Unemployment Insurance Amendments of 1966

(2) The table of sections for such chapter 23 is amended by inserting at the end thereof the folowing:

"Sec. 3310. State law coverage of certain service performed for nonprofit organizations and for State hospitals and institutions of higher education."

(c) Section 3303 of the Internal Revenue Code of 1954 is amended by adding at the end thereof the following new subsection:

"(e) PAYMENTS BY CERTAIN NONPROFIT ORGANIZATIONS.-A State may, without being deemed to violate the standards set forth in subsection (a), permit an organization (or group of organizations) described in section 501 (c) (3) which is exempt from income tax under section 501 (a) to elect (in lieu of paying contributions) to pay into the State unemployment fund amounts equal to the amounts of compensation attributable under the State law to service performed in the employ of such organization (or group)."

(d) The amendments made by subsections (a) and (b) shall apply with respect to certifications of State laws for 1969 and subsequent years, but only with respect to service performed after December 31, 1968. The amendment made by subsection (c) shall take effect January 1, 1967.

STUDENTS ENGAGED IN WORK-STUDY PROGRAMS

SEC. 105. (a) Paragraph (10) of section 3306 (c) of the Internal Revenue Code of 1954 is amended by striking out the semicolon at the end of subparagraph (B) and inserting in lieu thereof ", or" and by adding at the end thereof the following new subparagraph:

"(C) servce performed by an individual who is enrolled at an educational institution (within the meaning of section 151 (e) (4)) as a student in a fulltime program, taken for credit at such insitution, which combines academic instruction with work experience, if such institution has certified to the employer that such service is an integral part of such program;".

(b) The amendment made by subsection (a) shall apply with respect to remuneration paid after December 31, 1966.

PART B-PROVISIONS OF STATE LAWS

PROVISIONS REQUIRED TO BE INCLUDED IN STATE LAWS

SEC. 121. (a) Section 3304 (a) of the Internal Revenue Code of 1954 is amended by inserting after paragraph (6) (added by section 104(a) of this Act) the following new paragraphs:

“(7) an individual who has received compensation during his benefit year is required to have had work since the beginning of such year in order to qualify for compensation in his next benefit year;

"(8) compensation shall not be denied to any individual by reason of cancellation of wage credits or total reduction of his benefit rights for any cause other than discharge for misconduct connected with his work, fraud in connection with a claim for compensation, or receipt of disqualifying income;

"(9) compensation shall not be denied to an individual for any week because he is in training with the approval of the State agency (or because of the application, to any such week in training, of State law provisions relating to availability for work, active search for work, or refusal to accept work);

"(10) compensation shall not be denied or reduced to an individual solely because he files a claim in another State or because he resides in another State at the time he files a claim for unemployment compensation;". (b) The amendment made by subsection (a) shall take effect January 1, 1969, and shall apply to the taxable year 1969 and taxable years thereafter.

ADDITIONAL CREDIT BASED ON REDUCED RATE FOR NEW EMPLOYERS

SEC. 122. (a) Subsection (a) of section 3303 of the Internal Revenue Code of 1954 is amended by striking out "on a 3-year basis," in the sentence following paragraph (3) and inserting in lieu thereof "on a 3-year basis (i)", and by striking out the period at the end of such sentence and inserting in lieu thereof ", or (ii) a reduced rate (not less than 1 percent) may be permitted by the State law on a basis other than as permitted by paragraphs (1), (2), and (3)." (b) The amendments made by subsection (a) shall apply with respect to taxable years beginning after December 31, 1966.

CREDITS ALLOWABLE TO CERTAIN EMPLOYERS

SEC. 123. Section 3305 of the Internal Revenue Code of 1954 is amended by adding at the end thereof the following new subsection:

"(j) DENIAL OF CREDITS IN CERTAIN CASES.-Any person required, pursuant to a permission granted by this section, to make contributions to an unemployment fund under a State unemployment compensation law approved by the Secretary of Labor under section 3304 shall not be entitled to the credits permitted, with respect to the unemployment compensation law of a State, by subsections (a) and (b) of section 3302 against the tax imposed by section 3301 for any taxable year after December 31, 1967, if, on October 31 of such taxable year, the Secretary of Labor certifies to the Secretary his finding, after reasonable notice and opportunity for hearing to the State agency, that the unemployment compensation law of such State is inconsistent with any one or more of the conditions on the basis of which such permission is granted or that, in the application of the State law with respect to the 12-month period ending on such October 31, there has been a substantial failure to comply with any one or more of such conditions. For purposes of section 3311, a finding of the Secretary of Labor under this subsection shall be treated as a finding under section 3304 (c)."

