26 U.S.C. § 3304 — Approval of State laws

Page 2773 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘(3) such organization made such an election before the earlier of— ‘‘(A) the date 18 months after such election was first available to it under the State law, or ‘‘(B) January 1, 1984, then [former] section 3303(f) of such Code shall be ap- plied with respect to such organization as if it did not contain the requirement that the election be made be- fore April 1, 1972, and by substituting ‘January 1, 1982’ for ‘January 1, 1969’.’’ § 3304. Approval of State laws (a) Requirements The Secretary of Labor shall approve any State law submitted to him, within 30 days of such submission, which he finds provides that— (1) all compensation is to be paid through public employment offices or such other agen- cies as the Secretary of Labor may approve; (2) no compensation shall be payable with respect to any day of unemployment occurring within 2 years after the first day of the first period with respect to which contributions are required; (3) all money received in the unemployment fund shall (except for refunds of sums erro- neously paid into such fund and except for re- funds paid in accordance with the provisions of section 3305(b)) immediately upon such re- ceipt be paid over to the Secretary of the Treasury to the credit of the Unemployment Trust Fund established by section 904 of the Social Security Act (42 U.S.C. 1104); (4) all money withdrawn from the unemploy- ment fund of the State shall be used solely in the payment of unemployment compensation, exclusive of expenses of administration, and for refunds of sums erroneously paid into such fund and refunds paid in accordance with the provisions of section 3305(b); except that— (A) an amount equal to the amount of em- ployee payments into the unemployment fund of a State may be used in the payment of cash benefits to individuals with respect to their disability, exclusive of expenses of administration; (B) the amounts specified by section 903 (c)(2) or 903(d)(4) of the Social Security Act may, subject to the conditions prescribed in such section, be used for expenses incurred by the State for administration of its unem- ployment compensation law and public em- ployment offices; (C) nothing in this paragraph shall be con- strued to prohibit deducting an amount from unemployment compensation otherwise pay- able to an individual and using the amount so deducted to pay for health insurance, or the withholding of Federal, State, or local individual income tax, if the individual elected to have such deduction made and such deduction was made under a program approved by the Secretary of Labor; (D) amounts shall be deducted from unem- ployment benefits and used to repay over- payments as provided in section 303(g) of the Social Security Act; (E) amounts may be withdrawn for the payment of short-time compensation under a short-time compensation program (as de- fined under section 3306(v)); (F) amounts may be withdrawn for the payment of allowances under a self-employ- ment assistance program (as defined in sec- tion 3306(t)); and (G) with respect to amounts of covered un- employment compensation debt (as defined in section 6402(f)(4)) collected under section 6402(f)— (i) amounts may be deducted to pay any fees authorized under such section; and (ii) the penalties and interest described in section 6402(f)(4)(C) may be transferred to the appropriate State fund into which the State would have deposited such amounts had the person owing the debt paid such amounts directly to the State; (5) compensation shall not be denied in such State to any otherwise eligible individual for refusing to accept new work under any of the following conditions: (A) if the position offered is vacant due di- rectly to a strike, lockout, or other labor dispute; (B) if the wages, hours, or other conditions of the work offered are substantially less fa- vorable to the individual than those pre- vailing for similar work in the locality; (C) if as a condition of being employed the individual would be required to join a com- pany union or to resign from or refrain from joining any bona fide labor organization; (6)(A) compensation is payable on the basis of service to which section 3309(a)(1) applies, in the same amount, on the same terms, and sub- ject to the same conditions as compensation payable on the basis of other service subject to such law; except that— (i) with respect to services in an instruc- tional, research, or principal administrative capacity for an educational institution to which section 3309(a)(1) applies, compensa- tion shall not be payable based on such serv- ices for any week commencing during the period between two successive academic years or terms (or, when an agreement pro- vides instead for a similar period between two regular but not successive terms, during such period) to any individual if such indi- vidual performs such services in the first of such academic years (or terms) and if there is a contract or reasonable assurance that such individual will perform services in any such capacity for any educational institu- tion in the second of such academic years or terms, (ii) with respect to services in any other capacity for an educational institution to which section 3309(a)(1) applies— (I) compensation payable on the basis of such services may be denied to any indi- vidual for any week which commences dur- ing a period between 2 successive academic years or terms if such individual performs such services in the first of such academic years or terms and there is a reasonable assurance that such individual will per- form such services in the second of such academic years or terms, except that (II) if compensation is denied to any in- dividual for any week under subclause (I) Page 2774 TITLE 26—INTERNAL REVENUE CODE § 3304 and such individual was not offered an op- portunity to perform such services for the educational institution for the second of such academic years or terms, such indi- vidual shall be entitled to a retroactive payment of the compensation for each week for which the individual filed a time- ly claim for compensation and for which compensation was denied solely by reason of subclause (I), (iii) with respect to any services described in clause (i) or (ii), compensation payable on the basis of such services shall be denied to any individual for any week which com- mences during an established and customary vacation period or holiday recess if such in- dividual performs such services in the period immediately before such vacation period or holiday recess, and there is a reasonable as- surance that such individual will perform such services in the period immediately fol- lowing such vacation period or holiday re- cess, (iv) with respect to any services described in clause (i) or (ii), compensation payable on the basis of services in any such capacity shall be denied as specified in clauses (i), (ii), and (iii) to any individual who performed such services in an educational institution while in the employ of an educational serv- ice agency, and for this purpose the term ‘‘educational service agency’’ means a gov- ernmental agency or governmental entity which is established and operated exclu- sively for the purpose of providing such serv- ices to one or more educational institutions, (v) with respect to services to which sec- tion 3309(a)(1) applies, if such services are provided to or on behalf of an educational institution, compensation may be denied under the same circumstances as described in clauses (i) through (iv), and (vi) with respect to services described in clause (ii), clauses (iii) and (iv) shall be ap- plied by substituting ‘‘may be denied’’ for ‘‘shall be denied’’, and (B) payments (in lieu of contributions) with respect to service to which section 3309(a)(1) applies may be made into the State unemploy- ment fund on the basis set forth in section 3309(a)(2); (7) an individual who has received compensa- tion 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 an individual for any week because he is in train- ing 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); (9)(A) compensation shall not be denied or reduced to an individual solely because he files a claim in another State (or a contiguous country with which the United States has an agreement with respect to unemployment compensation) or because he resides in an- other State (or such a contiguous country) at the time he files a claim for unemployment compensation; (B) the State shall participate in any ar- rangements for the payment of compensation on the basis of combining an individual’s wages and employment covered under the State law with his wages and employment cov- ered under the unemployment compensation law of other States which are approved by the Secretary of Labor in consultation with the State unemployment compensation agencies as reasonably calculated to assure the prompt and full payment of compensation in such sit- uations. Any such arrangement shall include provisions for (i) applying the base period of a single State law to a claim involving the com- bining of an individual’s wages and employ- ment covered under two or more State laws, and (ii) avoiding duplicate use of wages and employment by reason of such combining; (10) 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 mis- conduct connected with his work, fraud in connection with a claim for compensation, or receipt of disqualifying income; (11) extended compensation shall be payable as provided by the Federal-State Extended Un- employment Compensation Act of 1970; (12) no person shall be denied compensation under such State law solely on the basis of pregnancy or termination of pregnancy; (13) compensation shall not be payable to any individual on the basis of any services, substantially all of which consist of partici- pating in sports or athletic events or training or preparing to so participate, for any week which commences during the period between two successive sport seasons (or similar peri- ods) if such individual performed such services in the first of such seasons (or similar periods) and there is a reasonable assurance that such individual will perform such services in the later of such seasons (or similar periods); (14)(A) compensation shall not be payable on the basis of services performed by an alien un- less such alien is an individual who was law- fully admitted for permanent residence at the time such services were performed, was law- fully present for purposes of performing such services, or was permanently residing in the United States under color of law at the time such services were performed (including an alien who was lawfully present in the United States as a result of the application of the pro- visions of section 212(d)(5) of the Immigration and Nationality Act), (B) any data or information required of indi- viduals applying for compensation to deter- mine whether compensation is not payable to them because of their alien status shall be uniformly required from all applicants for compensation, and (C) in the case of an individual whose appli- cation for compensation would otherwise be approved, no determination by the State agen- cy that compensation to such individual is not payable because of his alien status shall be made except upon a preponderance of the evi- dence; Page 2775 TITLE 26—INTERNAL REVENUE CODE § 3304 (15)(A) subject to subparagraph (B), the amount of compensation payable to an indi- vidual for any week which begins after March 31, 1980, and which begins in a period with re- spect to which such individual is receiving a governmental or other pension, retirement or retired pay, annuity, or any other similar peri- odic payment which is based on the previous work of such individual shall be reduced (but not below zero) by an amount equal to the amount of such pension, retirement or retired pay, annuity, or other payment, which is rea- sonably attributable to such week except that— (i) the requirements of this paragraph shall apply to any pension, retirement or re- tired pay, annuity, or other similar periodic payment only if— (I) such pension, retirement or retired pay, annuity, or similar payment is under a plan maintained (or contributed to) by a base period employer or chargeable em- ployer (as determined under applicable law), and (II) in the case of such a payment not made under the Social Security Act or the Railroad Retirement Act of 1974 (or the corresponding provisions of prior law), services performed for such employer by the individual after the beginning of the base period (or remuneration for such serv- ices) affect eligibility for, or increase the amount of, such pension, retirement or re- tired pay, annuity, or similar payment, and (ii) the State law may provide for limita- tions on the amount of any such a reduction to take into account contributions made by the individual for the pension, retirement or retired pay, annuity, or other similar peri- odic payment, and (B) the amount of compensation shall not be reduced on account of any payments of gov- ernmental or other pensions, retirement or re- tired pay, annuity, or other similar payments which are not includible in the gross income of the individual for the taxable year in which it was paid because it was part of a rollover dis- tribution; (16)(A) wage information contained in the records of the agency administering the State law which is necessary (as determined by the Secretary of Health and Human Services in regulations) for purposes of determining an in- dividual’s eligibility for assistance, or the amount of such assistance, under a State pro- gram funded under part A of title IV of the So- cial Security Act, shall be made available to a State or political subdivision thereof when such information is specifically requested by such State or political subdivision for such purposes, (B) wage and unemployment compensation information contained in the records of such agency shall be furnished to the Secretary of Health and Human Services (in accordance with regulations promulgated by such Sec- retary) as necessary for the purposes of the National Directory of New Hires established under section 453(i) of the Social Security Act, and (C) such safeguards are established as are necessary (as determined by the Secretary of Health and Human Services in regulations) to insure that information furnished under sub- paragraph (A) or (B) is used only for the pur- poses authorized under such subparagraph; (17) any interest required to be paid on ad- vances under title XII of the Social Security Act shall be paid in a timely manner and shall not be paid, directly or indirectly (by an equivalent reduction in State unemployment taxes or otherwise) by such State from amounts in such State’s unemployment fund; (18) Federal individual income tax from un- employment compensation is to be deducted and withheld if an individual receiving such compensation voluntarily requests such de- duction and withholding; and (19) all the rights, privileges, or immunities conferred by such law or by acts done pursu- ant thereto shall exist subject to the power of the legislature to amend or repeal such law at any time. (b) Notification The Secretary of Labor shall, upon approving such law, notify the governor of the State of his approval. (c) Certification On October 31 of each taxable year the Sec- retary of Labor shall certify to the Secretary of the Treasury each State whose law he has pre- viously approved, except that he shall not cer- tify 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 in such subsection. No finding of a failure to comply substantially with any provi- sion in paragraph (5) of subsection (a) shall be based on an application or interpretation of State law (1) until all administrative review pro- vided for under the laws of the State has been exhausted, or (2) with respect to which the time for judicial review provided by the laws of the State has not expired, or (3) with respect to which any judicial review is pending. On October 31 of any taxable year, the Secretary of Labor shall not certify any State which, after reason- able notice and opportunity for hearing to the State agency, the Secretary of Labor finds has failed to amend its law so that it contains each of the provisions required by law to be included therein (including provisions relating to the Federal-State Extended Unemployment Com- pensation Act of 1970 (or any amendments there- to) as required under subsection (a)(11)), or has, with respect to the twelve-month period ending on such October 31, failed to comply substan- tially with any such provision. (d) Notice of noncertification If at any time the Secretary of Labor has rea- son to believe that a State whose law he has pre- viously approved may not be certified under sub- section (c), he shall promptly so notify the gov- ernor of such State. (e) Change of law during 12-month period Whenever— Page 2776 TITLE 26—INTERNAL REVENUE CODE § 3304 (1) any provision of this section, section 3302, or section 3303 refers to a 12-month period end- ing on October 31 of a year, and (2) the law applicable to one portion of such period differs from the law applicable to an- other portion of such period, then such provision shall be applied by taking into account for each such portion the law appli- cable to such portion. (f) Definition