(f) (1) For purposes of subsections (d) and (e), the term "rate of insured unemployment" means the percentage arrived at by dividing—

(A) the average weekly number of individuals filing claims for weeks of unemployment with respect to the specified period, as determined on the basis of the reports made by all State agencies (or, in the case of subsection (e), by the State agency) to the Secretary, by

(B) the average monthly covered employment for the specified period.

(2) Determinations under subsection (d) shall be made by the Secretary in accordance with regulations prescribed by him.

(3) Determinations under subsection (e) shall be made by the State agency in accordance with regulations prescribed by the Secretary.

COMPENSATION FOR LONG-TERM UNEMPLOYED

SEC. 204. (a) Any State which provides regular compensation for an individual for weeks of unemployment in a benefit year equal to more than 26 times his weekly benefit amount shall be paid an amount equal to 1⁄2 the compensation paid to each such individual in excess of 26 times his weekly benefit amount but in no event more than 39 times his weekly benefit amount.

SPECIAL ELIGIBILITY REQUIREMENTS

(b) (1) The State law may provide that to be eligible for regular compensation in excess of 26 times his weekly benefit amount an individual must have had such additional employment or wages, or both, in his base period as is specified in such law.

(2) The State law may provide that if, without good cause, an individual refuses to take training to which he is referred by the State agency or leaves training to which he has been referred, or if he is terminated with cause, he shall be disqualified from receiving regular compensation in excess of 26 times his weekly benefit amount for a period of from 1 to 13 weeks from the date of refusal, leaving, or termination, as the case may be.

PAYMENTS TO STATES

Amount Payable

SEC. 205. (a) There shall be paid to each State an amount equal to the sum of

(1) the extended compensation, and

(2) one-half the regular compensation as provided by section 204(a) paid to individuals under the State law.

(b) No payment shall be made to any State under this section in respect of compensation for which the State is entitled to reimbursement under the provisions of any Federal law other than this Act.

Payment on Calendar Month Basis

(c) There shall be paid to each State either in advance or by way of reimbursement, as may be determined by the Secretary, such sum 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 sum by which the Secretary finds that his 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 upon the basis of such statistical, sampling, or other method as may be agreed upon by the Secretary and the State agency.

Certification

(d) The Secretary shall from time to time certify to the Secretary of the Treasury for payment to each State the sums payable to such State under this section. The Secretary of the Treasury, prior to audit or settlement by the General Accounting Office, shall make payment to the State in accordance with such certification, by transfers from the extended unemployment compensation account to the account of such State in the unemployment trust fund.

DEFINITIONS

SEC. 206. For purposes of this title

(1) The term "compensation" means cash benefits payable to individuals with respect to their unemployment.

(2) The term "regular compensation" means compensation payable to an individual under any State unemployment compensation law (including compensation payable pursuant to title XV of the Social Security Act), other than extended compensation and additional compensation.

(3) The term "extended compensation" means compensation (including additional compensation and compensation payable pursuant to title XV of the Social Security Act) payable for weeks of unemployment beginning in an extended benefit period to an individual under those provisions of the State law which satisfy the requirements of this title with respect to the payment of extended compensation.

(4) The term "additional compensation" means compensation. payable to exhaustees by reason of conditions of high unemployment or by reason of other special factors.

(5) The term "benefit year" means the benefit year as defined in the applicable State law.

(6) The term "base period" means the base period as determined under applicable State law for the benefit year.

(7) The term "Secretary" means the Secretary of Labor of the United States.

(8) The term "State" includes the District of Columbia and the Commonwealth of Puerto Rico.

(9) The term "State agency" means the agency of the State which administers its State law.

(10) The term "State law" means the unemployment compensation law of the State, approved by the Secretary under section 3304 of the Internal Revenue Code of 1954.

(11) The term "week" means a week as defined in the applicable State law.

EXTENDED UNEMPLOYMENT COMPENSATION ACCOUNT

SEC. 207. (a) Title IX of the Social Security Act is amended by striking out section 905 and inserting in lieu thereof the following new section:

"EXTENDED UNEMPLOYMENT COMPENSATION

ACCOUNT

"ESTABLISHMENT OF ACCOUNT

"SEC. 905. (a) There is hereby established in the Unemployment Trust Fund an extended unemployment compensation account. For the purposes provided for in section 904 (e), such account shall be maintained as a separate book account:

"Transfers to Account

"(b) (1) The Secretary of the Treasury shall transfer (as of the close of January 1968, and each month thereafter), from the employment security administration account to the extended unemployment compensation account established by subsection (a), an determined by him to be equal three-elevenths (except for 1968) of the amount by which

amount

"(A) transfers to the employment security administration account pursuant to section 901 (b)(2) during such month, exceed "(B) payments during such month from the employment security administration account pursuant to section 901 (b) (3) and (d). The amount of transfer determined by the Secretary for each month of 1968 shall be equal to one-sixth of the amount by which transfers under paragraph (A) exceed payments under paragraph (B).