PART C-JUDICIAL REVIEW

JUDICIAL REVIEW

SEC. 131. (a) Title III of the Social Security Act is amended by adding at the end thereof the following new section:

"Judicial Review

"SEC. 304. (a) Whenever the Secretary of Labor

"(1) finds that a State law does not include provisions meeting the requirements of section 303 (a), or

"(2) makes a finding with respect to a State under subsection (b) or (c) of section 303,

such State may, within 60 days after the Governor of the State has been notified of such action, file with the United States court of appeals for the circuit in which such State is located or with the United States Court of Appeals for the District of Columbia a petition for review of such action. A copy of the petition shall be forthwith transmitted by the clerk of the court to the Secretary of Labor. The Secretary of Labor thereupon shall file in the court the record of the proceedings on which he based his action as provided in section 2112 of title 28, United States Code.

"(b) The findings of fact by the Secretary of Labor, unless contrary to the weight of the evidence, shall be conclusive; but the court, for good cause shown, may remand the case to the Secretary of Labor to take further evidence, and the Secretary of Labor may thereupon make new or modified findings of fact and may modify his previous action, and shall certify to the court the record of the further proceedings. Such new or modified findings of fact shall likewise be conclusive unless contrary to the weight of the evidence.

"(c) The court shall have jurisdiction to affirm the action of the Secretary of Labor or to set it aside, in whole or in part. The judgment of the court shall be subject to review by the Supreme Court of the United States upon certiorari or certification as provided in section 1254 of title 28, United States Code.

"(d) (1) The Secretary of Labor shall not withhold any certification for payment to any State under section 302 until the expiration of 60 days after the Governor of the State has been notified of the action referred to in paragraph (1) or (2) of subsection (a) or until the State has filed a petition for review of such action, whichever is earlier.

"(2) The commencement of judicial proceedings under this section shall not stay the Secretary's action, but the court may grant interim relief if warranted, including stay of the Secretary's action and including such relief as may be necessary to preserve status or rights.

"(e) Any judicial proceedings under this section shall be entitled to, and, upon request of the Secretary or the State, shall receive a preference and shall be heard and determined as expeditiously as possible."

(b)(1) Chapter 23 of the Internal Revenue Code of 1954 is amended by adding at the end thereof the following new section:

"SEC. 3311. JUDICIAL REVIEW.

"(a) IN GENERAL.-Whenever under section 3303 (b) or section 3304(c) the Secretary of Labor makes a finding pursuant to which he is required to withhold a certification under such section, such State may, within 60 days after the Governor of the State has been notified of such action, file with the United States court of appeals for the circuit in which such State is located or with the United States Court of Appeals for the District of Columbia a petition for review of such action. A copy of the petition shall be forthwith transmitted by the clerk of the court to the Secretary of Labor. The Secretary of Labor thereupon shall file in the court the record of the proceedings on which he based his action as provided in section 2112 of title 28, United States Code.

"(b) FINDINGS OF FACT.-The findings of fact by the Secretary of Labor, unless contrary to the weight of the evidence, shall be conclusive; but the court, for good cause shown, may remand the case to the Secretary of Labor to take further evidence, and the Secretary of Labor may thereupon make new or modified findings of fact and may modify his previous action, and shall certify to the court the record of the further proceedings. Such new or modified findings of fact shall likewise be conclusive unless contrary to the weight of the evidence.

"(c) JURISDICTION OF COURT; REVIEW.-The court shall have jurisdiction to affirm the action of the Secretary of Labor or to set it aside, in whole or in part. The judgment of the court shall be subject to review by the Supreme Court of the United States upon certiorari or certification as provided in section 1254 of title 28, United States Code.

"(d) STAY OF SECRETARY OF LABOR'S ACTION.

