To provide for a program of temporary enhanced unemployment benefits.

January 7, 2003

Mr. CARDIN (for himself, Mr. RANGEL, and Mr. LEVIN) introduced the following bill; which was referred to the Committee on Ways and Means

To provide for a program of temporary enhanced unemployment 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 `Economic Security Act of 2003'.

SEC. 2. FEDERAL-STATE AGREEMENTS.

(a) IN GENERAL- Any State which desires to do so may enter into and participate in an agreement under this Act with the Secretary of Labor (hereinafter in this Act referred to as the `Secretary'). Any State which is a party to an agreement under this Act may, upon providing 30 days' written notice to the Secretary, terminate such agreement.

(b) PROVISIONS OF AGREEMENT-

(1) IN GENERAL- Any agreement under subsection (a) shall provide that the State agency of the State will make payments of regular compensation to individuals in amounts and to the extent that they would be determined if the State law were applied with the modifications described in paragraph (2).

(2) MODIFICATIONS DESCRIBED- The modifications described in this paragraph are as follows:

(A) In the case of an individual who is not eligible for regular compensation under the State law because of the use of a definition of base period that does not count wages earned in the most recently completed calendar quarter, then eligibility for compensation under this title shall be determined by applying a base period ending at the close of the most recently completed calendar quarter.

(B) In the case of an individual who is not eligible for regular compensation under the State law because such individual does not meet requirements relating to availability for work, active search for work, or refusal to accept work, because such individual is seeking, or is available for, less than full-time work, then compensation under this title shall not be denied by such State to an otherwise eligible individual who seeks less than full-time work or fails to accept full-time work.

(C) The amount of regular compensation (including dependents' allowances) payable for any week shall be equal to the amount determined under the State law (before the application of this subparagraph), plus an additional--

(i) 15 percent; or

(ii) $25,

whichever is greater.

(c) NONREDUCTION RULE- Under the agreement, subsection (b)(2)(C) shall not apply (or shall cease to apply) with respect to a State upon a determination by the Secretary that the method governing the computation of regular compensation under the State law of that State has been modified in a way such that--

(1) the average weekly amount of regular compensation which will be payable during the period of the agreement (determined disregarding the modifications described in subsection (b)(2)) will be less than

(2) the average weekly amount of regular compensation which would otherwise have been payable during such period under the State law, as in effect on September 11, 2001.

(d) COORDINATION RULE- The modifications described in subsection (b)(2) shall also apply in determining the amount of benefits payable under any Federal law to the extent that those benefits are determined by reference to regular compensation payable under the State law of the State involved.

SEC. 3. PAYMENTS TO STATES HAVING AGREEMENTS UNDER THIS ACT.

(a) GENERAL RULE- There shall be paid to each State which has entered into an agreement under this Act an amount equal to--

(1) 100 percent of any regular compensation made payable to individuals by such State by virtue of the modifications which are described in section 2(b)(2) and deemed to be in effect with respect to such State pursuant to section 2(b)(1), and

(2) 100 percent of any regular compensation--

(A) which is paid to individuals by such State by reason of the fact that its State law contains provisions comparable to the modifications described in section 2(b)(2)(A)-(B), but only

(B) to the extent that those amounts would, if such amounts were instead payable by virtue of the State law's being deemed to be so modified pursuant to section 2(b)(1), have been reimbursable under paragraph (1).

(b) DETERMINATION OF AMOUNT- Sums under subsection (a) payable to any State by reason of such State having an agreement under this Act shall be payable, either in advance or by way of reimbursement (as may be determined by the Secretary), in such amounts as the Secretary estimates the State will be entitled to receive under this Act for each calendar month, reduced or increased, as the case may be, by any amount by which the Secretary finds that the Secretary's estimates for any prior calendar month were greater or less than the amounts which should have been paid to the State. Such estimates may be made on the basis of such statistical, sampling, or other method as may be agreed upon by the Secretary and the State agency of the State involved.