of institution of higher education For purposes of subsection (a)(6), the term ‘‘in- stitution of higher education’’ means an edu- cational institution in any State which— (1) admits as regular students only individ- uals having a certificate of graduation from a high school, or the recognized equivalent of such a certificate; (2) is legally authorized within such State to provide a program of education beyond high school; (3) provides an educational program for it which awards a bachelor’s or higher degree, or provides a program which is acceptable for full credit toward such a degree, or offers a pro- gram of training to prepare students for gain- ful employment in a recognized occupation; and (4) is a public or other nonprofit institution. (Aug. 16, 1954, ch. 736, 68A Stat. 443; Pub. L. 91–373, title I, §§ 104(a), 108(a), 121(a), 131(b)(2), 142(f)–(h), title II, § 206, Aug. 10, 1970, 84 Stat. 697, 701, 704, 707, 708, 712; Pub. L. 94–455, title XIX, §§ 1903(a)(14), 1906(b)(13)(C), (E), Oct. 4, 1976, 90 Stat. 1809, 1834; Pub. L. 94–566, title I, § 115(c)(1), (5), title III, §§ 312(a), (b), 314(a), title V, § 506(b), Oct. 20, 1976, 90 Stat. 2670, 2671, 2679, 2680, 2687; Pub. L. 95–19, title III, § 302(a), (c), (e), Apr. 12, 1977, 91 Stat. 44, 45; Pub. L. 95–171, § 2(a), Nov. 12, 1977, 91 Stat. 1353; Pub. L. 95–216, title IV, § 403(b), Dec. 20, 1977, 91 Stat. 1561; Pub. L. 96–364, title IV, § 414(a), Sept. 26, 1980, 94 Stat. 1310; Pub. L. 97–35, title XXIV, § 2408(a), Aug. 13, 1981, 95 Stat. 880; Pub. L. 97–248, title I, § 193(a), Sept. 3, 1982, 96 Stat. 408; Pub. L. 98–21, title V, §§ 515(b), 521(a), 523(a), Apr. 20, 1983, 97 Stat. 147, 148; Pub. L. 99–272, title XII, § 12401(b)(1), Apr. 7, 1986, 100 Stat. 297; Pub. L. 99–514, title XVIII, § 1899A(43), Oct. 22, 1986, 100 Stat. 2960; Pub. L. 101–649, title I, § 162(e)(4), Nov. 29, 1990, 104 Stat. 5011; Pub. L. 102–164, title III, § 302(a), Nov. 15, 1991, 105 Stat. 1059; Pub. L. 102–318, title IV, § 401(a)(1), July 3, 1992, 106 Stat. 298; Pub. L. 103–182, title V, § 507(b)(1), Dec. 8, 1993, 107 Stat. 2154; Pub. L. 103–465, title VII, § 702(b), (c)(1), Dec. 8, 1994, 108 Stat. 4997; Pub. L. 104–193, title I, § 110(l)(1), for- merly § 110(l)(2), title III, § 316(g)(2), Aug. 22, 1996, 110 Stat. 2173, 2218, renumbered Pub. L. 105–33, title V, § 5514(a)(2), Aug. 5, 1997, 111 Stat. 620; Pub. L. 107–147, title II, § 209(d)(1), Mar. 9, 2002, 116 Stat. 33; Pub. L. 109–280, title XI, § 1105(a), Aug. 17, 2006, 120 Stat. 1060; Pub. L. 110–328, § 3(c), Sept. 30, 2008, 122 Stat. 3572; Pub. L. 110–458, title I, § 111(b), Dec. 23, 2008, 122 Stat. 5113; Pub. L. 112–96, title II, §§ 2103(a), 2161(b)(1)(A), Feb. 22, 2012, 126 Stat. 161, 172; Pub. L. 115–141, div. U, title IV, § 401(a)(211), Mar. 23, 2018, 132 Stat. 1194.) Editorial Notes REFERENCES IN TEXT The Social Security Act, referred to in subsec. (a)(4)(B), (D), (15)(A)(i)(II), (16)(A), (B), (17), is act Aug. 14, 1935, ch. 531, 49 Stat. 620, which is classified gen- erally to chapter 7 (§ 301 et seq.) of Title 42, The Public Health and Welfare. Part A of title IV and title XII of the Act are classified generally to part A (§ 601 et seq.) of subchapter IV and subchapter XII (§ 1321 et seq.), re- spectively, of chapter 7 of Title 42. Sections 303(g), 453(i), and 903(c)(2), (d)(4) of the Act are classified to sections 503(g), 653(i), and 1103(c)(2), (d)(4), respectively, of Title 42. For complete classification of this Act to the Code, see Short Title note set out under section 1305 of Title 42 and Tables. The Federal-State Extended Unemployment Com- pensation Act of 1970, referred to in subsecs. (a)(11) and (c), is Pub. L. 91–373, title II, Aug. 10, 1970, 84 Stat. 708, which is set out as a note below. Section 212(d)(5) of the Immigration and Nationality Act, referred to in subsec. (a)(14)(A), is classified to sec- tion 1182(d)(5) of Title 8, Aliens and Nationality. The Railroad Retirement Act of 1974, referred to in subsec. (a)(15)(A)(i)(II), is act Aug. 29, 1935, ch. 812, as amended generally by Pub. L. 93–445, title I, § 101, Oct. 16, 1974, 88 Stat. 1305, which is classified generally to subchapter IV (§ 231 et seq.) of chapter 9 of Title 45, Railroads. For further details and complete classifica- tion of this Act to the Code, see Codification note set out preceding section 231 of Title 45, section 231t of Title 45, and Tables. AMENDMENTS 2018—Subsec. (a)(4)(G)(ii). Pub. L. 115–141 substituted ‘‘section 6402(f)(4)(C)’’ for ‘‘section 6402(f)(4)(B)’’. 2012—Subsec. (a)(4)(D). Pub. L. 112–96, § 2103(a), sub- stituted ‘‘shall’’ for ‘‘may’’. Subsec. (a)(4)(E). Pub. L. 112–96, § 2161(b)(1)(A), amend- ed subpar. (E) generally. Prior to amendment, subpar. (E) read as follows: ‘‘amounts may be withdrawn for the payment of short-time compensation under a plan approved by the Secretary of Labor;’’. 2008—Subsec. (a). Pub. L. 110–458, § 111(b)(2), struck out concluding provisions which read as follows: ‘‘Com- pensation shall not be reduced under paragraph (15) for any pension, retirement or retired pay, annuity, or similar payment which is not includible in gross in- come of the individual for the taxable year in which paid because it was part of a rollover distribution.’’ Subsec. (a)(4)(G). Pub. L. 110–328 added subpar. (G). Subsec. (a)(15). Pub. L. 110–458, § 111(b)(1), inserted ‘‘(A) subject to subparagraph (B),’’ after par. designa- tion, redesignated former subpars. (A) and (B) as cls. (i) and (ii), respectively, of subpar. (A), redesignated former cls. (i) and (ii) as subcls. (I) and (II), respec- tively, of cl. (i), substituted ‘‘, and’’ for semicolon at end of cl. (ii), and added subpar. (B). 2006—Subsec. (a). Pub. L. 109–280 added concluding provisions. 2002—Subsec. (a)(4)(B). Pub. L. 107–147 inserted ‘‘or 903(d)(4)’’ before ‘‘of the Social Security Act’’. 1996—Subsec. (a)(16)(A). Pub. L. 104–193, § 316(g)(2)(C), struck out ‘‘and’’ at end. Pub. L. 104–193, § 316(g)(2)(A), substituted ‘‘Secretary of Health and Human Services’’ for ‘‘Secretary of Health, Education, and Welfare’’. Pub. L. 104–193, § 110(l)(1), formerly § 110(l)(2), as re- numbered by Pub. L. 105–33, substituted ‘‘eligibility for assistance, or the amount of such assistance, under a State program funded’’ for ‘‘eligibility for aid or serv- ices, or the amount of such aid or services, under a State plan for aid and services to needy families with children approved’’. Subsec. (a)(16)(B). Pub. L. 104–193, § 316(g)(2)(E), added subpar. (B). Former subpar. (B) redesignated (C). Pub. L. 104–193, § 316(g)(2)(B), substituted ‘‘informa- tion furnished under subparagraph (A) or (B) is used only for the purposes authorized under such subpara- Page 2777 TITLE 26—INTERNAL REVENUE CODE § 3304 graph;’’ for ‘‘such information is used only for the pur- poses authorized under subparagraph (A);’’. Pub. L. 104–193, § 316(g)(2)(A), substituted ‘‘Secretary of Health and Human Services’’ for ‘‘Secretary of Health, Education, and Welfare’’. Subsec. (a)(16)(C). Pub. L. 104–193, § 316(g)(2)(D), redes- ignated subpar. (B) as (C). 1994—Subsec. (a)(4)(C). Pub. L. 103–465, § 702(c)(1), in- serted ‘‘, or the withholding of Federal, State, or local individual income tax,’’ after ‘‘health insurance’’. Subsec. (a)(17) to (19). Pub. L. 103–465, § 702(b), struck out ‘‘and’’ at end of par. (17), added par. (18), and redes- ignated former par. (18) as (19). 1993—Subsec. (a)(4)(F). Pub. L. 103–182 added subpar. (F). 1992—Subsec. (a)(4)(E). Pub. L. 102–318 added subpar. (E). 1991—Subsec. (a)(6)(A)(ii)(I). Pub. L. 102–164, § 302(a)(1), substituted ‘‘may be denied’’ for ‘‘shall be denied’’. Subsec. (a)(6)(A)(iii), (iv). Pub. L. 102–164, § 302(a)(2), which directed that ‘‘and’’ be struck out at end of cls. (iii) and (iv), could be executed only to cl. (iv) because ‘‘and’’ did not appear at end of cl. (iii). Subsec. (a)(6)(A)(vi). Pub. L. 102–164, § 302(a)(2), added cl. (vi). 1990—Subsec. (a)(14)(A). Pub. L. 101–649 struck out ref- erence to section 203(a)(7) of Immigration and Nation- ality Act. 1986—Subsec. (a)(4)(D). Pub. L. 99–272 added subpar. (D). Subsec. (a)(6)(A)(iii). Pub. L. 99–514 struck out ‘‘and’’ at end. 1983—Subsec. (a)(4)(C). Pub. L. 98–21, § 523(a), added subpar. (C). Subsec. (a)(6)(A)(ii)(I), (iii), (iv). Pub. L. 98–21, § 521(a)(2), substituted ‘‘shall be denied’’ for ‘‘may be de- nied’’. Subsec. (a)(6)(A)(v). Pub. L. 98–21, § 521(a)(1), added cl. (v). Subsec. (a)(17), (18). Pub. L. 98–21, § 515(b), added par. (17) and redesignated former par. (17) as (18). 1982—Subsec. (a)(6)(A)(ii). Pub. L. 97–248 redesignated existing provisions as provisions preceding subcl. (I) and subcl. (I), and in such provisions as so redesignated, struck out ‘‘(other than an institution of higher edu- cation)’’ after ‘‘capacity for an educational institu- tion’’, substituted ‘‘2’’ for ‘‘two’’, and inserted ‘‘except that’’ at end of subcl. (I), and added subcl. (II). 1981—Subsec. (c). Pub. L. 97–35 substituted provisions relating to limitations on certification on Oct. 31 of any taxable year, for provisions relating to limitations on certification on Oct. 31 of any taxable year after 1971, and on Oct. 31 of any taxable year after 1977. 1980—Subsec. (a)(15). Pub. L. 96–364 inserted provi- sions relating to applicability to any pension, retire- ment or retired pay, annuity, or other similar periodic payment. 1977—Subsec. (a)(6)(A)(i). Pub. L. 95–19, § 302(c)(1), (2), inserted a comma between ‘‘instructional’’ and ‘‘re- search’’, substituted ‘‘two successive academic years or terms’’ for ‘‘two successive academic years’’, and struck out ‘‘and’’ after ‘‘the second of such academic years or terms,’’. Subsec. (a)(6)(A)(iii). Pub. L. 95–19, § 302(c)(3), added cl. (iii). Subsec. (a)(6)(A)(iv). Pub. L. 95–171 added cl. (iv). Subsec. (a)(14)(A). Pub. L. 95–19, § 302(a), substituted ‘‘who was lawfully admitted for permanent residence at the time such services were performed, was lawfully present for purposes of performing such services, or was permanently residing in the United States under color of law at the time such services were performed (in- cluding an alien who was’’ for ‘‘who has been lawfully admitted for permanent residence or otherwise is per- manently residing in the United States under color of law (including an alien who is’’. Subsec. (a)(15). Pub. L. 95–19, § 302(e), substituted ‘‘March 31, 1980’’ for ‘‘September 30, 1979’’. Subsec. (a)(16), (17). Pub. L. 95–216 added par. (16). Former par. (16) redesignated (17). 1976—Subsec. (a)(3). Pub. L. 94–455, §§ 1903(a)(14)(A), 1906(b)(13)(C), inserted ‘‘of the Treasury’’ after ‘‘to the Secretary’’ and struck out ‘‘49 Stat. 640; 52 Stat. 1104, 1105;’’ before ‘‘42 U.S.C. 1104’’. Subsec. (a)(6)(A). Pub. L. 94–566, § 115(c)(1), designated existing provisions as cl. (i), added cl. (ii), and in cl. (i) as so designated substituted ‘‘educational institution’’ for ‘‘institution of higher education’’, ‘‘an agreement provides’’ for ‘‘the contract provides’’, and ‘‘if such in- dividual performs such services in the first of such aca- demic years (or terms) and if there is a contract or rea- sonable assurance that such individual will perform services in any such capacity for any educational insti- tution in the second of such academic years or terms, and’’ for ‘‘who has a contract to perform services in any such capacity for any institution or institutions of higher education for both of such academic years or both of such terms, and’’. Subsec. (a)(6)(B). Pub. L. 94–566, § 506(b), substituted ‘‘section 3309(a)(1)’’ for ‘‘section 3309(a)(1)(A)’’. Subsec. (a)(12). Pub. L. 94–566, § 312(a), substituted provisions that no person shall be denied compensation under such State law solely on the basis of pregnancy or termination of pregnancy for provisions that each political subdivision of the State should have the right to elect to have compensation payable to employees thereof (whose services were not otherwise subject to such law) based on service performed by such employ- ees in the hospitals and institutions of higher edu- cation (as defined in section 3309(d)) operated by such political subdivision; and, if any such political subdivi- sion did elect to have compensation payable to such employees thereof (A) the political subdivision elected should pay into the State unemployment fund, with re- spect to the service of such employees, payments (in lieu of contributions), and (B) such employees would be entitled to receive, on the basis of such service, com- pensation payable on the same conditions as compensa- tion which was payable on the basis of similar service for the State which was subject to such law. Subsec. (a)(13) to (16). Pub. L. 94–566, § 314(a), added pars. (13) to (15) and redesignated former par. (13) as (16). Subsec. (c). Pub. L. 94–566, § 312(b), provided that on Oct. 31 of any taxable year after 1977, the Secretary shall not certify any State which, after reasonable no- tice and opportunity for a hearing to the State agency, the Secretary of Labor finds has failed to amend its law so that it contains each of the provisions required by reason of the enactment of the Unemployment Com- pensation Amendments of 1976 to be included therein, or has with respect to the 12-month period ending on such Oct. 31, failed to comply substantially with any such provision. Pub. L. 94–455, §§ 1903(a)(14)(B), 1906(b)(13)(C), (E), in- serted ‘‘of the Treasury’’ after ‘‘certify to the Sec- retary’’, substituted ‘‘the Secretary of Labor shall’’ for ‘‘the Secretary shall’’ and struck out ‘‘(10-month period in the case of October 31, 1972)’’ after ‘‘to the 12-month period’’. Subsec. (f). Pub. L. 94–566, § 115(c)(5), added subsec. (f). 1970—Subsec. (a)(6) to (13). Pub. L. 91–373, §§ 104(a), 108(a), 121(a), 206, added pars. (6) to (12) and redesig- nated former par. (6) as (13). Subsec. (c). Pub. L. 91–373, § 131(b)(2), clarified provi- sions governing procedure to be followed with respect to a finding of the Secretary of Labor that a state has failed to comply substantially with any of the provi- sions of subsec. (a)(5). Pub. L. 91–373, § 142(f), substituted ‘‘October 31’’ for ‘‘December 31’’ as certification date and ‘‘12-month pe- riod ending on such October 31’’ for ‘‘taxable year’’ and prohibited certifications for failure to amend State laws to contain provisions required by reason of enact- ment of the Employment Security Amendments of 1970. Subsec. (d). Pub. L. 91–373, § 142(g), substituted ‘‘If at any time’’ for ‘‘If, at any time during the taxable year,’’. Subsec. (e). Pub. L. 91–373, § 142(h), added subsec. (e). Page 2778 TITLE 26—INTERNAL REVENUE CODE § 3304 Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2012 AMENDMENT Pub. L. 112–96, title II, § 2103(c), Feb. 22, 2012, 126 Stat. 161, provided that: ‘‘The amendments made by this sec- tion [amending this section and section 503 of Title 42, The Public Health and Welfare] shall apply to weeks beginning after the end of the first session of the State legislature which begins after the date of enactment of this Act [Feb. 22, 2012].’’ EFFECTIVE DATE OF 2008 AMENDMENT Amendment by Pub. L. 110–458 effective as if included in the provisions of Pub. L. 109–280 to which the amend- ment relates, except as otherwise provided, see section 112 of Pub. L. 110–458, set out as a note under section 72 of this title. Pub. L. 110–328, § 3(e), Sept. 30, 2008, 122 Stat. 3573, pro- vided that: ‘‘The amendments made by this section [amending this section and sections 6103 and 6402 of this title] shall apply to refunds payable under section 6402 of the Internal Revenue Code of 1986 on or after the date of enactment of this Act [Sept. 30, 2008].’’ EFFECTIVE DATE OF 2006 AMENDMENT Pub. L. 109–280, title XI, § 1105(b), Aug. 17, 2006, 120 Stat. 1060, provided that: ‘‘The amendment made by this section [amending this section] shall apply to weeks beginning on or after the date of the enactment of this Act [Aug. 17, 2006].’’ EFFECTIVE DATE OF 1996 AMENDMENT Amendment by section 110(l)(1) of Pub. L. 104–193 ef- fective July 1, 1997, with transition rules relating to State options to accelerate such date, rules relating to claims, actions, and proceedings commenced before such date, rules relating to closing out of accounts for terminated or substantially modified programs and continuance in office of Assistant Secretary for Family Support, and provisions relating to termination of enti- tlement under AFDC program, see section 116 of Pub. L. 104–193, as amended, set out as an Effective Date note under section 601 of Title 42, The Public Health and Welfare. For effective date of amendment by section 316(g)(2) of Pub. L. 104–193, see section 395(a)–(c) of Pub. L. 104–193, set out as a note under section 654 of Title 42. EFFECTIVE DATE OF 1994 AMENDMENT Pub. L. 103–465, title VII, § 702(d), Dec. 8, 1994, 108 Stat. 4997, provided that: ‘‘The amendments made by this section [amending this section, sections 3306 and 3402 of this title, and section 503 of Title 42, The Public Health and Welfare] shall apply to payments made after De- cember 31, 1996.’’ EFFECTIVE DATE OF 1991 AMENDMENT Pub. L. 102–164, title III, § 302(b), Nov. 15, 1991, 105 Stat. 1059, provided that: ‘‘The amendments made by this section [amending this section] section shall apply in the case of compensation paid for weeks beginning on or after the date of the enactment of this Act [Nov. 15, 1991].’’ EFFECTIVE DATE OF 1990 AMENDMENT Amendment by Pub. L. 101–649 effective Oct. 1, 1991, and applicable beginning with fiscal year 1992, see sec- tion 161(a) of Pub. L. 101–649, set out as a note under section 1101 of Title 8, Aliens and Nationality. EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–272 applicable to recoveries made on or after Apr. 7, 1986, and applicable with re- spect to overpayments made before, on, or after such date, see section 12401(c) of Pub. L. 99–272, set out as a note under section 503 of Title 42, The Public Health and Welfare. EFFECTIVE DATE OF 1983 AMENDMENT Pub. L. 98–21, title V, § 521(b), Apr. 20, 1983, 97 Stat. 147, provided that: ‘‘(1) Except as provided in paragraph (2), the amend- ments made by this section [amending this section] shall apply in the case of compensation paid for weeks beginning on or after April 1, 1984. ‘‘(2) In the case of a State with respect to which the Secretary of Labor has determined that State legisla- tion is required in order to comply with the amend- ment made by this section, the amendment made by this section shall apply in the case of compensation paid for weeks which begin on or after April 1, 1984, and after the end of the first session of the State legislature which begins after the date of the enactment of this Act [Apr. 20, 1983], or which began prior to the date of the enactment of this Act and remained in session for at least twenty-five calendar days after such date of en- actment. For purposes of the preceding sentence, the term ‘session’ means a regular, special, budget, or other session of a State legislature.’’ Pub. L. 98–21, title V, § 523(c), Apr. 20, 1983, 97 Stat. 149, provided that: ‘‘The amendments made by this sec- tion [amending this section and section 503 of Title 42, The Public Health and Welfare] shall take effect on the date of the enactment of this Act [Apr. 20, 1983].’’ EFFECTIVE DATE OF 1982 AMENDMENT Pub. L. 97–248, title I, § 193(b), Sept. 3, 1982, 96 Stat. 409, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘(1) The amendment made by subsection (a) [amend- ing this section] shall apply to weeks of unemployment beginning after the date of the enactment of this Act [Sept. 3, 1982]. ‘‘(2) The amendment made by subsection (a) [amend- ing this section], insofar as it requires retroactive pay- ments of compensation to employees of educational in- stitutions other than institutions of higher education (as defined in section 3304(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), shall not be a re- quirement for any State law before January 1, 1984.’’ EFFECTIVE DATE OF 1980 AMENDMENT Pub. L. 96–364, title IV, § 414(b), Sept. 26, 1980, 94 Stat. 1310, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply to cer- tifications of States for 1981 and subsequent years.’’ EFFECTIVE DATE OF 1977 AMENDMENTS Pub. L. 95–216, title IV, § 403(d), Dec. 20, 1977, 91 Stat. 1562, provided that: ‘‘The amendments made by this section [enacting section 611 of Title 42, The Public Health and Welfare, and amending this section and sec- tion 602 of Title 42] shall be effective on the date of the enactment of this Act [Dec. 20, 1977].’’ Pub. L. 95–171, § 2(b), Nov. 12, 1977, 91 Stat. 1353, pro- vided that: ‘‘The amendments made by subsection (a) [amending this section] shall apply with respect to weeks of unemployment which begin after December 31, 1977.’’ Pub. L. 95–19, title III, § 302(d)(1), Apr. 12, 1977, 91 Stat. 45, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall take effect as if in- cluded in the amendment made by section 314 of the Unemployment Compensation Amendments of 1976.’’ Pub. L. 95–19, title III, § 302(d)(3), Apr. 12, 1977, 91 Stat. 45, provided that: ‘‘The amendments made by sub- section (c) [amending this section] shall take effect as if included in the amendments made by section 115(c) of the Unemployment Compensation Amendments of 1976.’’ EFFECTIVE DATE OF 1976 AMENDMENTS Pub. L. 94–566, title I, § 115(d), Oct. 20, 1976, 90 Stat. 2671, as amended by Pub. L. 95–19, title III, § 301(a), Apr. 12, 1977, 91 Stat. 43, effective Oct. 20, 1976, provided that: ‘‘(1) Except as provided in paragraph (2), the amend- ments made by this section [amending this section and section 3309 of this title] shall apply with respect to certifications of States for 1978 and subsequent years; except that— Page 2779 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘(A) the amendments made by subsections (a) and (b) [amending section 3309 of this title] shall only apply with respect to services performed after De- cember 31, 1977; and ‘‘(B) the amendments made by subsection (c) [amending this section and section 3309 of this title] shall only apply with respect to weeks of unemploy- ment which begin after December 31, 1977. ‘‘(2) In the case of any State the legislature of which does not meet in a regular session which closes during the calendar year 1977, the amendments made by sub- section (c) [amending this section and section 3309 of this title] shall only apply with respect to weeks of un- employment which begin after December 31, 1978 (or if earlier, the date provided by State law).’’ Pub. L. 94–566, title I, § 116(f), Oct. 20, 1976, 90 Stat. 2673, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘EFFECTIVE DATES.— ‘‘(1) SUBSECTIONS (a), (c) AND (d).—The amendments made by subsections (a), (c), and (d) [amending sec- tions 202 and 205 of Pub. L. 91–373 and section 102 of Pub. L. 93–57 set out below, section 49d of Title 29, Labor, and section 1301 of Title 42, The Public Health and Welfare] shall take effect on the later of October 1, 1976, or the day after the day on which the Sec- retary of Labor approves under section 3304(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] an unemployment compensation law submitted to him by the Virgin Islands for approval. ‘‘(2) SUBSECTION (b).—The amendments made by subsection (b) [amending section 3306 of this title] shall apply with respect to remuneration paid after December 31 of the year in which the Secretary of Labor approves for the first time an unemployment compensation law submitted to him by the Virgin Is- lands for approval, for services performed after such December 31. ‘‘(3) SUBSECTION (e).—The amendments made by subsection (e) [amending sections 8501, 8503, 8504, 8521, and 8522 of Title 5, Government Organization and Em- ployees] shall apply with respect to benefit years be- ginning on or after the later of October 1, 1976, or the first day of the first week for which compensation be- comes payable under an unemployment compensation law of the Virgin Islands which is approved by the Secretary of Labor under section 3304(a) of the Inter- nal Revenue Code of 1986.’’ Pub. L. 94–566, title III, § 312(c), Oct. 20, 1976, 90 Stat. 2679, as amended by Pub. L. 95–19, title III, § 301(b), Apr. 12, 1977, 91 Stat. 43, effective Oct. 20, 1976, provided that: ‘‘(1) Except as provided in paragraph (2), the amend- ments made by this section [amending this section] shall apply with respect to certifications of States for 1978 and subsequent years. ‘‘(2) In the case of any State the legislature of which does not meet in a regular session which closes during the calendar year 1977, the amendments made by this section [amending this section] shall apply with re- spect to the certification of such State for 1979 and sub- sequent years.’’ Pub. L. 94–566, title III, § 314(b), Oct. 20, 1976, 90 Stat. 2680, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply with re- spect to certifications of States for 1978 and subsequent years, or for 1979 and subsequent years in the case of States the legislatures of which do not meet in a reg- ular session which closes in the calendar year 1977.’’ Pub. L. 94–566, title V, § 506(c), Oct. 20, 1976, 90 Stat. 2687, as amended by Pub. L. 95–19, title III, § 301(c), Apr. 12, 1977, 91 Stat. 44, effective Oct. 20, 1976, provided that: ‘‘(1) Except as provided in paragraph (2), the amend- ments made by this section [amending this section and section 3309 of this title] shall apply with respect to certifications of States for 1978 and subsequent years, but only with respect to services performed after De- cember 31, 1977. ‘‘(2) In the case of any State the legislature of which does not meet in a regular session which closes during the calendar year 1977, the amendments made by this section [amending this section and section 3309 of this title] shall apply with respect to the certification of such State for 1979 and subsequent years, but only with respect to services performed after December 31, 1978.’’ [Pub. L. 95–19, title III, § 301(d), Apr. 12, 1977, 91 Stat. 44, provided that: ‘‘The amendments made by this sec- tion [amending this Effective Date of 1976 Amendment note in three places] shall take effect on October 20, 1976.’’] EFFECTIVE DATE OF 1970 AMENDMENT Pub. L. 91–373, title I, § 104(d), Aug. 10, 1970, 84 Stat. 699, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘(1) Subject to the provisions of paragraph (2), the amendments made by subsections (a) and (b) [amending this section and enacting section 3309 of this title] shall apply with respect to certifications of State laws for 1972 and subsequent years, but only with respect to service performed after December 31, 1971. The amend- ment made by subsection (c) [amending section 3303 of this title] shall take effect January 1, 1970. ‘‘(2) Section 3304(a)(6) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a) of this section) shall not be a requirement for the State law of any State prior to July 1, 1972, if the legislature of such State does not meet in a regular session which closes during the calendar year 1971.’’ Pub. L. 91–373, title I, § 108(b), Aug. 10, 1970, 84 Stat. 701, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall apply with respect to certification of State laws for 1972 and subse- quent years; except that section 3304(a)(12) of the Inter- nal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) shall not be a requirement for the State law of any State prior to July 1, 1972, if the legislature of such State does not meet in a regular ses- sion which closes during the calendar year 1971, or prior to January 1, 1975, if compliance with such requirement would necessitate a change in the constitution of such State.’’ Pub. L. 91–373, title I, § 121(b), Aug. 10, 1970, 84 Stat. 702, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘(1) Subject to the provisions of paragraph (2), the amendments made by subsection (a) [amending this section] shall take effect January 1, 1972, and shall apply to the taxable year 1972 and taxable years there- after. ‘‘(2) Paragraphs (7) through (10) of section 3304(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a) of this section) shall not be requirements for the State law of any State prior to July 1, 1972, if the legislature of such State does not meet in a regular session which closes during the cal- endar year 1971.’’ Amendment by section 142(f)–(h) of Pub. L. 91–373 ap- plicable with respect to taxable year 1972 and taxable years thereafter, see section 142(i) of Pub. L. 91–373, set out as a note under section 3302 of this title. WAIVER OF CERTAIN 1970 ACT PROVISIONS TO PRE- SERVE ACCESS TO EXTENDED BENEFITS IN HIGH UN- EMPLOYMENT STATES Pub. L. 116–260, div. N, title II, § 266, Dec. 27, 2020, 134 Stat. 1964, provided that: ‘‘(a) IN GENERAL.—For purposes of determining the beginning of an extended benefit period (or a high un- employment period) under the Federal-State Extended Unemployment Compensation Act of 1970 [Pub. L. 91–373, title II] (26 U.S.C. 3304 note [set out below]) dur- ing the period beginning on November 1, 2020, and end- ing December 31, 2021, section 203 of such Act may be applied without regard to subsection (b)(1)(B) of such section. ‘‘(b) RULEMAKING AUTHORITY; TECHNICAL ASSIST- ANCE.—The Secretary of Labor shall issue such rules or other guidance as the Secretary determines may be Page 2780 TITLE 26—INTERNAL REVENUE CODE § 3304 necessary for the implementation of subsection (a), and shall provide technical assistance to States as needed to facilitate such implementation.’’ EMERGENCY FLEXIBILITY FOR RESPONSE TO COVID–19 Pub. L. 117–2, title IX, § 9015, Mar. 11, 2021, 135 Stat. 119, provided that: ‘‘If a State modifies its unemploy- ment compensation law and policies, subject to the succeeding sentence, with respect to personnel stand- ards on a merit basis on an emergency temporary basis as needed to respond to the spread of COVID–19, such modifications shall be disregarded for the purposes of applying section 303 of the Social Security Act [42 U.S.C. 503] and section 3304 of the Internal Revenue Code of 1986 to such State law. Such modifications shall only apply through September 6, 2021, and shall be lim- ited to engaging of temporary staff, rehiring of retirees or former employees on a non-competitive basis, and other temporary actions to quickly process applica- tions and claims.’’ Similar provisions were contained in the following appropriation act: Pub. L. 116–127, div. D, § 4102(b), Mar. 18, 2020, 134 Stat. 194. SELF-EMPLOYMENT ASSISTANCE PROGRAMS Pub. L. 112–96, title II, §§ 2182–2184, Feb. 22, 2012, 126 Stat. 182–184, provided that: ‘‘SEC. 2182. GRANTS FOR SELF-EMPLOYMENT AS- SISTANCE PROGRAMS. ‘‘(a) IN GENERAL.— ‘‘(1) ESTABLISHMENT OR IMPROVED ADMINISTRATION.— Subject to the requirements established under sub- section (b), the Secretary shall award grants to States for the purposes of— ‘‘(A) improved administration of self-employment assistance programs that have been established, prior to the date of the enactment of this Act [Feb. 22, 2012], pursuant to section 3306(t) of the Internal Revenue Code of 1986 (26 U.S.C. 3306(t)), for individ- uals who are eligible to receive regular unemploy- ment compensation; ‘‘(B) development, implementation, and adminis- tration of self-employment assistance programs that are established, subsequent to the date of the enactment of this Act, pursuant to section 3306(t) of the Internal Revenue Code of 1986, for individuals who are eligible to receive regular unemployment compensation; and ‘‘(C) development, implementation, and adminis- tration of self-employment assistance programs that are established pursuant to section 208 of the Federal-State Extended Unemployment Compensa- tion Act of 1970 [Pub. L. 91–373, set out below] or section 4001(j) of the Supplemental Appropriations Act, 2008, [Pub. L. 110–252, set out below] for indi- viduals who are eligible to receive extended com- pensation or emergency unemployment compensa- tion. ‘‘(2) PROMOTION AND ENROLLMENT.—Subject to the requirements established under subsection (b), the Secretary shall award additional grants to States that submit approved applications for a grant under paragraph (1) for such States to promote self-employ- ment assistance programs and enroll unemployed in- dividuals in such programs. ‘‘(b) APPLICATION AND DISBURSAL.— ‘‘(1) APPLICATION.—Any State seeking a grant under paragraph (1) or (2) of subsection (a) shall submit an application to the Secretary at such time, in such manner, and containing such information as is deter- mined appropriate by the Secretary. In no case shall the Secretary award a grant under this section with respect to an application that is submitted after De- cember 31, 2013. ‘‘(2) NOTICE.—Not later than 30 days after receiving an application described in paragraph (1) from a State, the Secretary shall notify the State agency as to whether a grant has been approved for such State for the purposes described in subsection (a). ‘‘(3) CERTIFICATION.—If the Secretary determines that a State has met the requirements for a grant under subsection (a), the Secretary shall make a cer- tification to that effect to the Secretary of the Treas- ury, as well as a certification as to the amount of the grant payment to be transferred to the State account in the Unemployment Trust Fund under section 904 of the Social Security Act (42 U.S.C. 1104). The Sec- retary of the Treasury shall make the appropriate transfer to the State account not later than 7 days after receiving such certification. ‘‘(c) ALLOTMENT FACTORS.—For purposes of allotting the funds available under subsection (d) to States that have met the requirements for a grant under this sec- tion, the amount of the grant provided to each State shall be determined based upon the percentage of un- employed individuals in the State relative to the per- centage of unemployed individuals in all States. ‘‘(d) FUNDING.—There are appropriated, out of moneys in the Treasury not otherwise appropriated, $35,000,000 for the period of fiscal year 2012 through fiscal year 2013 for purposes of carrying out the grant program under this section, [sic] ‘‘SEC. 2183. ASSISTANCE AND GUIDANCE IN IMPLE- MENTING SELF-EMPLOYMENT ASSISTANCE PROGRAMS. ‘‘(a) MODEL LANGUAGE AND GUIDANCE.—For purposes of assisting States in establishing, improving, and ad- ministering self-employment assistance programs, the Secretary shall— ‘‘(1) develop model language that may be used by States in enacting such programs, as well as periodi- cally review and revise such model language; and ‘‘(2) provide technical assistance and guidance in establishing, improving, and administering such pro- grams. ‘‘(b) REPORTING AND EVALUATION.— ‘‘(1) REPORTING.