HR 2806 IHCommentsClose CommentsPermalink

To reform the Federal unemployment benefits system, and for other purposes.CommentsClose CommentsPermalink

June 21, 2007

Mr. ENGLISH of Pennsylvania (for himself, Mr. MCCOTTER, Mrs. CAPITO, and Mr. GERLACH) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Education and Labor, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink

To reform the Federal unemployment benefits system, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `Safety Net Enhancement Act'.CommentsClose CommentsPermalink





(b) Table of Contents- The table of contents is as follows:CommentsClose CommentsPermalink





Sec. 1. Short title; table of contents.CommentsClose CommentsPermalink

TITLE I--ADMINISTRATIVE REFORMS

Sec. 101. Extended benefits trigger.CommentsClose CommentsPermalink





Sec. 102. Increase and decrease in earnings credited to State accounts when States meet or fail to meet funding goals.CommentsClose CommentsPermalink





Sec. 103. Interest-free advances to State accounts in Unemployment Trust Fund restricted to States which meet funding goals.CommentsClose CommentsPermalink





Sec. 104. State collection of Federal unemployment tax.CommentsClose CommentsPermalink





Sec. 105. Required distribution of State-specific information packets.CommentsClose CommentsPermalink

TITLE II--REPEAL OF TAX ON UNEMPLOYMENT COMPENSATION

Sec. 201. Repeal of tax on unemployment compensation.CommentsClose CommentsPermalink

TITLE III--SAFETY NET REVIEW COMMISSION

Sec. 301. Establishment.CommentsClose CommentsPermalink





Sec. 302. Function.CommentsClose CommentsPermalink





Sec. 303. Members.CommentsClose CommentsPermalink





Sec. 304. Staff and other assistance.CommentsClose CommentsPermalink





Sec. 305. Compensation.CommentsClose CommentsPermalink





Sec. 306. Report.CommentsClose CommentsPermalink





Sec. 307. Termination.CommentsClose CommentsPermalink

TITLE I--ADMINISTRATIVE REFORMS

SEC. 101. EXTENDED BENEFITS TRIGGER.

(a) In General- Section 203(d) of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note) is amended--CommentsClose CommentsPermalink





(1) in subparagraph (B) of paragraph (1), by striking `5 per centum' and inserting `4 per centum', andCommentsClose CommentsPermalink





(2) in the first flush sentence following paragraph (2), by striking `5' and inserting `4'.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by subsection (a) shall apply to weeks of unemployment beginning 6 months or more after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 102. INCREASE AND DECREASE IN EARNINGS CREDITED 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:CommentsClose CommentsPermalink





`(h) Increase and Decrease in Amount of Earnings Allocated to State Accounts When States Meet or Fail To Meet Funding Goals- (1) If the average daily balance in a State account in the Unemployment Trust Fund for any calendar quarter exceeds the funding goal of such State, the amount otherwise creditable to such account under subsection (e) for such quarter shall be increased by the interest 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.CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(3) For purposes of this subsection, the term `interest premium' means, for any calendar quarter--CommentsClose CommentsPermalink





`(A) with respect to the State with the largest percentage value of excess of the average daily balance 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 excess, andCommentsClose CommentsPermalink





`(B) with respect to each other State, the product of--CommentsClose CommentsPermalink





`(i) the amount of the excess of the average daily balance in the State account in the Unemployment Trust Fund over the funding goal of such State, andCommentsClose CommentsPermalink





`(ii) the percentage which bears the same ratio to one-half of one percent as--CommentsClose CommentsPermalink





`(I) the percentage value of such excess, bears toCommentsClose CommentsPermalink





`(II) the percentage value of the excess of the State referred to in subparagraph (A).CommentsClose CommentsPermalink





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 aggregate interest penalties for such quarter.CommentsClose CommentsPermalink





`(4) For purposes of this subsection, the term `interest penalty' means, for any calendar quarter--CommentsClose CommentsPermalink





`(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), andCommentsClose CommentsPermalink





`(B) with respect to each other State, the product of--CommentsClose CommentsPermalink





`(i) the amount otherwise creditable to such account under subsection (e), andCommentsClose CommentsPermalink





`(ii) the percentage which bears the same ratio to one-half of one percent as--CommentsClose CommentsPermalink





`(I) the percentage value of the excess of the funding goal of the State over such average daily balance of such State, bears toCommentsClose CommentsPermalink





`(II) the percentage value of such excess of the State referred to in subparagraph (A).CommentsClose CommentsPermalink