(c) ADMINISTRATIVE EXPENSES, ETC- There is hereby appropriated out of the employment security administration account of the Unemployment Trust Fund (as established by section 901(a) of the Social Security Act) $500,000,000 to reimburse States for the costs of the administration of agreements under this Act (including any improvements in technology in connection therewith) and to provide reemployment services to unemployment compensation claimants in States having agreements under this Act. Each State's share of the amount appropriated by the preceding sentence shall be determined by the Secretary according to the factors described in section 302(a) of the Social Security Act and certified by the Secretary to the Secretary of the Treasury.

SEC. 4. FINANCING PROVISIONS.

(a) IN GENERAL- Funds in the extended unemployment compensation account (as established by section 905(a) of the Social Security Act), and the Federal unemployment account (as established by section 904(g) of the Social Security Act), of the Unemployment Trust Fund shall be used, in accordance with subsection (b), for the making of payments (described in section 4(a)) to States having agreements entered into under this Act.

(b) CERTIFICATION- The Secretary shall from time to time certify to the Secretary of the Treasury for payment to each State the sums described in section 4(a) which are payable to such State under this Act. The Secretary of the Treasury, prior to audit or settlement by the General Accounting Office, shall make payments to the State in accordance with such certification by transfers from the extended unemployment compensation account (or, to the extent that there are insufficient funds in that account, from the Federal unemployment account) to the account of such State in the Unemployment Trust Fund.

SEC. 5. DEFINITIONS.

For purposes of this Act:

(1) IN GENERAL- The terms `compensation', `regular compensation', `base period', `State', `State agency', `State law', and `week' have the respective meanings given such terms under section 205 of the Federal-State Extended Unemployment Compensation Act of 1970, subject to paragraph (2).

(2) STATE LAW AND REGULAR COMPENSATION- In the case of a State entering into an agreement under this Act--

(A) `State law' shall be considered to refer to the State law of such State, applied in conformance with the modifications described in section 2(b)(2), subject to section 2(c), and

(B) `regular compensation' shall be considered to refer to such compensation, determined under its State law (applied in the manner described in subparagraph (A)),

except as otherwise provided or where the context clearly indicates otherwise.

SEC. 6. APPLICABILITY.

(a) IN GENERAL- An agreement entered into under this Act shall apply to weeks of unemployment--

(1) beginning after the date on which such agreement is entered into, and

(2) ending before July 1, 2004.

(b) SPECIFIC RULES- Under such an agreement--

(1) the modification described in section 2(b)(2)(A) (relating to alternative base periods) shall not apply except in the case of initial claims filed after September 11, 2001, and

(2) the modifications described in section 2(b)(2)(B)-(C) (relating to part-time employment and increased benefits, respectively) shall apply to weeks of unemployment (described in subsection (a)), irrespective of the date on which an individual's claim for benefits is filed.

SEC. 7. NO REDUCTION IN UNEMPLOYMENT COMPENSATION AS A RESULT OF PENSION ROLLOVERS.

(a) IN GENERAL- Section 3304(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following flush sentence:

`In no event shall paragraph (15) apply in the case of any rollover distribution which is not includable in gross income for the taxable year in which paid.'.

(b) EFFECTIVE DATE-

(1) IN GENERAL- Except as provided in paragraph (2), the amendment made by this section shall apply to compensation paid for weeks of unemployment beginning on or after the date that is 60 days after the date of enactment of the Economic Security Act of 2003.

(2) EXTENSION OF EFFECTIVE DATE FOR STATE LAW AMENDMENT- If the Secretary of Labor determines that a State requires an amendment to State law for that State to meet the requirements imposed under the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note) by the amendment made by this section, the State shall not be regarded as failing to comply with the requirements of such Act solely on the basis of its failure to meet these requirements before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of the session is considered to be a separate regular session of the State legislature.

END