—The Secretary shall establish re- porting requirements for States that have established self-employment assistance programs, which shall in- clude reporting on— ‘‘(A) the total number of individuals who received unemployment compensation and— ‘‘(i) were referred to a self-employment assist- ance program; ‘‘(ii) participated in such program; and ‘‘(iii) received an allowance under such pro- gram; ‘‘(B) the total amount of allowances provided to individuals participating in a self-employment as- sistance program; ‘‘(C) the total income (as determined by survey or other appropriate method) for businesses that have been established by individuals participating in a self-employment assistance program, as well as the total number of individuals employed through such businesses; and ‘‘(D) any additional information, as determined appropriate by the Secretary. ‘‘(2) EVALUATION.—Not later than 5 years after the date of the enactment of this Act [Feb. 22, 2012], the Secretary shall submit to Congress a report that evaluates the effectiveness of self-employment assist- ance programs established by States, including— ‘‘(A) an analysis of the implementation and oper- ation of self-employment assistance programs by States; ‘‘(B) an evaluation of the economic outcomes for individuals who participated in a self-employment assistance program as compared to individuals who received unemployment compensation and did not participate in a self-employment assistance pro- gram, including a comparison as to employment status, income, and duration of receipt of unem- ployment compensation or self-employment assist- ance allowances; and ‘‘(C) an evaluation of the state of the businesses started by individuals who participated in a self- employment assistance program, including infor- mation regarding— Page 2781 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘(i) the type of businesses established; ‘‘(ii) the sustainability of the businesses; ‘‘(iii) the total income collected by the busi- nesses; ‘‘(iv) the total number of individuals employed through such businesses; and ‘‘(v) the estimated Federal and State tax rev- enue collected from such businesses and their em- ployees. ‘‘(c) FLEXIBILITY AND ACCOUNTABILITY.—The model language, guidance, and reporting requirements devel- oped by the Secretary under subsections (a) and (b) shall— ‘‘(1) allow sufficient flexibility for States and par- ticipating individuals; and ‘‘(2) ensure accountability and program integrity. ‘‘(d) CONSULTATION.—For purposes of developing the model language, guidance, and reporting requirements described under subsections (a) and (b), the Secretary shall consult with employers, labor organizations, State agencies, and other relevant program experts. ‘‘(e) ENTREPRENEURIAL TRAINING PROGRAMS.—The Secretary shall utilize resources available through the Department of Labor and coordinate with the Adminis- trator of the Small Business Administration to ensure that adequate funding is reserved and made available for the provision of entrepreneurial training to individ- uals participating in self-employment assistance pro- grams. ‘‘(f) SELF-EMPLOYMENT ASSISTANCE PROGRAM.—For purposes of this section, the term ‘self-employment as- sistance program’ means a program established pursu- ant to section 3306(t) of the Internal Revenue Code of 1986 (26 U.S.C. 3306(t)), section 208 of the Federal-State Extended Unemployment Compensation Act of 1970 [Pub. L. 91–373, set out below], or section 4001(j) of the Supplemental Appropriations Act, 2008, [Pub. L. 110–252, set out below] for individuals who are eligible to receive regular unemployment compensation, ex- tended compensation, or emergency unemployment compensation. SEC. 2184. DEFINITIONS. ‘‘In this subtitle [subtitle E (§§ 2181–2184) of title II of Pub. L. 112–96, enacting this note and amending provi- sions set out as notes under this section]: ‘‘(1) SECRETARY.—The term ‘Secretary’ means the Secretary of Labor. ‘‘(2) STATE; STATE AGENCY.—The terms ‘State’ and ‘State agency’ have the meanings given such terms under section 205 of the Federal-State Extended Un- employment Compensation Act of 1970 [title II of Pub. L. 91–373] (26 U.S.C. 3304 note).’’ TREATMENT OF ADDITIONAL REGULAR COMPENSATION Pub. L. 111–92, § 8, Nov. 6, 2009, 123 Stat. 2988, provided that: ‘‘The monthly equivalent of any additional com- pensation paid by reason of section 2002 of the Assist- ance for Unemployed Workers and Struggling Families Act, as contained in Public Law 111–5 (26 U.S.C. 3304 note; 123 Stat. 438 [437]) shall be disregarded after the date of the enactment of this Act [Nov. 6, 2009] in con- sidering the amount of income and assets of an indi- vidual for purposes of determining such individual’s eli- gibility for, or amount of, benefits under the Supple- mental Nutrition Assistance Program (SNAP).’’ INCREASE IN UNEMPLOYMENT COMPENSATION BENEFITS Pub. L. 111–5, div. B, title II, § 2002, Feb. 17, 2009, 123 Stat. 437, as amended by Pub. L. 111–118, div. B, § 1009(a)(2), Dec. 19, 2009, 123 Stat. 3471; Pub. L. 111–144, § 2(a)(2), Mar. 2, 2010, 124 Stat. 42; Pub. L. 111–157, § 2(a)(2), Apr. 15, 2010, 124 Stat. 1116, provided that: ‘‘(a) FEDERAL-STATE AGREEMENTS.—Any State which desires to do so may enter into and participate in an agreement under this section with the Secretary of Labor (hereinafter in this section referred to as the ‘Secretary’). Any State which is a party to an agree- ment under this section may, upon providing 30 days’ written notice to the Secretary, terminate such agree- ment. ‘‘(b) PROVISIONS OF AGREEMENT.— ‘‘(1) ADDITIONAL COMPENSATION.—Any agreement under this section shall provide that the State agen- cy of the State will make payments of regular com- pensation to individuals in amounts and to the extent that they would be determined if the State law of the State were applied, with respect to any week for which the individual is (disregarding this section) otherwise entitled under the State law to receive reg- ular compensation, as if such State law had been modified in a manner such that the amount of reg- ular compensation (including dependents’ allowances) payable for any week shall be equal to the amount determined under the State law (before the applica- tion of this paragraph) plus an additional $25. ‘‘(2) ALLOWABLE METHODS OF PAYMENT.—Any addi- tional compensation provided for in accordance with paragraph (1) shall be payable either— ‘‘(A) as an amount which is paid at the same time and in the same manner as any regular compensa- tion otherwise payable for the week involved; or ‘‘(B) at the option of the State, by payments which are made separately from, but on the same weekly basis as, any regular compensation other- wise payable. ‘‘(c) NONREDUCTION RULE.—An agreement under this section shall not apply (or shall cease to apply) with re- spect to a State upon a determination by the Secretary that the method governing the computation of regular compensation under the State law of that State has been modified in a manner such that— ‘‘(1) the average weekly benefit amount of regular compensation which will be payable during the period of the agreement (determined disregarding any addi- tional amounts attributable to the modification de- scribed in subsection (b)(1)) will be less than ‘‘(2) the average weekly benefit amount of regular compensation which would otherwise have been pay- able during such period under the State law, as in ef- fect on December 31, 2008. ‘‘(d) PAYMENTS TO STATES.— ‘‘(1) IN GENERAL.— ‘‘(A) FULL REIMBURSEMENT.—There shall be paid to each State which has entered into an agreement under this section an amount equal to 100 percent of— ‘‘(i) the total amount of additional compensa- tion (as described in subsection (b)(1)) paid to in- dividuals by the State pursuant to such agree- ment; and ‘‘(ii) any additional administrative expenses in- curred by the State by reason of such agreement (as determined by the Secretary). ‘‘(B) TERMS OF PAYMENTS.—Sums payable to any State by reason of such State’s having an agree- ment under this section shall be payable, either in advance or by way of reimbursement (as deter- mined by the Secretary), in such amounts as the Secretary estimates the State will be entitled to receive under this section for each calendar month, reduced or increased, as the case may be, by any amount by which the Secretary finds that his esti- mates 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 on the basis of such statistical, sampling, or other method as may be agreed upon by the Secretary and the State agency of the State involved. ‘‘(2) CERTIFICATIONS.—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. ‘‘(3) APPROPRIATION.—There are appropriated from the general fund of the Treasury, without fiscal year limitation, such sums as may be necessary for pur- poses of this subsection. ‘‘(e) APPLICABILITY.— ‘‘(1) IN GENERAL.—An agreement entered into under this section shall apply to weeks of unemployment— ‘‘(A) beginning after the date on which such agreement is entered into; and Page 2782 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘(B) ending on or before June 2, 2010. ‘‘(2) TRANSITION RULE FOR INDIVIDUALS REMAINING ENTITLED TO REGULAR COMPENSATION AS OF JUNE 2, 2010.—In the case of any individual who, as of the date specified in paragraph (1)(B), has not yet exhausted all rights to regular compensation under the State law of a State with respect to a benefit year that began before such date, additional compensation (as described in subsection (b)(1)) shall continue to be payable to such individual for any week beginning on or after such date for which the individual is other- wise eligible for regular compensation with respect to such benefit year. ‘‘(3) TERMINATION.—Notwithstanding any other pro- vision of this subsection, no additional compensation (as described in subsection (b)(1)) shall be payable for any week beginning after December 7, 2010. ‘‘(f) FRAUD AND OVERPAYMENTS.—The provisions of section 4005 of the Supplemental Appropriations Act, 2008 (Public Law 110–252; 122 Stat. 2356) [set out below] shall apply with respect to additional compensation (as described in subsection (b)(1)) to the same extent and in the same manner as in the case of emergency unem- ployment compensation. ‘‘(g) APPLICATION TO OTHER UNEMPLOYMENT BENE- FITS.— ‘‘(1) IN GENERAL.—Each agreement under this sec- tion shall include provisions to provide that the pur- poses of the preceding provisions of this section shall be applied with respect to unemployment benefits de- scribed in subsection (i)(3) to the same extent and in the same manner as if those benefits were regular compensation. ‘‘(2) ELIGIBILITY AND TERMINATION RULES.—Addi- tional compensation (as described in subsection (b)(1))— ‘‘(A) shall not be payable, pursuant to this sub- section, with respect to any unemployment benefits described in subsection (i)(3) for any week begin- ning on or after the date specified in subsection (e)(1)(B), except in the case of an individual who was eligible to receive additional compensation (as so described) in connection with any regular com- pensation or any unemployment benefits described in subsection (i)(3) for any period of unemployment ending before such date; and ‘‘(B) shall in no event be payable for any week be- ginning after the date specified in subsection (e)(3). ‘‘(h) DISREGARD OF ADDITIONAL COMPENSATION FOR PURPOSES OF MEDICAID AND SCHIP.—The monthly equivalent of any additional compensation paid under this section shall be disregarded in considering the amount of income of an individual for any purposes under title XIX and title XXI of the Social Security Act [42 U.S.C. 1396 et seq., 1397aa et seq.]. ‘‘(i) DEFINITIONS.—For purposes of this section— ‘‘(1) the terms ‘compensation’, ‘regular compensa- tion’, ‘benefit year’, ‘State’, ‘State agency’, ‘State law’, and ‘week’ have the respective meanings given such terms under section 205 of the Federal-State Ex- tended Unemployment Compensation Act of 1970 [Pub. L. 91–373] (26 U.S.C. 3304 note); ‘‘(2) the term ‘emergency unemployment compensa- tion’ means emergency unemployment compensation under title IV of the Supplemental Appropriations Act, 2008 (Public Law 110–252; 122 Stat. 2353) [set out below]; and ‘‘(3) any reference to unemployment benefits de- scribed in this paragraph shall be considered to refer to— ‘‘(A) extended compensation (as defined by sec- tion 205 of the Federal-State Extended Unemploy- ment Compensation Act of 1970 [Pub. L. 91–373, set out below]); and ‘‘(B) unemployment compensation (as defined by section 85(b) of the Internal Revenue Code of 1986) provided under any program administered by a State under an agreement with the Secretary.’’ [Pub. L. 111–157, § 2(c), Apr. 15, 2010, 124 Stat. 1117, pro- vided that: ‘‘The amendments made by this section [amending section 2002 of Pub. L. 111–5, set out above, and section 2005 of Pub. L. 111–5, section 5 of Pub. L. 110–449, and sections 4004 and 4007 of Pub. L. 110–252, set out below] shall take effect as if included in the enact- ment of the Temporary Extension Act of 2010 (Public Law 111–144).’’] FULL FEDERAL FUNDING OF EXTENDED UNEMPLOYMENT COMPENSATION FOR A LIMITED PERIOD Pub. L. 116–127, div. D, § 4105, Mar. 18, 2020, 134 Stat. 195, as amended by Pub. L. 116–260, div. N, title II, § 222, Dec. 27, 2020, 134 Stat. 1957; Pub. L. 117–2, title IX, § 9022(a), Mar. 11, 2021, 135 Stat. 120, provided that: ‘‘(a) IN GENERAL.—In the case of sharable extended compensation and sharable regular compensation paid for weeks of unemployment beginning after the date of the enactment of this section [Mar. 18, 2020] and before September 6, 2021 (and only with respect to States that receive emergency administration grant funding under clauses (i) and (ii) of section 903(h)(1)(C) of the Social Security Act (42 U.S.C. 1102(h)(1)(C) [1103(h)(1)(C)])), section 204(a)(1) of the Federal-State Extended Unem- ployment Compensation Act of 1970 [Pub. L. 91–373] (26 U.S.C. 3304 note) shall be applied by substituting ‘100 percent of’ for ‘one-half of’. ‘‘(b) TEMPORARY FEDERAL MATCHING FOR THE FIRST WEEK OF EXTENDED BENEFITS FOR STATES WITH NO WAITING WEEK.—With respect to weeks of unemploy- ment beginning after the date of the enactment of this Act and before September 6, 2021, subparagraph (B) of section 204(a)(2) of the Federal-State Extended Unem- ployment Compensation Act of 1970 (26 U.S.C. 3304 note) shall not apply. ‘‘(c) DEFINITIONS.—For purposes of this section— ‘‘(1) the terms ‘sharable extended compensation’ and ‘sharable regular compensation’ have the respec- tive meanings given such terms under section 204 of the Federal-State Extended Unemployment Com- pensation Act of 1970; and ‘‘(2) the term ‘week’ has the meaning given such term under section 205 of the Federal-State Extended Unemployment Compensation Act of 1970. ‘‘(d) REGULATIONS.—The Secretary of Labor may pre- scribe any operating instructions or regulations nec- essary to carry out this section.’’ [Pub. L. 117–2, title IX, § 9022(b), Mar. 11, 2021, 135 Stat. 120, provided that: ‘‘The amendment made by sub- section (a) [amending section 4105 of Pub. L. 116–127, set out above] shall apply as if included in the enactment of the Families First Coronavirus Response Act (Public Law 116–127).’’] Pub. L. 111–5, div. B, title II, § 2005, Feb. 17, 2009, 123 Stat. 444, as amended by Pub. L. 111–118, div. B, § 1009(a)(3), Dec. 19, 2009, 123 Stat. 3471; Pub. L. 111–144, § 2(a)(3), Mar. 2, 2010, 124 Stat. 42; Pub. L. 111–157, § 2(a)(3), Apr. 15, 2010, 124 Stat. 1116; Pub. L. 111–205, § 2(a)(2), July 22, 2010, 124 Stat. 2236; Pub. L. 111–312, title V, § 501(a)(2), Dec. 17, 2010, 124 Stat. 3307; Pub. L. 112–78, title II, § 201(a)(2), Dec. 23, 2011, 125 Stat. 1282; Pub. L. 112–96, title II, § 2123(a), Feb. 22, 2012, 126 Stat. 166; Pub. L. 112–240, title V, § 502(a), Jan. 2, 2013, 126 Stat. 2344, provided that: ‘‘(a) IN GENERAL.—In the case of sharable extended compensation and sharable regular compensation paid for weeks of unemployment beginning after the date of the enactment of this section [Feb. 17, 2009] and before December 31, 2013, section 204(a)(1) of the Federal-State Extended Unemployment Compensation Act of 1970 [Pub. L. 91–373] (26 U.S.C. 3304 note) shall be applied by substituting ‘100 percent of’ for ‘one-half of’. ‘‘(b) SPECIAL RULE.—At the option of a State, for any weeks of unemployment beginning after the date of the enactment of this section [Feb. 17, 2009] and before De- cember 31, 2013, an individual’s eligibility period (as de- scribed in section 203(c) of the Federal-State Extended Unemployment Compensation Act of 1970 [Pub. L. 91–373, set out below]) shall, for purposes of any deter- mination of eligibility for extended compensation under the State law of such State, be considered to in- clude any week which begins— Page 2783 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘(1) after the date as of which such individual ex- hausts all rights to emergency unemployment com- pensation; and ‘‘(2) during an extended benefit period that began on or before the date described in paragraph (1). ‘‘(c) LIMITED EXTENSION.—In the case of an individual who receives extended compensation with respect to 1 or more weeks of unemployment beginning after the date of the enactment of this Act [Feb. 17, 2009] and be- fore December 31, 2013, the provisions of subsections (a) and (b) shall, at the option of a State, be applied by substituting ‘ending before June 30, 2014’ for ‘before De- cember 31, 2013’. ‘‘(d) EXTENSION OF TEMPORARY FEDERAL MATCHING FOR THE FIRST WEEK OF EXTENDED BENEFITS FOR STATES WITH NO WAITING WEEK.