`(5) For purposes of this subsection, the term `funding 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 calendar quarter, during which the State paid the greatest amount of unemployment benefits.CommentsClose CommentsPermalink





`(6) For purposes of this subsection, the term `percentage value' means--CommentsClose CommentsPermalink





`(A) with respect to any excess of the average daily balance in a State account in the Unemployment Trust Fund over the funding goal of such State, the percentage which such excess bears to such funding goal, andCommentsClose CommentsPermalink





`(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.'.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) AMOUNTS CREDITED TO STATE ACCOUNTS- Subsection (e) of section 904 of the Social Security Act (42 U.S.C. 1104(e)) is amended in the first sentence by inserting `(as modified by subsection (h))' after `a proportionate part'.CommentsClose CommentsPermalink





(2) INTEREST RATE ON REPAYMENT OF ADVANCES DETERMINED WITHOUT REGARD TO INTEREST PREMIUMS OR PENALTIES ON AMOUNTS CREDITED 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'.CommentsClose CommentsPermalink





(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 subsection (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.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to calendar years beginning after December 31, 2010.CommentsClose CommentsPermalink

SEC. 103. INTEREST-FREE ADVANCES TO STATE ACCOUNTS IN UNEMPLOYMENT TRUST FUND RESTRICTED TO STATES WHICH MEET FUNDING GOALS.

(a) In General- Subparagraph (C) of section 1202(b)(2) of the Social Security Act (42 U.S.C. 1322(b)(2)) is amended to read as follows:CommentsClose CommentsPermalink





`(C) the average daily balance in the account of such State in the Unemployment Trust Fund for each of 4 of the 5 calendar quarters preceding the calendar quarter in which such advances were made exceeds the funding goal of such State (as defined in section 904(h)).'CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by subsection (a) shall apply to calendar years beginning after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 104. STATE COLLECTION OF FEDERAL UNEMPLOYMENT TAX.

(a) In General- Chapter 23 of the Internal Revenue Code of 1986 (relating to Federal Unemployment Tax Act) is amended by redesignating section 3311 as section 3312 and by inserting after section 3310 the following new section:CommentsClose CommentsPermalink

`SEC. 3311. STATE COLLECTION OF TAX.

`(a) In General- At the election of any State which is certified as provided in section 3304, each employer who pays contributions, with respect to any wages, into an unemployment fund maintained under the unemployment 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.CommentsClose CommentsPermalink





`(b) Coordination With Depositary Requirements- Payment under subsection (a) of the tax imposed 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 paid payment, with respect to such wages, of contributions into an unemployment fund maintained under the unemployment compensation law of such State.CommentsClose CommentsPermalink





`(c) Exception for Payments Not Timely Paid- Subsection (a) shall not apply to any payment of the tax imposed by this chapter which is not paid by an employer on or before the last date on which such payment would be treated as timely paid under subsection (b).CommentsClose CommentsPermalink





`(d) Federal Tax Transferred to Secretary- Each State making an election under subsection (a) shall transmit to the Secretary, at the time and in the manner prescribed by the Secretary, the amount of the tax imposed by this chapter which is submitted to such State under subsection (a) and a copy of the State tax return of each employer making such a submission. The Secretary may, after consultation with such organizations or other entities as the Secretary considers appropriate, prescribe regulations requiring that additional information be submitted by such State with respect to the amount of such tax payable by such employer.'.CommentsClose CommentsPermalink





(b) Clerical Amendment- The table of sections for chapter 23 of such Code is amended by striking the item relating to section 3311 and inserting the following new items:CommentsClose CommentsPermalink





`Sec. 3311. State collection of tax.CommentsClose CommentsPermalink





`Sec. 3312. Short title.'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2007.CommentsClose CommentsPermalink

SEC. 105. REQUIRED DISTRIBUTION OF STATE-SPECIFIC INFORMATION PACKETS.

(a) In General- Subsection (a) of section 3304 of the Internal Revenue Code of 1986 (relating to approval of State laws) is amended by striking `and' at the end of paragraph (18), by striking the period at the end of paragraph (19) and inserting `; and', and by adding at the end the following new paragraph:CommentsClose CommentsPermalink





`(20) the State will distribute to unemployed individuals State-specific information packets explaining unemployment insurance eligibility conditions.'.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by subsection (a) shall apply to certifications of States for 2008 and thereafter, except that section 3304(a)(20) of the Internal Revenue Code of 1986, as added by subsection (a), shall not be a requirement for the State law of any State prior to July 1, 2009, if the legislature of such State does not meet in a regular session which closes during the calendar year 2008.CommentsClose CommentsPermalink

TITLE II--REPEAL OF TAX ON UNEMPLOYMENT COMPENSATION

SEC. 201. REPEAL OF TAX ON UNEMPLOYMENT COMPENSATION.

