To provide for additional weeks of temporary extended unemployment compensation, to provide for a program of temporary enhanced unemployment benefits, and for other purposes.

January 30, 2003

Mr. KENNEDY (for himself, Mr. Smith, Mr. Daschle, Mr. Reed, Mr. Durbin, Mr. Sarbanes, Mrs. Clinton, Ms. Cantwell, and Mr. Rockefeller) introduced the following bill; which was read twice and referred to the Committee on Finance

To provide for additional weeks of temporary extended unemployment compensation, to provide for a program of temporary enhanced unemployment benefits, and for other purposes.

Be it enacted by the Senate and House of Representatives 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 `Economic Security Act of 2003'.

(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I--ADDITIONAL WEEKS OF TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION

Sec. 101. Entitlement to additional weeks of temporary extended unemployment compensation.

TITLE II--TEMPORARY ENHANCED UNEMPLOYMENT BENEFITS

Sec. 201. Federal-State agreements.

Sec. 202. Payments to States having agreements under this title.

Sec. 203. Financing provisions.

Sec. 204. Definitions.

Sec. 205. Applicability.

Sec. 206. Coordination with the Temporary Extended Unemployment Compensation Act of 2002.

Sec. 207. Treatment of pension rollovers.

TITLE I--ADDITIONAL WEEKS OF TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION

SEC. 101. ENTITLEMENT TO ADDITIONAL WEEKS OF TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION.

(a) ENTITLEMENT TO ADDITIONAL WEEKS-

(1) IN GENERAL- Paragraph (1) of section 203(b) of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 28) is amended--

(A) in subparagraph (A), by striking `50 percent' and inserting `100 percent'; and

(B) in subparagraph (B), by striking `13 times' and inserting `26 times'.

(2) REPEAL OF RESTRICTION ON AUGMENTATION DURING TRANSITIONAL PERIOD- Section 208(b) of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147), as amended by Public Law 108-1, is amended--

(A) in paragraph (1)--

(i) by striking `paragraphs (2) and (3)' and inserting `paragraph (2)'; and

(ii) by inserting before the period at the end the following: `, including such compensation by reason of amounts deposited in such account after such date pursuant to the application of subsection (c) of such section';

(B) by striking paragraph (2); and

(C) by redesignating paragraph (3) as paragraph (2).

(3) EXTENSION OF TRANSITION LIMITATION- Section 208(b)(2) of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147), as amended by Public Law 108-1 and as redesignated by paragraph (2), is amended by striking `August 30, 2003' and inserting `December 31, 2003'.

(4) CONFORMING AMENDMENT FOR AUGMENTED BENEFITS- Section 203(c)(1) of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 28) is amended by striking `the amount originally established in such account (as determined under subsection (b)(1))' and inserting `7 times the individual's average weekly benefit amount for the benefit year'.

(b) EFFECTIVE DATE AND APPLICATION-

(1) IN GENERAL- The amendments made by subsection (a) shall apply with respect to weeks of unemployment beginning on or after the date of enactment this Act.

(2) TEUC-X AMOUNTS DEPOSITED IN ACCOUNT PRIOR TO DATE OF ENACTMENT DEEMED TO BE THE ADDITIONAL TEUC AMOUNTS PROVIDED BY THIS SECTION- In applying the amendments made by subsection (a) under the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 26), the Secretary of Labor shall deem any amounts deposited into an individual's temporary extended unemployment compensation account by reason of section 203(c) of such Act (commonly known as `TEUC-X amounts') prior to the date of enactment of this Act to be amounts deposited in such account by reason of section 203(b) of such Act, as amended by subsection (a) (commonly known as `TEUC amounts').

(3) APPLICATION TO EXHAUSTEES AND CURRENT BENEFICIARIES-

(A) EXHAUSTEES- In the case of any individual--

(i) to whom any temporary extended unemployment compensation was payable for any week beginning before the date of enactment of this Act; and

(ii) who exhausted such individual's rights to such compensation (by reason of the payment of all amounts in such individual's temporary extended unemployment compensation account) before such date,

such individual's eligibility for any additional weeks of temporary extended unemployment compensation by reason of the amendments made by subsection (a) shall apply with respect to weeks of unemployment beginning on or after the date of enactment of this Act.

(B) CURRENT BENEFICIARIES- In the case of any individual--

(i) to whom any temporary extended unemployment compensation was payable for any week beginning before the date of enactment of this Act; and

(ii) as to whom the condition described in subparagraph (A)(ii) does not apply,

such individual shall be eligible for temporary extended unemployment compensation (in accordance with the provisions of the Temporary Extended Unemployment Compensation Act of 2002, as amended by subsection (a)) with respect to weeks of unemployment beginning on or after the date of enactment of this Act.