— ‘‘(1) IN GENERAL.—[Amended section 5 of Pub. L. 110–449, set out below.] ‘‘(2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall take effect as if included in the enactment of the Unemployment Compensation Ex- tension Act of 2008 (Public Law 110–449). ‘‘(e) DEFINITIONS.—For purposes of this section— ‘‘(1) the terms ‘sharable extended compensation’ and ‘sharable regular compensation’ have the respec- tive meanings given such terms under section 204 of the Federal-State Extended Unemployment Com- pensation Act of 1970 [Pub. L. 91–373, set out below]; ‘‘(2) the terms ‘extended compensation’, ‘State’, ‘State law’, and ‘week’ have the respective meanings given such terms under section 205 of the Federal- State Extended Unemployment Compensation Act of 1970 [Pub. L. 91–373, set out below]; ‘‘(3) the term ‘emergency unemployment compensa- tion’ means benefits payable to individuals under title IV of the Supplemental Appropriations Act, 2008 [Pub. L. 110–252, set out below] with respect to their unemployment; and ‘‘(4) the term ‘extended benefit period’ means an ex- tended benefit period as determined in accordance with applicable provisions of the Federal-State Ex- tended Unemployment Compensation Act of 1970 [title II of Pub. L. 91–373, set out below]. ‘‘(f) REGULATIONS.—The Secretary of Labor may pre- scribe any operating instructions or regulations nec- essary to carry out this section.’’ [Pub. L. 112–240, title V, § 502(d), Jan. 2, 2013, 126 Stat. 2344, provided that: ‘‘The amendments made by this section [amending section 2005 of Pub. L. 111–5, set out above, and section 5 of Pub. L. 110–449 and section 203 of Pub. L. 91–373, set out below] shall take effect as if included in the enactment of the Unemployment Bene- fits Extension Act of 2012 ([subtitle B of title II of] Pub- lic Law 112–96).’’] [Pub. L. 112–96, title II, § 2123(d), Feb. 22, 2012, 126 Stat. 167, provided that: ‘‘The amendments made by this section [amending section 2005 of Pub. L. 111–5, set out above, and section 5 of Pub. L. 110–449 and section 203 of Pub. L. 91–373, set out below] shall take effect as if included in the enactment of the Temporary Payroll Tax Cut Continuation Act of 2011 (Public Law 112–78).’’] [Pub. L. 112–78, title II, § 201(c), Dec. 23, 2011, 125 Stat. 1283, provided that: ‘‘The amendments made by this section [amending section 2005 of Pub. L. 111–5, set out above, section 5 of Pub. L. 110–449, sections 4004 and 4007 of Pub. L. 110–252, and section 203 of Pub. L. 91–373, set out below] shall take effect as if included in the enact- ment of the Tax Relief, Unemployment Insurance Re- authorization, and Job Creation Act of 2010 (Public Law 111–312).’’] [Pub. L. 111–312, title V, § 501(c), Dec. 17, 2010, 124 Stat. 3307, provided that: ‘‘The amendments made by this section [amending section 2005 of Pub. L. 111–5, set out above, and section 5 of Pub. L. 110–449 and sections 4004 and 4007 of Pub. L. 110–252, set out below] shall take ef- fect as if included in the enactment of the Unemploy- ment Compensation Extension Act of 2010 (Public Law 111–205).’’] [Pub. L. 111–205, § 2(d), July 22, 2010, 124 Stat. 2237, pro- vided that: ‘‘The amendments made by this section [amending section 2005 of Pub. L. 111–5, set out above, and section 5 of Pub. L. 110–449 and sections 4001, 4004, and 4007 of Pub. L. 110–252, set out below] shall take ef- fect as if included in the enactment of the Continuing Extension Act of 2010 (Public Law 111–157).’’] [Amendment by Pub. L. 111–157 to section 2005 of Pub. L. 111–5, set out above, effective as if included in the enactment of Pub. L. 111–144, see section 2(c) of Pub. L. 111–157, set out following section 2002 of Pub. L. 111–5 above.] TEMPORARY FEDERAL MATCHING FOR THE FIRST WEEK OF EXTENDED BENEFITS FOR STATES WITH NO WAIT- ING WEEK Pub. L. 110–449, § 5, Nov. 21, 2008, 122 Stat. 5015; as amended by Pub. L. 111–5, div. B, title II, § 2005(d)(1), Feb. 17, 2009, 123 Stat. 444; Pub. L. 111–118, div. B, § 1009(a)(4), Dec. 19, 2009, 123 Stat. 3471; Pub. L. 111–144, § 2(a)(4), Mar. 2, 2010, 124 Stat. 42; Pub. L. 111–157, § 2(a)(4), Apr. 15, 2010, 124 Stat. 1116; Pub. L. 111–205, § 2(a)(3), July 22, 2010, 124 Stat. 2236; Pub. L. 111–312, title V, § 501(a)(3), Dec. 17, 2010, 124 Stat. 3307; Pub. L. 112–78, title II, § 201(a)(3), Dec. 23, 2011, 125 Stat. 1282; Pub. L. 112–96, title II, § 2123(b), Feb. 22, 2012, 126 Stat. 167; Pub. L. 112–240, title V, § 502(b), Jan. 2, 2013, 126 Stat. 2344, provided that: ‘‘With respect to weeks of un- employment beginning after the date of the enactment of this Act [Nov. 21, 2008] and ending on or before June 30, 2014, subparagraph (B) of section 204(a)(2) of the Fed- eral-State Extended Unemployment Compensation Act of 1970 [title II of Pub. L. 91–373] (26 U.S.C. 3304 note) shall not apply.’’ [Amendment by section 502(b) of Pub. L. 112–240 to section 5 of Pub. L. 110–449, set out above, effective as if included in the enactment of subtitle B of title II of Pub. L. 112–96, see section 502(d) of Pub. L. 112–240, set out following section 2005 of Pub. L. 111–5 above.] [Amendment by section 2123(b) of Pub. L. 112–96 to section 5 of Pub. L. 110–449, set out above, effective as if included in the enactment of Pub. L. 112–78, see sec- tion 2123(d) of Pub. L. 112–96, set out following section 2005 of Pub. L. 111–5 above.] [Amendment by section 201(a)(3) of Pub. L. 112–78 to section 5 of Pub. L. 110–449, set out above, effective as if included in the enactment of Pub. L. 111–312, see sec- tion 201(c) of Pub. L. 112–78, set out following section 2005 of Pub. L. 111–5 above.] [Amendment by section 501(a)(3) of Pub. L. 111–312 to section 5 of Pub. L. 110–449, set out above, effective as if included in the enactment of Pub. L. 111–205, see sec- tion 501(c) of Pub. L. 111–312, set out following section 2005 of Pub. L. 111–5 above.] [Amendment by section 2(a)(3) of Pub. L. 111–205 to section 5 of Pub. L. 110–449, set out above, effective as if included in the enactment of Pub. L. 111–157, see sec- tion 2(d) of Pub. L. 111–205, set out following section 2005 of Pub. L. 111–5 above.] [Amendment by section 2(a)(4) of Pub. L. 111–157 to section 5 of Pub. L. 110–449, set out above, effective as if included in the enactment of Pub. L. 111–144, see sec- tion 2(c) of Pub. L. 111–157, set out following section 2002 of Pub. L. 111–5 above.] EMERGENCY UNEMPLOYMENT COMPENSATION, 2008 Pub. L. 110–252, title IV, June 30, 2008, 122 Stat. 2353, as amended by Pub. L. 110–449, §§ 2–4, Nov. 21, 2008, 122 Stat. 5014, 5015; Pub. L. 111–5, div. B, title II, § 2001, Feb. 17, 2009, 123 Stat. 436; Pub. L. 111–92, §§ 2(a), 3(a), (b), 4(a), (b), 5, 6, Nov. 6, 2009, 123 Stat. 2984–2987; Pub. L. 111–118, div. B, § 1009(a)(1), (b), Dec. 19, 2009, 123 Stat. 3471; Pub. L. 111–144, § 2(a)(1), (b), Mar. 2, 2010, 124 Stat. 42; Pub. L. 111–157, § 2(a)(1), (b), Apr. 15, 2010, 124 Stat. 1116; Pub. L. 111–205, §§ 2(a)(1), (b), (c), 3(a), 4, July 22, 2010, 124 Stat. 2236–2238; Pub. L. 111–312, title V, § 501(a)(1), (b), Dec. 17, 2010, 124 Stat. 3307; Pub. L. 112–78, title II, § 201(a)(1), (b), Dec. 23, 2011, 125 Stat. 1282, 1283; Pub. L. 112–96, title II, §§ 2122(a)–(e), 2141, 2142(a), (c), 2143, 2181(b), Feb. 22, 2012, 126 Stat. 163–166, 168–170, 180; Pub. L. 112–240, title V, §§ 501(a), (b), 503(a), Jan. 2, 2013, 126 Stat. 2343, 2344, provided that: Page 2784 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘FEDERAL-STATE AGREEMENTS ‘‘SEC. 4001. (a) IN GENERAL.—Any State which desires to do so may enter into and participate in an agree- ment under this title with the Secretary of Labor (in this title referred to as the ‘Secretary’). Any State which is a party to an agreement under this title may, upon providing 30 days’ written notice to the Sec- retary, terminate such agreement. ‘‘(b) PROVISIONS OF AGREEMENT.—Any agreement under subsection (a) shall provide that the State agen- cy of the State will make payments of emergency un- employment compensation to individuals who— ‘‘(1) have exhausted all rights to regular compensa- tion under the State law or under Federal law with respect to a benefit year (excluding any benefit year that ended before May 1, 2007); ‘‘(2) have no rights to regular compensation with respect to a week under such law or any other State unemployment compensation law or to compensation under any other Federal law; ‘‘(3) are not receiving compensation with respect to such week under the unemployment compensation law of Canada; and ‘‘(4) are able to work, available to work, and ac- tively seeking work. ‘‘(c) EXHAUSTION OF BENEFITS.—For purposes of sub- section (b)(1), an individual shall be deemed to have ex- hausted such individual’s rights to regular compensa- tion under a State law when— ‘‘(1) no payments of regular compensation can be made under such law because such individual has re- ceived all regular compensation available to such in- dividual based on employment or wages during such individual’s base period; or ‘‘(2) such individual’s rights to such compensation have been terminated by reason of the expiration of the benefit year with respect to which such rights ex- isted. ‘‘(d) WEEKLY BENEFIT AMOUNT, ETC.—For purposes of any agreement under this title— ‘‘(1) the amount of emergency unemployment com- pensation which shall be payable to any individual for any week of total unemployment shall be equal to the amount of the regular compensation (including dependents’ allowances) payable to such individual during such individual’s benefit year under the State law for a week of total unemployment; ‘‘(2) the terms and conditions of the State law which apply to claims for regular compensation and to the payment thereof (including terms and condi- tions relating to availability for work, active search for work, and refusal to accept work) shall apply to claims for emergency unemployment compensation and the payment thereof, except— ‘‘(A) that an individual shall not be eligible for emergency unemployment compensation under this title unless, in the base period with respect to which the individual exhausted all rights to regular compensation under the State law, the individual had 20 weeks of full-time insured employment or the equivalent in insured wages, as determined under the provisions of the State law implementing section 202(a)(5) of the Federal-State Extended Un- employment Compensation Act of 1970 [Pub. L. 91–373] (26 U.S.C. 3304 note); and ‘‘(B) where otherwise inconsistent with the provi- sions of this title or with the regulations or oper- ating instructions of the Secretary promulgated to carry out this title; and ‘‘(3) the maximum amount of emergency unemploy- ment compensation payable to any individual for whom an emergency unemployment compensation account is established under section 4002 shall not ex- ceed the amount established in such account for such individual. ‘‘(e) COORDINATION RULE.—An agreement under this section shall apply with respect to a State only upon a determination by the Secretary that, under the State law or other applicable rules of such State, the pay- ment of extended compensation for which an individual is otherwise eligible must be deferred until after the payment of any emergency unemployment compensa- tion under section 4002, as amended by the Unemploy- ment Benefits Extension Act of 2012 [subtitle B of title II of Pub. L. 112–96], for which the individual is concur- rently eligible. ‘‘(f) UNAUTHORIZED ALIENS INELIGIBLE.—A State shall require as a condition of eligibility for emergency un- employment compensation under this Act [probably means ‘‘this title’’] that each alien who receives such compensation must be legally authorized to work in the United States, as defined for purposes of the Fed- eral Unemployment Tax Act (26 U.S.C. 3301 et seq.). In determining whether an alien meets the requirements of this subsection, a State must follow the procedures provided in section 1137(d) of the Social Security Act (42 U.S.C. 1320b–7(d)). ‘‘(g) NONREDUCTION RULE.—An agreement under this section shall not apply (or shall cease to apply) with re- spect to a State upon a determination by the Secretary that the method governing the computation of regular compensation under the State law of that State has been modified in a manner such that— ‘‘(1) the average weekly benefit amount of regular compensation which will be payable during the period of the agreement occurring on or after June 2, 2010 (determined disregarding any additional amounts at- tributable to the modification described in section 2002(b)(1) of the Assistance for Unemployed Workers and Struggling Families Act, as contained in Public Law 111–5 (26 U.S.C. 3304 note; 123 Stat. 438)), will be less than ‘‘(2) the average weekly benefit amount of regular compensation which would otherwise have been pay- able during such period under the State law, as in ef- fect on June 2, 2010. ‘‘(h) ACTIVELY SEEKING WORK.— ‘‘(1) IN GENERAL.—For purposes of subsection (b)(4), the term ‘actively seeking work’ means, with respect to any individual, that such individual— ‘‘(A) is registered for employment services in such a manner and to such extent as prescribed by the State agency; ‘‘(B) has engaged in an active search for employ- ment that is appropriate in light of the employ- ment available in the labor market, the individ- ual’s skills and capabilities, and includes a number of employer contacts that is consistent with the standards communicated to the individual by the State; ‘‘(C) has maintained a record of such work search, including employers contacted, method of contact, and date contacted; and ‘‘(D) when requested, has provided such work search record to the State agency. ‘‘(2) RANDOM AUDITING.—The Secretary shall estab- lish for each State a minimum number of claims for which work search records must be audited on a ran- dom basis in any given week. ‘‘(i) PROVISION OF SERVICES AND ACTIVITIES.— ‘‘(1) IN GENERAL.—An agreement under this section shall require the following: ‘‘(A) The State which is party to such agreement shall provide reemployment services and reemploy- ment and eligibility assessment activities to each individual— ‘‘(i) who, on or after the 30th day after the date of enactment of the Extended Benefits, Reem- ployment, and Program Integrity Improvement Act [Feb. 22, 2012], begins receiving amounts de- scribed in subsections (b) and (c); and ‘‘(ii) while such individual continues to receive emergency unemployment compensation under this title. ‘‘(B) As a condition of eligibility for emergency unemployment compensation for any week— ‘‘(i) a claimant who has been duly referred to reemployment services shall participate in such services; and Page 2785 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘(ii) a claimant shall be actively seeking work (determined applying subsection (i) [probably means subsection (h)]). ‘‘(2) DESCRIPTION OF SERVICES AND ACTIVITIES.—The reemployment services and in-person reemployment and eligibility assessment activities provided to indi- viduals receiving emergency unemployment com- pensation described in paragraph (1)— ‘‘(A) shall include— ‘‘(i) the provision of labor market and career in- formation; ‘‘(ii) an assessment of the skills of the indi- vidual; ‘‘(iii) orientation to the services available through the one-stop centers established under title I of the Workforce Investment Act of 1998 [former 29 U.S.C. 2801 et seq.]; and ‘‘(iv) review of the eligibility of the individual for emergency unemployment compensation re- lating to the job search activities of the indi- vidual; and ‘‘(B) may include the provision of— ‘‘(i) comprehensive and specialized assessments; ‘‘(ii) individual and group career counseling; ‘‘(iii) training services; ‘‘(iv) additional reemployment services; and ‘‘(v) job search counseling and the development or review of an individual reemployment plan that includes participation in job search activi- ties and appropriate workshops. ‘‘(3) PARTICIPATION REQUIREMENT.—As a condition of continuing eligibility for emergency unemployment compensation for any week, an individual who has been referred to reemployment services or reemploy- ment and eligibility assessment activities under this subsection shall participate in such services or ac- tivities, unless the State agency responsible for the administration of State unemployment compensation law determines that— ‘‘(A) such individual has completed participating in such services or activities; or ‘‘(B) there is justifiable cause for failure to par- ticipate or to complete participating in such serv- ices or activities, as determined in accordance with guidance to be issued by the Secretary. ‘‘(j) AUTHORITY TO CONDUCT SELF-EMPLOYMENT AS- SISTANCE PROGRAM.— ‘‘(1) IN GENERAL.— ‘‘(A) ESTABLISHMENT.—Any agreement under sub- section (a) may provide that the State agency of the State shall establish a self-employment assist- ance program, as described in paragraph (2), to pro- vide for the payment of emergency unemployment compensation as self-employment assistance allow- ances to individuals who would otherwise satisfy the eligibility criteria specified in subsection (b). ‘‘(B) PAYMENT OF ALLOWANCES.