(a) In General- Section 85 of the Internal Revenue Code of 1986 is hereby repealed.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Subsection (p) of section 3402 of such Code is amended by striking paragraph (2) and by redesignating paragraph (3) as paragraph (2).CommentsClose CommentsPermalink





(2) Section 6050B of such Code (relating to returns relating to unemployment compensation) is hereby repealed.CommentsClose CommentsPermalink





(3) The table of sections for part II of subchapter B of chapter 1 of such Code is amended by striking the item relating to section 85.CommentsClose CommentsPermalink





(4) The table of sections for subpart B of part III of subchapter A of chapter 61 of such Code is amended by striking the item relating to section 6050B.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to amounts received after December 31, 2007.CommentsClose CommentsPermalink

TITLE III--SAFETY NET REVIEW COMMISSION

SEC. 301. ESTABLISHMENT.

The Secretary of Labor shall establish an advisory commission to be known as the `Safety Net Review Commission' (hereinafter in this title referred to as the `Commission').CommentsClose CommentsPermalink

SEC. 302. FUNCTION.

It shall be the function of the Commission to evaluate the unemployment compensation program, the Trade Adjustment Assistance program, the Job Corps program, a program under the Workforce Investment Act, and other employment assistance programs, including the purpose, goals, countercyclical effectiveness, coverage, benefit adequacy, trust fund solvency, funding of State administrative costs, administrative efficiency, and any other aspects of each such program, as well as any related provisions of the Internal Revenue Code of 1986, and to make recommendations for their improvement.CommentsClose CommentsPermalink

SEC. 303. MEMBERS.

(a) In General- The Commission shall consist of 11 members as follows:CommentsClose CommentsPermalink





(1) 5 members appointed by the President, to include representatives of business, labor, State government, and the public.CommentsClose CommentsPermalink





(2) 3 members appointed by the President pro tempore of the Senate, in consultation with the Chairman and ranking member of the Committee on Finance of the Senate.CommentsClose CommentsPermalink





(3) 3 members appointed by the Speaker of the House of Representatives, in consultation with the Chairman and ranking member of the Committee on Ways and Means of the House of Representatives.CommentsClose CommentsPermalink





(b) Qualifications- In appointing members under paragraphs (2) and (3) of subsection (a), the President pro tempore of the Senate and the Speaker of the House of Representatives shall each appoint--CommentsClose CommentsPermalink





(1) 1 representative of the interests of business,CommentsClose CommentsPermalink





(2) 1 representative of the interests of labor, andCommentsClose CommentsPermalink





(3) 1 representative of the interests of State governments.CommentsClose CommentsPermalink





(c) Vacancies- A vacancy in the Commission shall be filled in the manner in which the original appointment was made.CommentsClose CommentsPermalink





(d) Chairman- The President shall appoint the Chairman of the Commission from among its members.CommentsClose CommentsPermalink

SEC. 304. STAFF AND OTHER ASSISTANCE.

(a) In General- The Commission may engage any technical assistance (including actuarial services) required by the Commission to carry out its functions under this title.CommentsClose CommentsPermalink





(b) Assistance From Secretary of Labor- The Secretary of Labor shall provide the Commission with any staff, office facilities, and other assistance, and any data prepared by the Department of Labor, required by the Commission to carry out its functions under this title.CommentsClose CommentsPermalink

SEC. 305. COMPENSATION.

Each member of the Commission--CommentsClose CommentsPermalink





(1) shall be entitled to receive compensation at the rate of pay for level V of the Executive Schedule under section 5316 of title 5, United States Code, for each day (including travel time) during which such member is engaged in the actual performance of duties vested in the Commission; andCommentsClose CommentsPermalink





(2) while engaged in the performance of such duties away from such member's home or regular place of business, shall be allowed travel expenses (including per diem in lieu of subsistence) as authorized by section 5703 of such title 5 for persons in the Government employed intermittently.CommentsClose CommentsPermalink

SEC. 306. REPORT.

Not later than 6 months after the date of the enactment of this Act, the Commission shall submit to the President and the Congress a report setting forth the findings and recommendations of the Commission as a result of its evaluation under this title.CommentsClose CommentsPermalink

SEC. 307. TERMINATION.

The Commission shall terminate 2 months after submitting its report pursuant to section 306.CommentsClose CommentsPermalink