(4) REDETERMINATION OF ELIGIBILITY FOR AUGMENTED AMOUNTS FOR INDIVIDUALS FOR WHOM SUCH A DETERMINATION WAS MADE PRIOR TO THE DATE OF ENACTMENT- Any determination of whether the individual's State is in an extended benefit period under section 203(c) of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 28) made prior to the date of enactment of this Act shall be disregarded and the determination under such section shall be made as follows:

(A) INDIVIDUALS WHO EXHAUSTED 13 TEUC AND 13 TEUX-X WEEKS PRIOR TO THE DATE OF ENACTMENT- In the case of an individual who, prior to the date of enactment of this Act, received 26 times the individual's average weekly benefit amount through an account established under section 203 of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 28) (by reason of augmentation under subsection (c) of such section), the determination shall be made as of the date of enactment of this Act.

(B) ALL OTHER INDIVIDUALS- In the case of an individual who is not described in subparagraph (A), the determination shall be made at the time that the individual's account established under such section 203, as amended by subsection (a), is exhausted.

TITLE II--TEMPORARY ENHANCED UNEMPLOYMENT BENEFITS

SEC. 201. FEDERAL-STATE AGREEMENTS.

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

(b) PROVISIONS OF AGREEMENT-

(1) IN GENERAL- Subject to paragraph (3), any agreement under subsection (a) shall provide that the State agency of the State, in addition to any amounts of regular compensation to which an individual may be entitled under the State law, shall make payments of temporary enhanced regular unemployment compensation to an individual in an amount and to the extent that the individual would be entitled to regular compensation 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 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 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 or, as the case may be, compensation under subparagraph (A) (including dependents' allowances) payable for any week shall be increased by an additional--

(i) 15 percent (rounded to the next highest dollar); or

(ii) if greater, $25.

(3) REDUCTION OF AMOUNTS OF REGULAR COMPENSATION AVAILABLE FOR INDIVIDUALS WHO SOUGHT PART-TIME WORK OR FAILED TO ACCEPT FULL-TIME WORK- Any agreement under subsection (a) shall provide that the State agency of the State shall reduce the amount of regular compensation available to an individual who has received temporary enhanced regular unemployment compensation as a result of the application of the modification

described in paragraph (2)(B) by the amount of such temporary enhanced regular unemployment compensation.

(c) 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. 202. PAYMENTS TO STATES HAVING AGREEMENTS UNDER THIS TITLE.

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

(1) 100 percent of any temporary enhanced regular unemployment compensation; and

(2) 100 percent of any regular compensation 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 subparagraphs (A) and (B) of section 201(b)(2), but only 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 201(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 title 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 title 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.

SEC. 203. FINANCING PROVISIONS.

(a) IN GENERAL- Funds in the extended unemployment compensation account (as established by section 905(a) of the Social Security Act (42 U.S.C. 1105(a))), and the Federal unemployment account (as established by section 904(g) of such Act (42 U.S.C. 1104(g))), of the Unemployment Trust Fund (as established by section 904(a) of such Act (42 U.S.C. 1104(a))) shall be used for the making of payments to States having agreements entered into under this title.

(b) CERTIFICATION- The Secretary shall from time to time certify to the Secretary of the Treasury for payment to each State the sums which are payable to such State under this title. 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 (as so established), 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 (as so established).

(c) ASSISTANCE TO STATES- There are appropriated out of the employment security administration account of the Unemployment Trust Fund (as established by section 901(a) of the Social Security Act (42 U.S.C. 1101(a))) $500,000,000 to reimburse States for the costs of the administration of agreements under this title (including any improvements in technology in connection therewith) and to provide reemployment services to unemployment compensation claimants in States having agreements under this title. 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 (42 U.S.C. 502(a)) and certified by the Secretary to the Secretary of the Treasury.

(d) APPROPRIATIONS FOR CERTAIN PAYMENTS- There are appropriated from the general fund of the Treasury, without fiscal year limitation, to the extended unemployment compensation account (as so established) of the Unemployment Trust Fund (as so established) such sums as the Secretary estimates to be necessary to make the payments under this section in respect of--

(1) compensation payable under chapter 85 of title 5, United States Code; and

(2) compensation payable on the basis of services to which section 3309(a)(1) of the Internal Revenue Code of 1986 applies.

Amounts appropriated pursuant to the preceding sentence shall not be required to be repaid.

SEC. 204. DEFINITIONS.

For purposes of this title, the terms `compensation', `base period', `regular compensation', `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.

SEC. 205. APPLICABILITY.