—Subject to sub- paragraph (C), the self-employment assistance al- lowance described in subparagraph (A) shall be paid to an eligible individual from such individual’s emergency unemployment compensation account, as described in section 4002, and the amount in such account shall be reduced accordingly. ‘‘(C) LIMITATION ON SELF-EMPLOYMENT ASSISTANCE FOR INDIVIDUALS RECEIVING EXTENDED COMPENSATION AND EMERGENCY UNEMPLOYMENT COMPENSATION.— ‘‘(i) COMBINED ELIGIBILITY LIMIT.—Subject to clause (ii), for purposes of self-employment assist- ance programs established under this subsection and section 208 of the Federal-State Extended Un- employment Compensation Act of 1970 [Pub. L. 91–373, set out below], an individual shall be pro- vided with self-employment assistance allowances under such programs for a total of not greater than 26 weeks (referred to in this subsection as the ‘combined eligibility limit’). ‘‘(ii) CARRYOVER RULE.—For purposes of an indi- vidual who is participating in a self-employment assistance program established under this sub- section and has not reached the combined eligi- bility limit as of the date on which such indi- vidual exhausts all rights to extended compensa- tion under this title, the individual shall be eligi- ble to receive self-employment assistance allow- ances under a self-employment assistance pro- gram established under section 208 of the Federal- State Extended Unemployment Compensation Act of 1970 until such individual has reached the combined eligibility limit, provided that the indi- vidual otherwise satisfies the eligibility criteria described under title II of such Act [probably means title II of Pub. L. 91–373, set out below]. ‘‘(2) DEFINITION OF ‘SELF-EMPLOYMENT ASSISTANCE PROGRAM’.—For the purposes of this section, the term ‘self-employment assistance program’ means a pro- gram as defined under section 3306(t) of the Internal Revenue Code of 1986, except as follows: ‘‘(A) all references to ‘regular unemployment compensation under the State law’ shall be deemed to refer instead to ‘emergency unemployment com- pensation under title IV of the Supplemental Ap- propriations Act, 2008’ [this note]; ‘‘(B) paragraph (3)(B) shall not apply; ‘‘(C) clause (i) of paragraph (3)(C) shall be deemed to state as follows: ‘‘ ‘(i) include any entrepreneurial training that the State or non-profit organizations may provide in coordination with programs of training offered by the Small Business Administration, which may include business counseling, mentorship for participants, access to small business develop- ment resources, and technical assistance; and’; ‘‘(D) the reference to ‘5 percent’ in paragraph (4) shall be deemed to refer instead to ‘1 percent’; and ‘‘(E) paragraph (5) shall not apply. ‘‘(3) AVAILABILITY OF SELF-EMPLOYMENT ASSISTANCE ALLOWANCES.—In the case of an individual who is eli- gible to receive emergency unemployment compensa- tion payment under this title, such individual shall not receive self-employment assistance allowances under this subsection unless the State agency has a reasonable expectation that such individual will be entitled to at least 13 times the individual’s average weekly benefit amount of extended compensation and emergency unemployment compensation. ‘‘(4) PARTICIPANT OPTION TO TERMINATE PARTICIPA- TION IN SELF-EMPLOYMENT ASSISTANCE PROGRAM.— ‘‘(A) TERMINATION.—An individual who is partici- pating in a self-employment assistance program es- tablished under this subsection may elect to dis- continue participation in such program at any time. ‘‘(B) CONTINUED ELIGIBILITY FOR EMERGENCY UNEM- PLOYMENT COMPENSATION.—For purposes of an indi- vidual whose participation in the self-employment assistance program established under this sub- section is terminated pursuant to paragraph (1)(C) or who has discontinued participation in such pro- gram, if the individual continues to satisfy the eli- gibility requirements for emergency unemployment compensation under this title, the individual shall receive emergency unemployment compensation payments with respect to subsequent weeks of un- employment, to the extent that amounts remain in the account established for such individual under section 4002(b) or to the extent that such individual commences receiving the amounts described in sub- sections (c), (d), or (e) of such section, respectively. ‘‘EMERGENCY UNEMPLOYMENT COMPENSATION ACCOUNT ‘‘SEC. 4002. (a) IN GENERAL.—Any agreement under this title shall provide that the State will establish, for each eligible individual who files an application for emergency unemployment compensation, an emer- gency unemployment compensation account with re- spect to such individual’s benefit year. ‘‘(b) AMOUNT IN ACCOUNT.— ‘‘(1) IN GENERAL.—The amount established in an ac- count under subsection (a) shall be equal to the lesser of— Page 2786 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘(A) 80 percent of the total amount of regular compensation (including dependents’ allowances) payable to the individual during the individual’s benefit year under such law, or ‘‘(B) 20 times the individual’s average weekly ben- efit amount for the benefit year. ‘‘(2) SPECIAL RULE RELATING TO AMOUNTS ESTAB- LISHED IN AN ACCOUNT AS OF A WEEK ENDING AFTER SEP- TEMBER 2, 2012.—Notwithstanding any provision of paragraph (1), in the case of any account established as of a week ending after September 2, 2012— ‘‘(A) paragraph (1)(A) shall be applied by sub- stituting ‘54 percent’ for ‘80 percent’; and ‘‘(B) paragraph (1)(B) shall be applied by sub- stituting ‘14 weeks’ for ‘20 weeks’ [probably should be ‘‘ ‘14 times’ for ‘20 times’ ’’]. ‘‘(3) WEEKLY BENEFIT AMOUNT.—For purposes of this subsection, an individual’s weekly benefit amount for any week is the amount of regular compensation (in- cluding dependents’ allowances) under the State law payable to such individual for such week for total un- employment. ‘‘(c) SECOND-TIER EMERGENCY UNEMPLOYMENT COM- PENSATION.— ‘‘(1) IN GENERAL.—If, at the time that the amount established in an individual’s account under sub- section (b) is exhausted or at any time thereafter, such individual’s State is in an extended benefit pe- riod (as determined under paragraph (2)), such ac- count shall be augmented by an amount (hereinafter ‘second-tier emergency unemployment compensa- tion’) equal to the lesser of— ‘‘(A) 54 percent of the total amount of regular compensation (including dependents’ allowances) payable to the individual during the individual’s benefit year under the State law, or ‘‘(B) 14 times the individual’s average weekly ben- efit amount (as determined under subsection (b)(2)) for the benefit year. ‘‘(2) EXTENDED BENEFIT PERIOD.—For purposes of paragraph (1), a State shall be considered to be in an extended benefit period, as of any given time, if such a period would then be in effect for such State under such Act [probably means title II of Pub. L. 91–373] if— ‘‘(A) section 203(f) of the Federal-State Extended Unemployment Compensation Act of 1970 [Pub. L. 91–373, set out below] were applied to such State (regardless of whether the State by law had pro- vided for such application); and ‘‘(B) such section 203(f)— ‘‘(i) were applied by substituting the applicable percentage under paragraph (3) for ‘6.5 percent’ in paragraph (1)(A)(i) thereof; and ‘‘(ii) did not include the requirement under paragraph (1)(A)(ii) thereof. ‘‘(3) APPLICABLE PERCENTAGE.—The applicable per- centage under this paragraph is, for purposes of de- termining if a State is in an extended benefit period as of a date occurring in a week ending— ‘‘(A) before June 1, 2012, 0 percent; and ‘‘(B) after the last week under subparagraph (A), 6 percent. ‘‘(4) LIMITATION.—The account of an individual may be augmented not more than once under this sub- section. ‘‘(d) THIRD-TIER EMERGENCY UNEMPLOYMENT COM- PENSATION.— ‘‘(1) IN GENERAL.—If, at the time that the amount added to an individual’s account under subsection (c)(1) (hereinafter ‘second-tier emergency unemploy- ment compensation’) is exhausted or at any time thereafter, such individual’s State is in an extended benefit period (as determined under paragraph (2)), such account shall be further augmented by an amount (hereinafter ‘third-tier emergency unemploy- ment compensation’) equal to the lesser of— ‘‘(A) 50 percent of the total amount of regular compensation (including dependents’ allowances) payable to the individual during the individual’s benefit year under the State law; or ‘‘(B) 13 times the individual’s average weekly ben- efit amount (as determined under subsection (b)(2) [probably should be ‘‘(b)(3)’’]) for the benefit year. ‘‘(2) EXTENDED BENEFIT PERIOD.—For purposes of paragraph (1), a State shall be considered to be in an extended benefit period, as of any given time, if— ‘‘(A) such a period would then be in effect for such State under the Federal-State Extended Unemploy- ment Compensation Act of 1970 [title II of Pub. L. 91–373, set out below] if section 203(d) of such Act— ‘‘(i) were applied by substituting ‘4’ for ‘5’ each place it appears; and ‘‘(ii) did not include the requirement under paragraph (1)(A) thereof; or ‘‘(B) such a period would then be in effect for such State under such Act if— ‘‘(i) section 203(f) of such Act were applied to such State (regardless of whether the State by law had provided for such application); and ‘‘(ii) such section 203(f)— ‘‘(I) were applied by substituting the applica- ble percentage under paragraph (3) for ‘6.5 per- cent’ in paragraph (1)(A)(i) thereof; and ‘‘(II) did not include the requirement under paragraph (1)(A)(ii) thereof. ‘‘(3) APPLICABLE PERCENTAGE.—The applicable per- centage under this paragraph is, for purposes of de- termining if a State is in an extended benefit period as of a date occurring in a week ending— ‘‘(A) before June 1, 2012, 6 percent; and ‘‘(B) after the last week under subparagraph (A), 7 percent. ‘‘(4) LIMITATION.—The account of an individual may be augmented not more than once under this sub- section. ‘‘(5) SPECIAL RULE RELATING TO AMOUNTS ADDED TO AN ACCOUNT AS OF A WEEK ENDING AFTER SEPTEMBER 2, 2012.—Notwithstanding any provision of paragraph (1), if augmentation under this subsection occurs as of a week ending after September 2, 2012— ‘‘(A) paragraph (1)(A) shall be applied by sub- stituting ‘35 percent’ for ‘50 percent’; and ‘‘(B) paragraph (1)(B) shall be applied by sub- stituting ‘9 times’ for ‘13 times’. ‘‘(e) FOURTH-TIER EMERGENCY UNEMPLOYMENT COM- PENSATION.— ‘‘(1) IN GENERAL.—If, at the time that the amount added to an individual’s account under subsection (d)(1) (third-tier emergency unemployment com- pensation) is exhausted or at any time thereafter, such individual’s State is in an extended benefit pe- riod (as determined under paragraph (2)), such ac- count shall be further augmented by an amount (hereinafter ‘fourth-tier emergency unemployment compensation’) equal to the lesser of— ‘‘(A) 24 percent of the total amount of regular compensation (including dependents’ allowances) payable to the individual during the individual’s benefit year under the State law; or ‘‘(B) 6 times the individual’s average weekly ben- efit amount (as determined under subsection (b)(2) [probably should be ‘‘(b)(3)’’]) for the benefit year. ‘‘(2) EXTENDED BENEFIT PERIOD.—For purposes of paragraph (1), a State shall be considered to be in an extended benefit period, as of any given time, if— ‘‘(A) such a period would then be in effect for such State under the Federal-State Extended Unemploy- ment Compensation Act of 1970 [title II of Pub. L. 91–373, set out below] if section 203(d) of such Act— ‘‘(i) were applied by substituting ‘6’ for ‘5’ each place it appears; and ‘‘(ii) did not include the requirement under paragraph (1)(A) thereof; or ‘‘(B) such a period would then be in effect for such State under such Act if— ‘‘(i) section 203(f) of such Act were applied to such State (regardless of whether the State by law had provided for such application); and ‘‘(ii) such section 203(f)— ‘‘(I) were applied by substituting the applica- ble percentage under paragraph (3) for ‘6.5 per- cent’ in paragraph (1)(A)(i) thereof; and Page 2787 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘(II) did not include the requirement under paragraph (1)(A)(ii) thereof. ‘‘(3) APPLICABLE PERCENTAGE.—The applicable per- centage under this paragraph is, for purposes of de- termining if a State is in an extended benefit period as of a date occurring in a week ending— ‘‘(A) before June 1, 2012, 8.5 percent; and ‘‘(B) after the last week under subparagraph (A), 9 percent. ‘‘(4) LIMITATION.—The account of an individual may be augmented not more than once under this sub- section. ‘‘(5) SPECIAL RULES RELATING TO AMOUNTS ADDED TO AN ACCOUNT.— ‘‘(A) MARCH TO MAY OF 2012.— ‘‘(i) SPECIAL RULE.—Notwithstanding any provi- sion of paragraph (1) but subject to the following 2 sentences, if augmentation under this sub- section occurs as of a week ending after the date of enactment of this paragraph [Feb. 22, 2012] and before June 1, 2012 (or if, as of such date of enact- ment, any fourth-tier amounts remain in the in- dividual’s account)— ‘‘(I) paragraph (1)(A) shall be applied by sub- stituting ‘62 percent’ for ‘24 percent’; and ‘‘(II) paragraph (1)(B) shall be applied by sub- stituting ‘16 times’ for ‘6 times’. The preceding sentence shall apply only if, at the time that the account would be augmented under this subparagraph, such individual’s State is not in an extended benefit period as determined under the Federal-State Extended Unemployment Com- pensation Act of 1970 [title II of Pub. L. 91–373, set out below]. In no event shall the total amount added to the account of an individual under this subparagraph cause, in the case of an individual described in the parenthetical matter in the first sentence of this clause, the sum of the total amount previously added to such individual’s ac- count under this subsection (as in effect before the date of enactment of this paragraph) and any further amounts added as a result of the enact- ment of this clause, to exceed the total amount allowable under subclause (I) or (II), as the case may be. ‘‘(ii) LIMITATION.—Notwithstanding any other provision of this title, the amounts added to the account of an individual under this subparagraph may not cause the sum of the amounts previously established in or added to such account, plus any weeks of extended benefits provided to such indi- vidual under the Federal-State Extended Unem- ployment Compensation Act of 1970 [title II of Pub. L. 91–373, set out below] (based on the same exhaustion of regular compensation under section 4001(b)(1)), to in the aggregate exceed the lesser of— ‘‘(I) 282 percent of the total amount of regular compensation (including dependents’ allow- ances) payable to the individual during the indi- vidual’s benefit year under the State law; or ‘‘(II) 73 times the individual’s average weekly benefit amount (as determined under subsection (b)(3)) for the benefit year. ‘‘(B) AFTER AUGUST OF 2012.—Notwithstanding any provision of paragraph (1), if augmentation under this subsection occurs as of a week ending after September 2, 2012— ‘‘(i) paragraph (1)(A) shall be applied by sub- stituting ‘39 percent’ for ‘24 percent’; and ‘‘(ii) paragraph (1)(B) shall be applied by sub- stituting ‘10 times’ for ‘6 times’. ‘‘(f) COORDINATION RULES.— ‘‘(1) COORDINATION WITH EXTENDED COMPENSATION.— Notwithstanding an election under section 4001(e) by a State to provide for the payment of emergency un- employment compensation prior to extended com- pensation, such State may pay extended compensa- tion to an otherwise eligible individual prior to any emergency unemployment compensation under sub- section (c), (d), or (e) (by reason of the amendments made by sections 2, 3, and 4 of the Worker, Home- ownership, and Business Assistance Act of 2009 [Pub. L. 111–92]), if such individual claimed extended com- pensation for at least 1 week of unemployment after the exhaustion of emergency unemployment com- pensation under subsection (b) (as such subsection was in effect on the day before the date of the enact- ment of this subsection [Nov. 6, 2009]). ‘‘(2) COORDINATION WITH TIERS II, III, AND IV.—If a State determines that implementation of the in- creased entitlement to second-tier emergency unem- ployment compensation by reason of the amendments made by section 2 of the Worker, Homeownership, and Business Assistance Act of 2009 [Pub. L. 111–92] would unduly delay the prompt payment of emer- gency unemployment compensation under this title by reason of the amendments made by such Act, such State may elect to pay third-tier emergency unem- ployment compensation prior to the payment of such increased second-tier emergency unemployment com- pensation until such time as such State determines that such increased second-tier emergency unemploy- ment compensation may be paid without such undue delay. If a State makes the election under the pre- ceding sentence, then, for purposes of determining whether an account may be augmented for fourth-tier emergency unemployment compensation under sub- section (e), such State shall treat the date of exhaus- tion of such increased second-tier emergency unem- ployment compensation as the date of exhaustion of third-tier emergency unemployment compensation, if such date is later than the date of exhaustion of the third-tier emergency unemployment compensation. ‘‘(g) COORDINATION OF EMERGENCY UNEMPLOYMENT COMPENSATION WITH REGULAR COMPENSATION.