UI Modernization Attachment F

Attachment VI

Text of Sections 2003 and 2004 of Public Law 111-5
SEC. 2003. SPECIAL TRANSFERS FOR UNEMPLOYMENT COMPENSATION
MODERNIZATION.
(a) IN GENERAL.—Section 903 of the Social Security Act (42 U.S.C. 1103) is amended
by adding at the end the following:
‘‘Special Transfers in Fiscal Years 2009, 2010, and 2011
for Modernization
“(f)(1)(A) In addition to any other amounts, the Secretary of Labor shall provide for the
making of unemployment compensation modernization incentive payments (hereinafter
‘incentive payments’) to the accounts of the States in the Unemployment Trust Fund, by
transfer from amounts reserved for that purpose in the Federal unemployment account, in
accordance with succeeding provisions of this subsection.
“(B) The maximum incentive payment allowable under this subsection with
respect to any State shall, as determined by the Secretary of Labor, be equal to the
amount obtained by multiplying $7,000,000,000 by the same ratio as would apply
under subsection (a)(2)(B) for purposes of determining such State’s share of any
excess amount (as described in subsection (a)(1)) that would have been subject to
transfer to State accounts, as of October 1, 2008, under the provisions of
subsection (a).
“(C) Of the maximum incentive payment determined under subparagraph (B) with
respect to a State—
“(i) one-third shall be transferred to the account of such State upon a
certification under paragraph (4)(B) that the State law of such State meets the
requirements of paragraph (2); and
“(ii) the remainder shall be transferred to the account of such State upon a
certification under paragraph (4)(B) that the State law of such State meets the
requirements of paragraph (3).
“(2) The State law of a State meets the requirements of this paragraph if such State law—
“(A) uses a base period that includes the most recently completed calendar quarter
before the start of the benefit year for purposes of determining eligibility for
unemployment compensation; or
“(B) provides that, in the case of an individual who would not otherwise be
eligible for unemployment compensation under the State law because of
the use of a base period that does not include the most recently completed
calendar quarter before the start of the benefit year, eligibility shall be determined
using a base period that includes such calendar quarter.
“(3) The State law of a State meets the requirements of this paragraph if such State law
includes provisions to carry out at least 2 of the following subparagraphs:
“(A) An individual shall not be denied regular unemployment compensation under
any State law provisions relating to availability for work, active search for work,

or refusal to accept work, solely because such individual is seeking only part-time
work (as defined by the Secretary of Labor), except that the State law provisions
carrying out this subparagraph may exclude an individual if a majority of the
weeks of work in such individual’s base period do not include part-time work (as
so defined).
“(B) An individual shall not be disqualified from regular unemployment
compensation for separating from employment if that separation is for any
compelling family reason. For purposes of this subparagraph, the term
‘compelling family reason’ means the following:
‘‘(i) Domestic violence, verified by such reasonable and confidential
documentation as the State law may require, which causes the individual
reasonably to believe that such individual’s continued employment would
jeopardize the safety of the individual or of any member of the individual’s
immediate family (as defined by the Secretary of Labor).
“(ii) The illness or disability of a member of the individual’s immediate
family (as those terms are defined by the Secretary of Labor).
“(iii) The need for the individual to accompany such individual’s spouse—
“(I) to a place from which it is impractical for such individual to
commute; and
“(II) due to a change in location of the spouse’s employment.
“(C)(i) Weekly unemployment compensation is payable under this subparagraph
to any individual who is unemployed (as determined under the State
unemployment compensation law), has exhausted all rights to regular
unemployment compensation under the State law, and is enrolled and making
satisfactory progress in a State-approved training program or in a job training
program authorized under the Workforce Investment Act of 1998, except that
such compensation is not required to be paid to an individual who is receiving
similar stipends or other training allowances for non-training costs.
“(ii) Each State-approved training program or job training program
referred to in clause (i) shall prepare individuals who have been separated
from a declining occupation, or who have been involuntarily and
indefinitely separated from employment as a result of a permanent
reduction of operations at the individual’s place of employment, for entry
into a high-demand occupation.
“(iii) The amount of unemployment compensation payable under this
subparagraph to an individual for a week of unemployment shall be equal
to—
“(I) the individual’s average weekly benefit amount
(including dependents’ allowances) for the most recent benefit
year, less
“(II) any deductible income, as determined
under State law.
“The total amount of unemployment compensation payable under this
subparagraph to any individual shall be equal to at least 26 times the individual’s
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average weekly benefit amount (including dependents’ allowances) for the most
recent benefit year.
“(D) Dependents’ allowances are provided, in the case of any individual who is
entitled to receive regular unemployment compensation and who has any
dependents (as defined by State law), in an amount equal to at least $15 per
dependent per week, subject to any aggregate limitation on such allowances which
the State law may establish (but which aggregate limitation on the total allowance
for dependents paid to an individual may not be less than $50 for each week of
unemployment or 50 percent of the individual’s weekly benefit amount for the
benefit year, whichever is less), except that a State law may provide for a
reasonable reduction in the amount of any such allowance for a week of less than
total unemployment.
“(4)(A) Any State seeking an incentive payment under this subsection shall submit an
application therefor at such time, in such manner, and complete with such information as
the Secretary of Labor may within 60 days after the date of the enactment of this
subsection prescribe (whether by regulation or otherwise), including information relating
to compliance with the requirements of paragraph (2) or (3), as well as how the State
intends to use the incentive payment to improve or strengthen the State’s unemployment
compensation program. The Secretary of Labor shall, within 30 days after receiving a
complete application, notify the State agency of the State of the Secretary’s findings with
respect to the requirements of paragraph (2) or (3) (or both).
“(B)(i) If the Secretary of Labor finds that the State law provisions (disregarding
any State law provisions which are not then currently in effect as permanent law
or which are subject to discontinuation) meet the requirements of paragraph (2) or
(3), as the case may be, the Secretary of Labor shall thereupon make a certification
to that effect to the Secretary of the Treasury, together with a certification as to the
amount of the incentive payment to be transferred to the State account pursuant to
that finding. The Secretary of the Treasury shall make the appropriate transfer
within 7 days after receiving such certification.
“(ii) For purposes of clause (i), State law provisions which are to take
effect within 12 months after the date of their certification under this
subparagraph shall be considered to be in effect as of the date of such
certification.
“(C)(i) No certification of compliance with the requirements of paragraph (2) or
(3) may be made with respect to any State whose State law is not otherwise
eligible for certification under section 303 or approvable under section 3304 of the
Federal Unemployment Tax Act.
“(ii) No certification of compliance with the requirements of paragraph (3)
may be made with respect to any State whose State law is not in
compliance with the requirements of paragraph (2).
(iii) No application under subparagraph (A) may be
considered if submitted before the date of the enactment
of this subsection or after the latest date necessary (as
specified by the Secretary of Labor) to ensure that all in3