(a) IN GENERAL- Except as provided in subsection (b), an agreement entered into under this title 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) PHASE-OUT OF TERUC-

(1) IN GENERAL- Subject to paragraph (2), in the case of an individual who has established eligibility for temporary enhanced regular unemployment compensation, but who has not exhausted all rights to such compensation, as of the last day of the week ending before July 1, 2004, such compensation shall continue to be payable to such individual for any week beginning after such date for which the individual meets the eligibility requirements of this title.

(2) LIMITATION- No compensation shall be payable by reason of paragraph (1) for any week beginning after December 31, 2004.

SEC. 206. COORDINATION WITH THE TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION ACT OF 2002.

(a) IN GENERAL- The Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 30) is amended--

(1) in section 202(b)(1), by inserting `, and who have exhausted all rights to temporary enhanced regular unemployment compensation' before the semicolon at the end;

(2) in section 202(b)(2), by inserting `, temporary enhanced regular unemployment compensation,' after `regular compensation';

(3) in section 202(c), by inserting `(or, as the case may be, such individual's rights to temporary enhanced regular unemployment compensation)' after `State law' in the matter preceding paragraph (1);

(4) in section 202(c)(1), by inserting `and no payments of temporary enhanced regular unemployment compensation can be made' after `under such law';

(5) in section 202(d)(1), by inserting `plus the amount of any temporary enhanced regular unemployment compensation payable to such individual for such a week,' after `total unemployment';

(6) in section 202(d)(2)(A), by inserting `, or, as the case may be, temporary enhanced regular unemployment compensation,' after `State law';

(7) in section 203(b)(1)(A), by inserting `plus the amount of any temporary enhanced regular unemployment compensation payable to such individual for such week,' after `under such law'; and

(8) in section 203(b)(2), by inserting `plus the amount of any temporary enhanced regular unemployment compensation payable to such individual for such week,' after `total unemployment'.

(b) AMOUNT OF TEUC OFFSET BY AMOUNT OF TERUC- Section 203(b)(1) of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 28) is amended--

(1) in subparagraph (B), by striking the period at the end and inserting a comma; and

(2) by adding at the end the following:

`minus the number of weeks in which the individual was entitled to temporary enhanced regular unemployment compensation as a result of the application of the modification described in section 201(b)(2)(A) of the Economic Security Act of 2003 (relating to the alternative base period) multiplied by the individual's average weekly benefit amount for the benefit year.'.

(c) TEMPORARY ENHANCED REGULAR UNEMPLOYMENT COMPENSATION DEFINED- Section 207 of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 30) is amended to read as follows:

`SEC. 207. DEFINITIONS.

`In this title:

`(1) GENERAL DEFINITIONS- The terms `compensation', `regular compensation', `extended compensation', `additional compensation', `benefit year', `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 (26 U.S.C. 3304 note).

`(2) TEMPORARY ENHANCED REGULAR UNEMPLOYMENT COMPENSATION- The term `temporary enhanced regular unemployment compensation' means temporary enhanced regular unemployment benefits payable under title II of the Economic Security Act of 2003.'.

SEC. 207. TREATMENT OF PENSION ROLLOVERS.

(a) IN GENERAL- Paragraph (15) of section 3304(a) of the Internal Revenue Code of 1986 is amended to read as follows:

`(15)(A) the amount of compensation payable to an individual for any week which begins after March 31, 1980, and which begins in a period with respect to which such individual is receiving a governmental or other pension, retirement or retired pay, annuity, or any other similar periodic payment which is based on the previous work of such individual shall be reduced (but not below zero) by an amount equal to the amount of such pension, retirement or retired pay, annuity, or other payment, which is reasonably attributable to such week except that--

`(i) the requirements of this paragraph shall apply to any pension, retirement or retired pay, annuity, or other similar periodic payment only if--

`(I) such pension, retirement or retired pay, annuity, or similar payment is under a plan maintained (or contributed to) by a base period employer or chargeable employer (as determined under applicable law); and

`(II) in the case of such payment not made under the Social Security Act or the Railroad Retirement Act of 1974 (or the corresponding provisions of prior law), services performed for such employer by the individual after the beginning of the base period (or remuneration for such services) affect eligibility for, or increase the amount of, such pension, retirement or retired pay, annuity, or similar payment; and

`(ii) the State law may provide for limitations on the amount of any such a reduction to take into account contributions made by the individual for the pension, retirement or retired pay, annuity, or other similar periodic payment; and

`(B) the amount of compensation shall not be reduced on account of any pension, retirement or retired pay, annuity, or similar payment which is rolled over into other funds and which is not includible in gross income;'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall be effective for weeks of unemployment beginning at least 1 year after the date of enactment of this Act, except that in the case of a State in which the legislature does not meet in a regularly scheduled session during calendar year 2003, the amendment made by subsection (a) shall apply to weeks of unemployment beginning at least 2 years after the date of enactment of this Act.

END