— ‘‘(1) If— ‘‘(A) an individual has been determined to be enti- tled to emergency unemployment compensation with respect to a benefit year, ‘‘(B) that benefit year has expired, ‘‘(C) that individual has remaining entitlement to emergency unemployment compensation with re- spect to that benefit year, and ‘‘(D) that individual would qualify for a new ben- efit year in which the weekly benefit amount of regular compensation is at least either $100 or 25 percent less than the individual’s weekly benefit amount in the benefit year referred to in subpara- graph (A), then the State shall determine eligibility for com- pensation as provided in paragraph (2). ‘‘(2) For individuals described in paragraph (1), the State shall determine whether the individual is to be paid emergency unemployment compensation or reg- ular compensation for a week of unemployment using one of the following methods: ‘‘(A) The State shall, if permitted by State law, establish a new benefit year, but defer the payment of regular compensation with respect to that new benefit year until exhaustion of all emergency un- employment compensation payable with respect to the benefit year referred to in paragraph (1)(A); ‘‘(B) The State shall, if permitted by State law, defer the establishment of a new benefit year (which uses all the wages and employment which would have been used to establish a benefit year but for the application of this paragraph), until ex- haustion of all emergency unemployment com- pensation payable with respect to the benefit year referred to in paragraph(1)(A); ‘‘(C) The State shall pay, if permitted by State law— ‘‘(i) regular compensation equal to the weekly benefit amount established under the new benefit year, and ‘‘(ii) emergency unemployment compensation equal to the difference between that weekly ben- efit amount and the weekly benefit amount for the expired benefit year; or Page 2788 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘(D) The State shall determine rights to emer- gency unemployment compensation without regard to any rights to regular compensation if the indi- vidual elects to not file a claim for regular com- pensation under the new benefit year. ‘‘PAYMENTS TO STATES HAVING AGREEMENTS FOR THE PAYMENT OF EMERGENCY UNEMPLOYMENT COMPENSATION ‘‘SEC. 4003. (a) GENERAL RULE.—There shall be paid to each State that has entered into an agreement under this title an amount equal to 100 percent of the emer- gency unemployment compensation paid to individuals by the State pursuant to such agreement. ‘‘(b) TREATMENT OF REIMBURSABLE COMPENSATION.— No payment shall be made to any State under this sec- tion in respect of any compensation to the extent the State is entitled to reimbursement in respect of such compensation under the provisions of any Federal law other than this title or chapter 85 of title 5, United States Code. A State shall not be entitled to any reim- bursement under such chapter 85 in respect of any com- pensation to the extent the State is entitled to reim- bursement under this title in respect of such compensa- tion. ‘‘(c) DETERMINATION OF AMOUNT.—Sums payable to any State by reason of such State having an agreement under this title shall be payable, either in advance or by way of reimbursement (as may be determined by the Secretary), in such amounts 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 amount by which the Secretary finds that the Secretary’s 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 on the basis of such statistical, sampling, or other method as may be agreed upon by the Sec- retary and the State agency of the State involved. ‘‘FINANCING PROVISIONS ‘‘SEC. 4004. (a) IN GENERAL.—Funds in the extended unemployment compensation account (as established by section 905(a) of the Social Security Act (42 U.S.C. 1105(a))[)] of the Unemployment Trust Fund (as estab- lished by section 904(a) of such Act (42 U.S.C. 1104(a))[)] shall be used for the making of payments to States having agreements entered into under this title. ‘‘(b) CERTIFICATION.—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 title. The Secretary of the Treasury, prior to audit or settlement by the Government Accountability Office, shall make payments to the State in accordance with such certification, by transfers from the extended unemployment compensation account (as so estab- lished) to the account of such State in the Unemploy- ment Trust Fund (as so established). ‘‘(c) ASSISTANCE TO STATES.— ‘‘(1) ADMINISTRATION.—There are appropriated out of the employment security administration account (as established by section 901(a) of the Social Secu- rity Act (42 U.S.C. 1101(a))[)] of the Unemployment Trust Fund, without fiscal year limitation, such funds as may be necessary for purposes of assisting States (as provided in title III of the Social Security Act (42 U.S.C. 501 et seq.)) in meeting the costs of ad- ministration of agreements under this title. ‘‘(2) REEMPLOYMENT SERVICES AND REEMPLOYMENT AND ELIGIBILITY ASSESSMENT ACTIVITIES.— ‘‘(A) APPROPRIATION.—There are appropriated from the general fund of the Treasury, for the pe- riod of fiscal year 2012 through fiscal year 2014, out of the employment security administration account (as established by section 901(a) of the Social Secu- rity Act [42 U.S.C. 1101(a)]), such sums as deter- mined by the Secretary of Labor in accordance with subparagraph (B) to assist States in providing re- employment services and reemployment and eligi- bility assessment activities described in section 4001(h)(2). ‘‘(B) DETERMINATION OF TOTAL AMOUNT.—The amount referred to in subparagraph (A) is the amount the Secretary of Labor estimates is equal to— ‘‘(i) the number of individuals who will receive reemployment services and reemployment eligi- bility and assessment activities described in sec- tion 4001(h)(2) in all States through the date spec- ified in [former] section 4007(b)(3); multiplied by ‘‘(ii) $85. ‘‘(C) DISTRIBUTION AMONG STATES.—Of the amounts appropriated under subparagraph (A), the Secretary of Labor shall distribute amounts to each State, in accordance with section 4003(c), that the Secretary estimates is equal to— ‘‘(i) the number of individuals who will receive reemployment services and reemployment and eligibility assessment activities described in sec- tion 4001(h)(2) in such State through the date specified in [former] section 4007(b)(3); multiplied by ‘‘(ii) $85. ‘‘(d) APPROPRIATIONS FOR CERTAIN PAYMENTS.—There are appropriated from the general fund of the Treasury, without fiscal year limitation, to the extended unem- ployment compensation account (as so established) of the Unemployment Trust Fund (as so established) such sums as the Secretary estimates to be necessary to make the payments under this section in respect of— ‘‘(1) compensation payable under chapter 85 of title 5, United States Code; and ‘‘(2) compensation payable on the basis of services to which section 3309(a)(1) of the Internal Revenue Code of 1986 applies. Amounts appropriated pursuant to the preceding sen- tence shall not be required to be repaid. ‘‘(e) TRANSFER OF FUNDS.—Notwithstanding any other provision of law, the Secretary of the Treasury shall transfer from the general fund of the Treasury (from funds not otherwise appropriated)— ‘‘(1) to the extended unemployment compensation account (as established by section 905 of the Social Security Act [42 U.S.C. 1105]) such sums as the Sec- retary of Labor estimates to be necessary to make payments to States under this title by reason of— ‘‘(A) the amendments made by section 2001(a) of the Assistance for Unemployed Workers and Strug- gling Families Act [title II of div. B of Pub. L. 111–5]; ‘‘(B) the amendments made by sections 2 through 4 of the Worker, Homeownership, and Business As- sistance Act of 2009 [Pub. L. 111–92]; ‘‘(C) the amendments made by section 1009(a)(1) of the Department of Defense Appropriations Act, 2010 [Pub. L. 111–118]; ‘‘(D) the amendments made by section 2(a)(1) of the Temporary Extension Act of 2010 [Pub. L. 111–144]; ‘‘(E) the amendments made by section 2(a)(1) of the Continuing Extension Act of 2010 [Pub. L. 111–157]; ‘‘(F) the amendments made by section 2(a)(1) of the Unemployment Compensation Extension Act of 2010 [Pub. L. 111–205]; ‘‘(G) the amendments made by section 501(a)(1) of the Tax Relief, Unemployment Insurance Reauthor- ization, and Job Creation Act of 2010 [Pub. L. 111–312]; ‘‘(H) the amendments made by section 201(a)(1) of the Temporary Payroll Tax Cut Continuation Act of 2011 [Pub. L. 112–78]; ‘‘(I) the amendments made by section 2122 of the Unemployment Benefits Extension Act of 2012 [Pub. L. 112–96]; and ‘‘(J) the amendments made by section 501(a) of the American Taxpayer Relief Act of 2012 [Pub. L. 112–240]; ‘‘(2) to the employment security administration ac- count (as established by section 901 of the Social Se- curity Act [42 U.S.C. 1101]) such sums as the Sec- Page 2789 TITLE 26—INTERNAL REVENUE CODE § 3304 retary of Labor estimates to be necessary for pur- poses of assisting States in meeting administrative costs by reason of the amendments referred to in paragraph (1); and ‘‘(3) to the Employment Security Administration account (as established by section 901(a) of the Social Security Act [42 U.S.C. 1101(a)]) such sums as the Sec- retary of Labor determines to be necessary in accord- ance with subsection (c)(2) to assist States in pro- viding reemployment services and reemployment eli- gibility and assessment activities described in sec- tion 4001(h)(2). There are appropriated from the general fund of the Treasury, without fiscal year limitation, the sums re- ferred to in the preceding sentence and such sums shall not be required to be repaid. ‘‘FRAUD AND OVERPAYMENTS ‘‘SEC. 4005. (a) IN GENERAL.—If an individual know- ingly has made, or caused to be made by another, a false statement or representation of a material fact, or knowingly has failed, or caused another to fail, to dis- close a material fact, and as a result of such false state- ment or representation or of such nondisclosure such individual has received an amount of emergency unem- ployment compensation under this title to which such individual was not entitled, such individual— ‘‘(1) shall be ineligible for further emergency unem- ployment compensation under this title in accord- ance with the provisions of the applicable State un- employment compensation law relating to fraud in connection with a claim for unemployment com- pensation; and ‘‘(2) shall be subject to prosecution under section 1001 of title 18, United States Code. ‘‘(b) REPAYMENT.—In the case of individuals who have received amounts of emergency unemployment com- pensation under this title to which they were not enti- tled, the State shall require such individuals to repay the amounts of such emergency unemployment com- pensation to the State agency, except that the State agency may waive such repayment if it determines that— ‘‘(1) the payment of such emergency unemployment compensation was without fault on the part of any such individual; and ‘‘(2) such repayment would be contrary to equity and good conscience. ‘‘(c) RECOVERY BY STATE AGENCY.— ‘‘(1) IN GENERAL.—The State agency shall recover the amount to be repaid, or any part thereof, by de- ductions from any emergency unemployment com- pensation payable to such individual under this title or from any unemployment compensation payable to such individual under any State or Federal unem- ployment compensation law administered by the State agency or under any other State or Federal law administered by the State agency which provides for the payment of any assistance or allowance with re- spect to any week of unemployment, during the 3- year period after the date such individuals received the payment of the emergency unemployment com- pensation to which they were not entitled, in accord- ance with the same procedures as apply to the recov- ery of overpayments of regular unemployment bene- fits paid by the State. ‘‘(2) OPPORTUNITY FOR HEARING.—No repayment shall be required, and no deduction shall be made, until a determination has been made, notice thereof and an opportunity for a fair hearing has been given to the individual, and the determination has become final. ‘‘(d) REVIEW.—Any determination by a State agency under this section shall be subject to review in the same manner and to the same extent as determinations under the State unemployment compensation law, and only in that manner and to that extent. ‘‘DEFINITIONS ‘‘SEC. 4006. In this title, the terms ‘compensation’, ‘regular compensation’, ‘extended compensation’, ‘ben- efit year’, ‘base period’, ‘State’, ‘State agency’, ‘State law’, and ‘week’ have the respective meanings given such terms under section 205 of the Federal-State Ex- tended Unemployment Compensation Act of 1970 [Pub. L. 91–373] (26 U.S.C. 3304 note). ‘‘APPLICABILITY ‘‘SEC. 4007. (a) IN GENERAL.—An agreement entered into under this title shall apply to weeks of unemploy- ment— ‘‘(1) beginning after the date on which such agree- ment is entered into; and ‘‘(2) ending on or before January 1, 2014. ‘‘(b) TERMINATION.—No compensation under this title shall be payable for any week subsequent to the last week described in subsection (a).’’ [Pub. L. 112–240, title V, § 501(c), Jan. 2, 2013, 126 Stat. 2344, provided that: ‘‘The amendments made by this section [amending sections 4004 and 4007 of Pub. L. 110–252, set out above] shall take effect as if included in the enactment of the Unemployment Benefits Exten- sion Act of 2012 ([subtitle B of title II of] Public Law 112–96)’’.] [Pub. L. 112–240, title V, § 503(b), Jan. 2, 2013, 126 Stat. 2344, provided that: ‘‘The amendments made by this section [amending section 4004 of Pub. L. 110–252, set out above] shall take effect as if included in the enact- ment of the Unemployment Benefits Extension Act of 2012 ([subtitle B of title II of] Public Law 112–96).’’] [Pub. L. 112–96, title II, § 2122(f), Feb. 22, 2012, 126 Stat. 166, provided that: [‘‘(1) IN GENERAL.—The amendments made by sub- sections (b), (c), and (d) [amending sections 4001 and 4002 of Pub. L. 110–252, set out above] shall take effect as of February 28, 2012, and shall apply with respect to weeks of unemployment beginning after that date. [‘‘(2) WEEK DEFINED.—For purposes of this subsection, the term ‘week’ has the meaning given such term under section 4006 of the Supplemental Appropriations Act, 2008 [Pub. L. 110–252, set out above].’’] [Pub. L. 112–96, title II, § 2142(b), Feb. 22, 2012, 126 Stat. 169, provided that: ‘‘Not later than 30 days after the date of enactment of this Act [Feb. 22, 2012], the Secretary shall issue guidance on the implementation of the reemployment services and reemployment and eligibility assessment activities required to be provided under the amendment made by subsection (a) [amend- ing section 4001 of Pub. L. 110–252, set out above].’’] [Pub. L. 112–96, § 2142(c)(2)(A), which directed amend- ment of section 4004(e)(1)(G) of Pub. L. 110–252, set out above, by striking out ‘‘and’’ at the end, could not be executed because of the prior identical amendment by Pub. L. 112–96, § 2122(e)(1).] [Pub. L. 112–96, § 2142(c)(2)(C), which directed amend- ment of section 4004(e) of Pub. L. 110–252, set out above, by adding par. (3) ‘‘at the end’’, was executed by adding par. (3) after par. (2), to reflect the probable intent of Congress.] [Pub. L. 112–96, title II, § 2144, Feb. 22, 2012, 126 Stat. 171, provided that: ‘‘Subsection (g) of section 4001 of the Supplemental Appropriations Act, 2008 (Public Law 110–252; 26 U.S.C. 3304 note) shall not apply with respect to a State that has enacted a law before March 1, 2012, that, upon taking effect, would violate such sub- section.’’] [Amendment by section 201(a)(1), (b) of Pub. L. 112–78 to sections 4004 and 4007 of Pub. L. 110–252, set out above, effective as if included in the enactment of Pub. L. 111–312, see section 201(c) of Pub. L. 112–78, set out following section 2005 of Pub. L. 111–5 above.] [Amendment by section 501(a)(1), (b) of Pub. L. 111–312 to sections 4004 and 4007 of Pub. L. 110–252, set out above, effective as if included in the enactment of Pub. L. 111–205, see section 501(c) of Pub. L. 111–312, set out following section 2005 of Pub. L. 111–5 above.] [Amendment by section 2(a)(1), (b), (c) of Pub. L. 111–205 to sections 4001, 4004, and 4007 of Pub. L. 110–252, set out above, effective as if included in Pub. L. 111–157, see section 2(d) of Pub. L. 111–205, set out following sec- tion 2005 of Pub. L. 111–5 above.] Page 2790 TITLE 26—INTERNAL REVENUE CODE § 3304 [Pub. L. 111–205, § 3(b), July 22, 2010, 124 Stat. 2238, pro- vided that: ‘‘The amendment made by this section [amending section 4002 of Pub. L. 110–252, set out above] shall apply to individuals whose benefit years, as de- scribed in section 4002(g)(1)(B) [of] the Supplemental Appropriations Act, 2008 (Public Law 110–252; 26 U.S.C. 3304 note), as amended by this section, expire after the date of enactment of this Act [July 22, 2010].’’] [Amendment by section 2(a)(1), (b) of Pub. L. 111–157 to sections 4004 and 4007 of Pub. L. 110–252, set out above, effective as if included in the enactment of Pub. L. 111–144, see section 2(c) of Pub. L. 111–157, set out fol- lowing section 2002 of Pub. L. 111–5 above.] [Pub. L. 111–92, § 2(b), Nov. 6, 2009, 123 Stat. 2984, pro- vided that: ‘‘The amendments made by this section [amending section 4002 of Pub. L. 110–252, set out above] shall apply as if included in the enactment of the Sup- plemental Appropriations Act, 2008 [Pub. L. 110–252], ex- cept that no amount shall be payable by virtue of such amendments with respect to any week of unemploy- ment commencing before the date of the enactment of this Act [Nov. 6, 2009].’’] [Pub. L. 111–92, § 3(c), Nov. 6, 2009, 123 Stat. 2985, pro- vided that: ‘‘The amendments made by this section [amending sections 4002 and 4007 of Pub. L. 110–252, set out above] shall apply as if included in the enactment of the Supplemental Appropriations Act, 2008 [Pub. L. 110–252], except that no amount shall be payable by vir- tue of such amendments with respect to any week of unemployment commencing before the date of the en- actment of this Act [Nov. 6, 2009].’’] [Pub. L. 111–92, § 4(c), Nov. 6, 2009, 123 Stat. 2986, pro- vided that: ‘‘The amendments made by this section [amending sections 4002 and 4007 of Pub. L. 110–252, set out above] shall apply as if included in the enactment of the Supplemental Appropriations Act, 2008 [Pub. L. 110–252], except that no amount shall be payable by vir- tue of such amendments with respect to any week of unemployment commencing before the date of the en- actment of this Act [Nov. 6, 2009].’’] [Pub. L. 110–449, § 6, Nov. 21, 2008, 122 Stat. 5015, pro- vided that: [‘‘(a) IN GENERAL.