Rate of Insured Unemployment; Covered Employment

(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 unemployement in a benefit year equal to more than 26 times his weekly benefit amount shall be paid an amount equal to 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.

Explanation. The proposed change would add a new section 204 to H.R. 15119. It provides for a 50-percent Federal financing of regular State benefits beyond 26 times a worker's weekly benefit amount but not to exceed 39 times such weekly benefit amount. The option of providing such benefits, however, is left to the States. A State may require that to be eligible for such benefits an individual must have had in his base period such additional employment or wages, or both, as is specified in the State law. A State may also require, with respect to such benefits, that an individual who, without good cause, refuses to take training to which he is referred by the State agency, or leaves such training, or is terminated for cause shall be disqualified.

PAYMENTS TO STATES

Amount Payable

Amendment.-SEC. [204] 205 (a) [(1)] There shall be paid to each State an amount equal to [one-half of the sum of—

(A)](1) the [sharable] extended compensation, and

[B)](2) one-half the [sharable] 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 [sub] section in respect of compensation for which the State is entitled to reimbursement under the provisions of any Federal law other than this Act.

[SHARABLE EXTENDED COMPENSATION

[(b) For purposes of subsection (a)(1)(A), extended compensation paid to an individual for weeks of unemployment in such individual's eligibility period is sharable extended compensation to the extent that the aggregate extended compensation paid to such individual with respect to any benefit year does not exceed the smallest of the amounts referred to in subparagraphs (A), (B), and (C) of section 202(d)(1).

[SHARABLE REGULAR COMPENSATION

[(c) For purposes of subsection (a)(1)(B), regular compensation paid to an individual for a week of unemployment is sharable regular compensation

[(1) if such week is in such individual's eligibility period (determined under section 203 (c)), and

[(2) to the extent that the sum of such compensation, plus the regular compensation paid (or deemed paid) to him with respect to prior weeks of unemployment in the benefit year, exceeds twenty-six times (and does not exceed thirty-nine times) the average weekly benefit amount (including allowances for dependents) for weeks of total unemployment payable to such individual under the State law in such benefit year.]

Explanation. The proposed changes to section 204 of H.R. 15119 (redesignated sec. 205) are designed to reflect the 100-percent Federal financing of benefits paid during periods of high unemployment and the 50-percent Federal financing of regular State benefits beyond 26 times a worker's weekly benefit amount but not to exceed 39 times such weekly benefit amount.

PAYMENT ON CALENDAR MONTH BASIS

[(d)] (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

[(e)] (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. [205] 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

Amendments. SEC. [206] 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] 1967 and each month thereafter), from the employment security administration account to the extended unemployment compensation account established by subsection (a), an amount determined by him to be equal to [16% per centum] threeelevenths (except for 1968) of the amount by which

"(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."

Explanation. The proposed changes are designed to adjust the distribution of net FUTA revenue between administrative costs and long-duration benefit costs in accordance with the changes in the tax rate and taxable wage base.

For the taxable year 1967, the Federal tax rate and the distribution of the revenue will be the same as provided in H.R. 15119 for that year and succeeding years. That is, the Federal tax rate will be 3.3 percent, and the net rate will be 0.6 percent; of this amount, 0.1 percent, or one-sixth of collections during calendar year 1968, is earmarked for financing the programs of benefits for long-duration unemployment. The other five-sixths of the net receipts are available for Federal and State administrative expenses of the employment security program.

For the taxable years beginning with 1968, however, the increase in the taxable wage base permits a decrease in the Federal tax rate to 3.25 percent and a decrease in the amount earmarked for administration to 0.4 percent. Thus, beginning with January 1969, threeelevenths of the net Federal collections is to be transferred to the extended benefit account, and the ceiling on administrative grants to the States is to be computed on the basis of eight-elevenths of net receipts.

Amendment."(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) [$500,000,000 $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 [twotenths] 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." Explanation. This proposed change increases the ceiling on the extended unemployment compensation account by doubling the requirements in H.R. 15119. The provision for higher ceiling is necessary in view of the provision for full Federal financing of extended benefits during extended benefit periods and shared Federal financing of regular State benefits for weeks 27 through 39.

"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 [204(e)] 205 of the Federal-State 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