"(1) The Secretary of Labor shall not withhold any certification under section 3303 (b) or section 3304 (c) until the expiration of 60 days after the Governor of the State has been notified of the action referred to in subsection (a) or until the State has filed a petition for review of such action, whichever is earlier.

"(e) PREFERENCE.-Any judicial proceedings under this section shall be entitled to, and, upon request of the Secretary or the State, shall receive a preference and shall be heard and determined as expeditiously as possible."

(2) Subsection (c) of section 3304 of the Internal Revenue Code of 1954 is amended to read as follows:

"(c) CERTIFICATION.-On October 31 of each taxable year the Secretary of Labor shall certify to the Secretary each State whose law he has previously approved, except that he shall not certify any State which, after reasonable notice and opportunity for hearing to the State agency, the Secretary of Labor finds has amended its law so that it no longer contains the provisions specified in subsection (a) or has with respect to the 12-month period ending on such October 31 failed to comply substantially with any such provision. No finding of a failure to comply substantially with the provision in State law specified in paragraph (5) of subsection (a) shall be based on an application or interpretation of State law with respect to which further administrative or judicial review is provided for under the laws of the State. On October 31 of 1969 or of any taxable year thereafter, the Secretary shall not certify any State which, after reasonable notice and opportunity for hearing to the State agency, the Secretary of Labor finds has failed to amend its law so that it contains the provisions specified in subsection (a) added by the Unemployment Insurance Amendments of 1966, or has with respect to the 12-month period (10-month period in the case of October 31, 1969) ending on such October 31 failed to comply substantially with any such provision."

(3) The table of sections for such chapter 23 is amended by adding at the end thereof the following:

"Sec. 3311. Judicial review."

(c) The amendments made by this section shall take effect on the date of the enactment of this Act. In applying section 3304 (c) of the Internal Revenue Code of 1954 (as amended by subsection (b)) with respect to the taxable year 1966, certifications shall be made on December 31, 1966, in lieu of October 31, 1966.

PART D-ADMINISTRATION

AMOUNTS AVAILABLE FOR ADMINISTRATIVE EXPENDITURES

SEC. 141. (a) Section 901(c)(3) of the Social Security Act is amended(1) by striking out "the net receipts" each place it appears in the first sentence and inserting in lieu thereof "five-sixths of the net receipts"; and (2) by striking "0.4 percent" in the second sentence and inserting in lieu thereof "0.6 percent".

(b) The amendments made by subsection (a) shall apply to fiscal years beginning after June 30, 1967.

UNEMPLOYMENT COMPENSATION RESEARCH PROGRAM AND TRAINING GRANTS FOR UNEMPLOYMENT COMPENSATION PERSONNEL

SEC. 142. Title IX of the Social Security Act is amended by adding at the end thereof the following new sections:

"UNEMPLOYMENT COMPENSATION RESEARCH PROGRAM

"SEC. 906. (a) The Secretary of Labor shall

"(1) establish a continuing and comprehensive program of research to evaluate the unemployment compensation system. Such research shall include, but not be limited to, a program of factual studies covering the role of unemployment compensation under varying patterns of unemployment, the relationship between the unemployment compensation and other social insurance programs, the effect of State eligibility and disqualification provisions, the personal characteristics, family situations, employment background and experience of claimants, with the results of such studies to be made public; and

"(2) establish a program of research to develop information (which shall be made public) as to the effect and impact of extending coverage to excluded groups.

"Authorization of Appropriations

"(b) To assist in the establishment and provide for the continuation of the comprehensive research program relating to the unemployment compensation system, there are hereby authorized to be appropriated for the fiscal year ending June 30, 1967, and for each fiscal year thereafter such sums as may be necessary to carry out the purposes of this section. From the sums authorized to be appropriated by this subsection the Secretary may provide for the conduct of such research through grants or contracts.

"TRAINING GRANTS FOR UNEMPLOYMENT COMPENSATION PERSONNEL

"SEC. 907. (a) In order to assist in increasing the effectiveness and efficiency of administration of the unemployment compensation program by increasing the number of adequately trained personnel, there are hereby authorized to be appropriated for the fiscal year ending June 30, 1967, the sum of $1,000,000, and for each fiscal year thereafter such sums as may be necessary for training such personnel.