If for any such month the payments referred to in subparagraph (B) exceed the transfers referred to in subparagraph (A), proper adjustments shall be made in the amounts subsequently transferred.

"(2) Whenever the Secretary of the Treasury determines pursuant to section 901 (f) that there is an excess in the employment security administration account as of the close of any fiscal year beginning after June 30, 1967, there shall be transferred (as of the beginning of the succeeding fiscal year) to the extended unemployment compensation account the total amount of such excess or so much thereof as is required to increase the amount in the extended unemployment compensation account to whichever of the following is the greater: "(A) $1,000,000,000, or

"(B) the amount (determined by the Secretary of Labor and certified by him to the Secretary of the Treasury) equal to four-tenths of 1 per centum of the total wages subject (determined without any limitation on amount) to contributions under all State unemployment compensation laws for the calendar year ending during the fiscal year for which the excess is determined.

"Transfers to State Accounts

"(c) Amounts in the extended unemployment compensation fund shall be available for transfer to the accounts of the States in the

unemployment trust fund as provided by section 205(e) of the FederalState Extended Unemployment Compensation Act of 1966.

"Transfers to Federal Unemployment Account

"(d) If the balance in the extended unemployment compensation account as of the close of any fiscal year exceeds the greater of the amounts referred to in subparagraphs (A) and (B) of subsection (b) (2), the Secretary of the Treasury shall transfer (as of the close of such fiscal year) from such account to the Federal unemployment account an amount equal to such excess. In applying section 902(b), any amount transferred pursuant to this subsection as of the close of any fiscal year shall be treated as an amount in the Federal unemployment account as of the close of such fiscal year.

"Advances to Extended Unemployment Compensation Account

"(e) There are hereby authorized to be appropriated to the extended unemployment compensation account, as repayable advances (without interest), such sums as may be necessary to provide for the transfers referred to in subsection (c)."

(b) (1) Section 901 (f)(3) of the Social Security Act is amended by striking out "to the Federal unemployment account" and inserting in lieu thereof "to the extended unemployment compensation account, to the Federal unemployment account, or both,".

(2) Section 902(a) of such Act is amended by striking out "the total amount of such excess" and inserting in lieu thereof "the portion of such excess remaining after the application of section 905(b) (2)”.

(3) The second sentence of section 1203 of such Act is amended to read as follows: "Whenever, after the application of section 901(f) (3) with respect to the excess in the employment security administration account as of the close of any fiscal year, there remains any portion of such excess, so much of such remainder as does not exceed the balances of advances made pursuant to section 905(e) or this section shall be transferred to the general fund of the Treasury and shall be credited against, and shall operate to reduce, first the balance of advances under section 905(e) and then the balance of advances under this section."

APPROVAL OF STATE LAWS

SEC. 208. Section 3304 (a) of the Internal Revenue Code of 1954 is amended by inserting after paragraph (10) (added by section 121(a) of this Act) the following new paragraph:

"(11) extended compensation shall be payable as provided by the Federal-State Extended Unemployment Compensation Act of 1966; and".

EFFECTIVE DATES

SEC. 209. (a) In applying section 203, no extended benefit period may begin with a week beginning before January 1, 1969.

(b) Sections 204 and 205 shall apply with respect to weeks of unemployment beginning after December 31, 1968.

(c) The amendment made by section 208 shall apply to the taxable year 1969 and taxable years thereafter.

TITLE III-FINANCING

INCREASE IN TAX RATE

SEC. 301. (a) Section 3301 of the Internal Revenue Code of 1954 (relating to rate of tax under Federal Unemployment Tax Act) is amended

(1) by striking out "1961" and inserting in lieu thereof "1968", (2) by striking out "3.1 percent" in the first sentence and inserting in lieu thereof "3.25 percent", and

(3) by striking out the last two sentences, and substituting therefor the following:

"In the case of wages paid during the calendar year 1967, the rate of such tax shall be 3.3 percent in lieu of 3.1 percent.' (b) The amendments made by subsection (a) shall apply with respect to the calendar year 1967 and calendar years thereafter.

INCREASE IN WAGE BASE

SEC. 302. (a) Effective with respect to remuneration paid after December 31, 1967, section 3306(b)(1) of the Internal Revenue Code of 1954 is amended by striking out "$3,000" each place it appears and inserting in lieu thereof "$5,600".

(b) Effective with respect to remuneration paid after December 31, 1970, section 3306(b)(1) of such Code (as amended by subsection (a)) is amended by striking out "$5,600" each place it appears and inserting in lieu thereof "$6,600".