centive payments under this subsection are made before
October 1, 2011.
“(5)(A) Except as provided in subparagraph (B), any amount transferred to the account of
a State under this subsection may be used by such State only in the payment of cash
benefits to individuals with respect to their unemployment (including for dependents’
allowances and for unemployment compensation under paragraph (3)(C)), exclusive of
expenses of administration.
“(B) A State may, subject to the same conditions as set forth in subsection (c)(2)
(excluding subparagraph (B) thereof, and deeming the reference to ‘subsections
(a) and (b)’ in subparagraph (D) thereof to include this subsection), use any
amount transferred to the account of such State under this subsection for the
administration of its unemployment compensation law and public employment
offices.
“(6) Out of any money in the Federal unemployment account not otherwise appropriated,
the Secretary of the Treasury shall reserve $7,000,000,000 for incentive payments under
this subsection. Any amount so reserved shall not be taken into account for purposes of
any determination under section 902, 910, or 1203 of the amount in the Federal
unemployment account as of any given time. Any amount so reserved for which the
Secretary of the Treasury has not received a certification under paragraph (4)(B) by the
deadline described in paragraph (4)(C)(iii) shall, upon the close of fiscal year 2011,
become unrestricted as to use as part of the Federal unemployment account.
(7) For purposes of this subsection, the terms ‘benefit year’, ‘base period’, 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).
“Special Transfer in Fiscal Year 2009 for Administration
“(g)(1) In addition to any other amounts, the Secretary of the Treasury shall transfer from the
employment security administration account to the account of each State in the Unemployment
Trust Fund, within 30 days after the date of the enactment of this subsection, the amount
determined with respect to such State under paragraph (2).
“(2) The amount to be transferred under this subsection to a State account shall (as
determined by the Secretary of Labor and certified by such Secretary to the Secretary of
the Treasury) be equal to the amount obtained by multiplying $500,000,000 by the same
ratio as determined under subsection (f)(1)(B) with respect to such State.
“(3) Any amount transferred to the account of a State as a result of the enactment of this
subsection may be used by the State agency of such State only in the payment of expenses
incurred by it for—
“(A) the administration of the provisions of its State law carrying out the purposes
of subsection (f)(2) or any subparagraph of subsection (f)(3);
“(B) improved outreach to individuals who might be eligible for regular
unemployment compensation by virtue of any provisions of the State law which
are described in subparagraph (A);
“(C) the improvement of unemployment benefit and unemployment tax
operations, including responding to increased demand for unemployment
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compensation; and
“(D) staff-assisted reemployment services for unemployment compensation
claimants.’’.
(b) REGULATIONS.—The Secretary of Labor may prescribe any regulations, operating
instructions, or other guidance necessary to carry out the amendment made by subsection (a).
SEC. 2004. TEMPORARY ASSISTANCE FOR STATES WITH ADVANCES.
Section 1202(b) of the Social Security Act (42 U.S.C. 1322(b)) is amended by adding at the end
the following new paragraph:
“(10)(A) With respect to the period beginning on the date of enactment of this paragraph
and ending on December 31, 2010—
“(i) any interest payment otherwise due from a State under this subsection during
such period shall be deemed to have been made by the State; and
“(ii) no interest shall accrue on any advance or advances made under section 1201
to a State during such period.
“(B) The provisions of subparagraph (A) shall have no effect on the requirement for
interest payments under this subsection after the period described in such subparagraph or
on the accrual of interest under this subsection after such period.’’.

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