"(b) (1) From the sums authorized to be appropriated by subsection (a) the Secretary shall provide (A) directly and through State agencies or through grants to or contracts with public or nonprofit private institutions of higher learning, for training personnel who are employed or preparing for employment in the administration of the unemployment compensation program, including claims determinations and adjudication, and (B) directly or through grants to or contracts with public or nonprofit private agencies or institutions, for special courses of study or seminars of short duration (not in excess of one year) for training of such personnel, and (C) directly or through grants to or contracts with public or nonprofit private institutions of higher learning, for establishing and maintaining fellowships for traineeships for such personnel at such institutions, with such stipends and allowances as may be permitted by the Secretary.

"(2) The Secretary may, to the extent he finds such action to be necessary, prescribe requirements to assure that any individual will repay the amounts of his fellowship or traineeship received under this subsection to the extent such individual fails to serve, for the period prescribed by the Secretary, with a 65-99266- -2

State agency or with the Federal Government, in connection with administration of any State employment security program. The Secretary may relieve any individual of his obligation to so repay, in whole or in part, whenever and to the extent that requirement of such repayment would, in his judgment, be inequitable or would be contrary to the purposes of any of the programs established by this section."

USE OF CERTAIN AMOUNTS FOR PAYMENT OF EXPENSES OF ADMINISTRATION

SEC. 143. Section 903 (c) (2) of the Social Security Act (42 U.S.C., sec. 1103 (c) (2)) is amended

(1) by striking out "nine preceding fiscal years," in subparagraph (D) of the first sentence and inserting in lieu thereof "fourteen preceding fiscal years," ;

(2) by striking out "such ten fiscal years" in subparagraph (D) of the first sentence and inserting in lieu thereof "such fifteen fiscal years"; and (3) by striking out "ninth preceding fiscal year" in the second sentence and inserting in lieu thereof "fourteenth preceding fiscal year".

CHANGE IN CERTIFICATION DATE

SEC. 144. (a) Section 3302(a)(1) of the Internal Revenue Code of 1954 is amended by

(1) striking out "for the taxable year" after "certified"; and

(2) inserting before the period at the end thereof the following: "for the 12-month period ending on October 31 of such year".

(b) Section 3302(b) of such Code is amended by—

(1) striking out "for the taxable year" after "certified";

(2) inserting after "section 3303" the following: "for the 12-month period ending on October 31 of such year"; and

(3) striking out "the taxable year" the last place it appears and inserting in lieu thereof "such 12-month period".

"(1) On October 31 of each calendar year, the Secretary of Labor shall certify to the Secretary the law of each State (certified by the Secretary of Labor as provided in section 3304 for the 12-month period on such October 31) with respect to which he finds that reduced rates of contributions were allowable with respect to such 12-month period only in accordance with the provisions of subsection (a)."

(d) Section 3303(b) (2) of such Code is amended by—

(1) striking out "taxable year" where it first appears and inserting in lieu thereof "12-month period ending on October 31";

(2) striking out "on December 31 of such taxable year" following the words "the Secretary of Labor shall" and inserting in lieu thereof "on such October 31"; and

(3) striking out "taxable year" after "contributions were allowable with respect to such" and inserting in lieu thereof "12-month period".

(e) Section 3303 (b) (3) of such Code is amended by-

(1) striking out "taxable year" where it first appears and inserting in

lieu thereof "12-month period ending on October 31";

(2) striking out "taxable year" where it next appears and inserting in lieu thereof "12-month period".

(f) Section 3304(d) of such Code is amended by striking out "If, at any time during the taxable year," and inserting in lieu thereof "If at any time".

(g) Section 3304 of such Code is amended by adding at the end thereof the following new subsection:

"(e) CHANGE OF LAW DURING 12-MONTH PERIOD.-Whenever

"(1) any provision of this section, section 3302, or section 3303 refers to a 12-month period ending on October 31 of a year, and

"(2) the law applicable to one portion of such period differs from the law applicable to another portion of such period,

then such provision shall be applied by taking into account for each such portion the law applicable to such portion."

(h) The amendments made by this section shall apply with respect to the taxable year 1967 and taxable years thereafter.

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Unemployment Insurance Amendments of 1966: Hearings... 89-2, on H.R. 15119 ...