109th CONGRESS
2d Session
H. R. 6274
To amend the Federal Unemployment Tax Act to provide for the establishment
of a demonstration project program to permit States to more properly and
efficiently administer the State's unemployment compensation law, and for
other purposes.
IN THE HOUSE OF REPRESENTATIVES
September 29, 2006
Mr. CHOCOLA (for himself, Mr. SAM JOHNSON of Texas, and Mr. BRADY of Texas)
introduced the following bill; which was referred to the Committee on Ways
and Means
A BILL
To amend the Federal Unemployment Tax Act to provide for the establishment
of a demonstration project program to permit States to more properly and
efficiently administer the State's unemployment compensation law, 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.
This Act may be cited as the `Unemployment Tax Equity Act of 2006'.
SEC. 2. DEMONSTRATION PROGRAM FOR STATE ADMINISTRATION OF UNEMPLOYMENT
COMPENSATION PROGRAM.
(a) In General- Chapter 23 of the Internal Revenue Code of 1986 (26 U.S.C.
3301-3311) is amended--
(1) by redesignating section 3311 as section 3312; and
(2) by inserting after section 3310 the following new section:
`SEC. 3311. DEMONSTRATION PROGRAM FOR STATE ADMINISTRATION OF UNEMPLOYMENT
COMPENSATION PROGRAM.
`(a) In General- The Secretary of Labor shall establish a demonstration
program under which the primary responsibility for the proper and efficient
administration of a State's unemployment compensation law is transferred
(by agreement with the Secretary of Labor) to each participating State for
the duration of the demonstration project under such program. Such agreement
shall contain such terms and conditions as the Secretary of Labor determines
necessary or appropriate to carry out this section.
`(b) Limitation on Number of Participating States- The Secretary of Labor
may not enter into agreements under this section for demonstration projects
under the demonstration program with more than 5 States.
`(1) IN GENERAL- The Governor of any State which desires to enter into
an agreement under this section may submit an application to the Secretary
of Labor at such time, in such manner, and including such information
as the Secretary of Labor may require. Such application shall, at a minimum,
include--
`(A) a description of the demonstration project, including the authorization
under State law for conducting the demonstration project and the time
period during which such demonstration project would be conducted;
`(B) a description of the goals relating to the demonstration project
and the expected programmatic outcomes if the application to participate
in the demonstration project is approved, including how the demonstration
project will assist in meeting the purposes of the demonstration program
described in subsection (a);
`(C) assurances, accompanied by detailed analysis, that the demonstration
project will provide the amount of funding necessary for the proper
and efficient administration of the State's unemployment compensation
law;
`(D) a description of the manner in which the State will conduct an
impact evaluation, using a control or comparison group or other methodology,
of the demonstration project described in subparagraph (A) and determine
whether the goals and outcomes described in subparagraph (B) are achieved;
and
`(E) assurances that the State will provide any reports relating to
the demonstration project as the Secretary may require.
`(A) APPLICATION PROCEDURE- The Secretary of Labor shall provide notice
to each State setting forth the purposes of the demonstration program,
the application requirements, and a due date for the receipt of applications.
`(B) APPROVAL OR DENIAL OF APPLICATION- The Secretary of Labor shall
provide public notice of the decision to approve or deny any application
submitted under this section within 30 days after notifying the State
of such approval or disapproval. Notice under this subparagraph may
be provided through the Internet or other appropriate means.
`(d) Period for Which Demonstration Project Is in Effect-
`(1) IN GENERAL- A demonstration project for which the Secretary of Labor
enters into an agreement with a State under this section shall, except
as provided in paragraphs (2) and (3)--
`(A) be for a period of 5 years,
`(B) not begin before January 1, 2008, and
`(C) terminate before January 1, 2014.
`(2) TERMINATION OF AGREEMENT BY SECRETARY OF LABOR- The Secretary of
Labor may terminate an agreement entered into under this section if the
Secretary determines that the State has not complied with the terms and
conditions specified in such agreement.
`(3) TERMINATION OF AGREEMENT BY STATE- Any State which is a party to
an agreement under this section may, upon providing 30 days written notice
to the Secretary of Labor, terminate such agreement.
`(e) Adjustment of Credit- In the case of credits allowed to a taxpayer
under section 3302 with respect to the unemployment compensation law of
a State for which a demonstration project is in effect under this section,
section 3302 shall be applied--
`(1) in subsection (b) thereof by substituting `5.8%' for `5.4%', and
`(2) in subsection (c)(1) thereof by substituting `96.67 percent' for
`90 percent'.'.
(b) Ineligibility for Grants for Unemployment Compensation Administration-
Section 302 of the Social Security Act (42 U.S.C. 502) is amended by adding
at the end the following new subsection:
`(d) The Secretary of Labor shall make no certification under subsection
(a) for payment to any State with respect to any fiscal year (or portion
of a fiscal year) during which such State is participating in a demonstration
project established under section 3311 of the Internal Revenue Code of 1986.'.
(c) Conforming Amendment- The table of sections for chapter 23 of such Code
is amended by striking the item relating to section 3311 and inserting after
the item relating to section 3310 the following:
`Sec. 3311. Demonstration program for State administration of unemployment
compensation program.
`Sec. 3312. Short title.'.
END
