENERAL.—A State agency may not use
or disclose information provided under this paragraph
except for purposes of administering a program
referred to in subparagraph (A).
‘‘(ii) INFORMATION
SECURITY.—The State agency
shall have in effect data security and control policies
that the Secretary finds adequate to ensure the secu-
rity of information obtained under this paragraph and
to ensure that access to such information is restricted
to authorized persons for purposes of authorized uses
and disclosures.
‘‘(iii) PENALTY FOR MISUSE OF INFORMATION.—An
officer or employee of the State agency who fails to
comply with this subparagraph shall be subject to the
sanctions under subsection (l)(2) to the same extent
as if such officer or employee was an officer or employee
of the United States.
‘‘(D) 
PROCEDURAL
REQUIREMENTS.—State 
agencies
requesting information under this paragraph shall adhere
to uniform procedures established by the Secretary gov-
erning information requests and data matching under this
paragraph.
‘‘(E) REIMBURSEMENT
OF
COSTS.—The State agency
shall reimburse the Secretary, in accordance with sub-
section (k)(3), for the costs incurred by the Secretary in
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118 STAT. 1093
PUBLIC LAW 108–295—AUG. 9, 2004
LEGISLATIVE HISTORY—H.R. 3463:
CONGRESSIONAL RECORD, Vol. 150 (2004):
July 14, considered and passed House.
July 22, considered and passed Senate.
furnishing the information requested under this para-
graph.’’.
Approved August 9, 2004.
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