—The amendments made by sec- tions 2, 3, and 4 [amending title IV of Pub. L. 110–252, set out as a note above] shall apply as if included in the enactment of the Supplemental Appropriations Act, 2008 [Pub. L. 110–252], subject to subsection (b). [‘‘(b) ADDITIONAL BENEFITS.—In applying the amend- ments made by sections 2 and 3, any additional emer- gency unemployment compensation made payable by such amendments (which would not otherwise have been payable if such amendments had not been en- acted) shall be payable only with respect to any week of unemployment beginning on or after the date of the enactment of this Act [Nov. 21, 2008].’’] ADDITIONAL TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION FOR DISPLACED AIRLINE RELATED WORKERS Pub. L. 108–11, title IV, § 4002, Apr. 16, 2003, 117 Stat. 607, provided that: ‘‘(a) DEFINITIONS.—For purposes of this section— ‘‘(1) the term ‘eligible individual’ means an indi- vidual whose eligibility for temporary extended un- employment compensation under the Temporary Ex- tended Unemployment Compensation Act of 2002 (Public Law 107–147; 116 Stat. 21) [title II of Pub. L. 107–147, set out as a note below], as amended by Pub- lic Law 108–1 (117 Stat. 3), is or would be based on the exhaustion of regular compensation under State law, entitlement to which was based in whole or in part on qualifying employment performed during such indi- vidual’s base period; ‘‘(2) the term ‘qualifying employment’, with respect to an eligible individual, means employment— ‘‘(A) with an air carrier, employment at a facility at an airport, or with an upstream producer or sup- plier for an air carrier; and ‘‘(B) as determined by the Secretary, separation from which was due, in whole or in part, to— ‘‘(i) reductions in service by an air carrier as a result of a terrorist action or security measure; ‘‘(ii) a closure of an airport in the United States as a result of a terrorist action or security meas- ure; or ‘‘(iii) a military conflict with Iraq that has been authorized by Congress; ‘‘(3) the term ‘air carrier’ means an air carrier that holds a certificate issued under chapter 411 of title 49, United States Code; ‘‘(4) the term ‘upstream producer’ means a firm that performs additional, value-added, production processes, including firms that perform final assem- bly, finishing, or packaging of articles, for another firm; ‘‘(5) the term ‘supplier’ means a firm that produces component parts for, or articles and contract services considered to be a part of the production process or services for, another firm; ‘‘(6) the term ‘Secretary’ means the Secretary of Labor; and ‘‘(7) the term ‘terrorist action or security measure’ means a terrorist attack on the United States on September 11, 2001, or a security measure taken in re- sponse to such attack. ‘‘(b) ADDITIONAL TEMPORARY EXTENDED UNEMPLOY- MENT COMPENSATION FOR ELIGIBLE INDIVIDUAL.—In the case of an eligible individual, the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107–147; 116 Stat. 21), as amended by Public Law 108–1 (117 Stat. 3), shall be applied as if it had been amended in accordance with subsection (c). ‘‘(c) MODIFICATIONS.— ‘‘(1) IN GENERAL.—For purposes of subsection (b), the Temporary Extended Unemployment Compensa- tion Act of 2002 (Public Law 107–147; 116 Stat. 21), as amended by Public Law 108–1 (117 Stat. 3), shall be treated as if it had been amended as provided in this subsection. ‘‘(2) PROGRAM EXTENSION.—Deem section 208 of the Temporary Extended Unemployment Compensation Act of 2002, as amended by Public Law 108–1 (117 Stat. 3), to be amended to read as follows: ‘‘ ‘SEC. 208. APPLICABILITY. ‘‘ ‘(a) IN GENERAL.—Subject to subsection (b), an agreement entered into under this title shall apply to weeks of unemployment— ‘‘ ‘(1) beginning after the date on which such agree- ment is entered into; and ‘‘ ‘(2) ending before December 29, 2003. ‘‘ ‘(b) TRANSITION FOR AMOUNT REMAINING IN AC- COUNT.— ‘‘ ‘(1) IN GENERAL.—Subject to paragraph (2), in the case of an individual who has amounts remaining in an account established under section 203 as of Decem- ber 28, 2003, temporary extended unemployment com- pensation shall continue to be payable to such indi- vidual from such amounts for any week beginning after such date for which the individual meets the eli- gibility requirements of this title, including such compensation payable by reason of amounts depos- ited in such account after such date pursuant to the application of subsection (c) of such section. ‘‘ ‘(2) LIMITATION.—No compensation shall be pay- able by reason of paragraph (1) for any week begin- ning after December 26, 2004.’. ‘‘(3) ADDITIONAL WEEKS OF BENEFITS.—Deem section 203 of the Temporary Extended Unemployment Com- pensation Act of 2002, as amended by Public Law 108–1 (117 Stat. 3), to be amended— ‘‘(A) in subsection (b)(1)— ‘‘(i) in subparagraph (A), by striking ‘50’ and in- serting ‘150’; and ‘‘(ii) by striking ‘13’ and inserting ‘39’; and ‘‘(B) in subsection (c)(1), by inserting ‘1⁄3 of’ after ‘equal to’. ‘‘(4) EFFECTIVE DATE OF MODIFICATIONS DESCRIBED IN PARAGRAPH (3).— ‘‘(A) IN GENERAL.—The amendments described in paragraph (3)— Page 2791 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘(i) shall be deemed to have taken effect as if included in the enactment of the Temporary Ex- tended Unemployment Compensation Act of 2002; but ‘‘(ii) shall be treated as applying only with re- spect to weeks of unemployment beginning on or after the date of enactment of this Act [Apr. 16, 2003], subject to subparagraph (B). ‘‘(B) SPECIAL RULES.—In the case of an eligible in- dividual for whom a temporary extended unemploy- ment account was established before the date of en- actment of this Act [Apr. 16, 2003], the Temporary Extended Unemployment Compensation Act of 2002 (as amended by this section) shall be applied sub- ject to the following: ‘‘(i) Any amounts deposited in the individual’s temporary extended unemployment compensation account by reason of section 203(c) of such Act (commonly known as ‘TEUC–X amounts’) before the date of enactment of this Act [Apr. 16, 2003] shall be treated as amounts deposited by reason of section 203(b) of such Act (commonly known as ‘TEUC amounts’), as deemed to have been amend- ed by paragraph (3)(A). ‘‘(ii) For purposes of determining whether the individual is eligible for any TEUC–X amounts under such Act, as deemed to be amended by this subsection— ‘‘(I) any determination made under section 203(c) of such Act before the application of the amendment described in paragraph (3)(B) shall be disregarded; and ‘‘(II) any such determination shall instead be made by applying section 203(c) of such Act, as deemed to be amended by paragraph (3)(B), as of the time that all amounts established in such account in accordance with section 203(b) of such Act (as deemed to be amended under this subsection, and including any amounts de- scribed in clause (i)) are in fact exhausted.’’ TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION Pub. L. 107–147, title II, Mar. 9, 2002, 116 Stat. 26, as amended by Pub. L. 108–1, § 1(a), Jan. 8, 2003, 117 Stat. 3; Pub. L. 108–26, § 2(a), May 28, 2003, 117 Stat. 751; Pub. L. 108–271, § 8(b), July 7, 2004, 118 Stat. 814, provided that: ‘‘SEC. 201. SHORT TITLE. ‘‘This title may be cited as the ‘Temporary Extended Unemployment Compensation Act of 2002’. ‘‘SEC. 202. FEDERAL-STATE AGREEMENTS. ‘‘(a) IN GENERAL.—Any State which desires to do so may enter into and participate in an agreement under this title with the Secretary of Labor (in this title re- ferred to as the ‘Secretary’). Any State which is a party to an agreement under this title may, upon providing 30 days’ written notice to the Secretary, terminate such agreement. ‘‘(b) PROVISIONS OF AGREEMENT.—Any agreement under subsection (a) shall provide that the State agen- cy of the State will make payments of temporary ex- tended unemployment compensation to individuals who— ‘‘(1) have exhausted all rights to regular compensa- tion under the State law or under Federal law with respect to a benefit year (excluding any benefit year that ended before March 15, 2001); ‘‘(2) have no rights to regular compensation or ex- tended compensation with respect to a week under such law or any other State unemployment com- pensation law or to compensation under any other Federal law; ‘‘(3) are not receiving compensation with respect to such week under the unemployment compensation law of Canada; and ‘‘(4) filed an initial claim for regular compensation on or after March 15, 2001. ‘‘(c) EXHAUSTION OF BENEFITS.—For purposes of sub- section (b)(1), an individual shall be deemed to have ex- hausted such individual’s rights to regular compensa- tion under a State law when— ‘‘(1) no payments of regular compensation can be made under such law because such individual has re- ceived all regular compensation available to such in- dividual based on employment or wages during such individual’s base period; or ‘‘(2) such individual’s rights to such compensation have been terminated by reason of the expiration of the benefit year with respect to which such rights ex- isted. ‘‘(d) WEEKLY BENEFIT AMOUNT, ETC.—For purposes of any agreement under this title— ‘‘(1) the amount of temporary extended unemploy- ment compensation which shall be payable to any in- dividual for any week of total unemployment shall be equal to the amount of the regular compensation (in- cluding dependents’ allowances) payable to such indi- vidual during such individual’s benefit year under the State law for a week of total unemployment; ‘‘(2) the terms and conditions of the State law which apply to claims for regular compensation and to the payment thereof shall apply to claims for tem- porary extended unemployment compensation and the payment thereof, except— ‘‘(A) that an individual shall not be eligible for temporary extended unemployment compensation under this title unless, in the base period with re- spect to which the individual exhausted all rights to regular compensation under the State law, the individual had 20 weeks of full-time insured em- ployment or the equivalent in insured wages, as de- termined under the provisions of the State law im- plementing section 202(a)(5) of the Federal-State Extended Unemployment Compensation Act of 1970 [Pub. L. 91–373] (26 U.S.C. 3304 note); and ‘‘(B) where otherwise inconsistent with the provi- sions of this title or with the regulations or oper- ating instructions of the Secretary promulgated to carry out this title; and ‘‘(3) the maximum amount of temporary extended unemployment compensation payable to any indi- vidual for whom a temporary extended unemploy- ment compensation account is established under sec- tion 203 shall not exceed the amount established in such account for such individual. ‘‘(e) ELECTION BY STATES.—Notwithstanding any other provision of Federal law (and if State law per- mits), the Governor of a State that is in an extended benefit period may provide for the payment of tem- porary extended unemployment compensation in lieu of extended compensation to individuals who otherwise meet the requirements of this section. Such an election shall not require a State to trigger off an extended ben- efit period. ‘‘SEC. 203. TEMPORARY EXTENDED UNEMPLOY- MENT COMPENSATION ACCOUNT. ‘‘(a) IN GENERAL.—Any agreement under this title shall provide that the State will establish, for each eli- gible individual who files an application for temporary extended unemployment compensation, a temporary extended unemployment compensation account with respect to such individual’s benefit year. ‘‘(b) AMOUNT IN ACCOUNT.— ‘‘(1) IN GENERAL.—The amount established in an ac- count under subsection (a) shall be equal to the lesser of— ‘‘(A) 50 percent of the total amount of regular compensation (including dependents’ allowances) payable to the individual during the individual’s benefit year under such law, or ‘‘(B) 13 times the individual’s average weekly ben- efit amount for the benefit year. ‘‘(2) WEEKLY BENEFIT AMOUNT.—For purposes of this subsection, an individual’s weekly benefit amount for any week is the amount of regular compensation (in- cluding dependents’ allowances) under the State law payable to such individual for such week for total un- employment. Page 2792 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘(c) SPECIAL RULE.— ‘‘(1) IN GENERAL.—Notwithstanding any other provi- sion of this section, if, at the time that the individ- ual’s account is exhausted, such individual’s State is in an extended benefit period (as determined under paragraph (2)), then, such account shall be augmented by an amount equal to the amount originally estab- lished in such account (as determined under sub- section (b)(1)). ‘‘(2) EXTENDED BENEFIT PERIOD.—For purposes of paragraph (1), a State shall be considered to be in an extended benefit period if, at the time of exhaustion (as described in paragraph (1))— ‘‘(A) such a period is then in effect for such State under the Federal-State Extended Unemployment Compensation Act of 1970 [title II of Pub. L. 91–373]; or ‘‘(B) such a period would then be in effect for such State under such Act if section 203(d) of such Act were applied as if it had been amended by striking ‘5’ each place it appears and inserting ‘4’. ‘‘SEC. 204. PAYMENTS TO STATES HAVING AGREE- MENTS FOR THE PAYMENT OF TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION. ‘‘(a) GENERAL RULE.—There shall be paid to each State that has entered into an agreement under this title an amount equal to 100 percent of the temporary extended unemployment compensation paid to individ- uals by the State pursuant to such agreement. ‘‘(b) TREATMENT OF REIMBURSABLE COMPENSATION.— No payment shall be made to any State under this sec- tion in respect of any compensation to the extent the State is entitled to reimbursement in respect of such compensation under the provisions of any Federal law other than this title or chapter 85 of title 5, United States Code. A State shall not be entitled to any reim- bursement under such chapter 85 in respect of any com- pensation to the extent the State is entitled to reim- bursement under this title in respect of such compensa- tion. ‘‘(c) DETERMINATION OF AMOUNT.—Sums payable to any State by reason of such State having an agreement under this title shall be payable, either in advance or by way of reimbursement (as may be determined by the Secretary), in such amounts 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 amount by which the Secretary finds that the Secretary’s 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 on the basis of such statistical, sampling, or other method as may be agreed upon by the Sec- retary and the State agency of the State involved. ‘‘SEC. 205. FINANCING PROVISIONS. ‘‘(a) IN GENERAL.—Funds in the extended unemploy- ment compensation account (as established by section 905(a) of the Social Security Act (42 U.S.C. 1105(a)) of the Unemployment Trust Fund (as established by sec- tion 904(a) of such Act (42 U.S.C. 1104(a)) shall be used for the making of payments to States having agree- ments entered into under this title. ‘‘(b) CERTIFICATION.—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 title. The Secretary of the Treasury, prior to audit or settlement by the Government Accountability Office, shall make payments to the State in accordance with such certification, by transfers from the extended unemployment compensation account (as so estab- lished) to the account of such State in the Unemploy- ment Trust Fund (as so established). ‘‘(c) ASSISTANCE TO STATES.—There are appropriated out of the employment security administration ac- count (as established by section 901(a) of the Social Se- curity Act (42 U.S.C. 1101(a)) of the Unemployment Trust Fund, without fiscal year limitation, such funds as may be necessary for purposes of assisting States (as provided in title III of the Social Security Act (42 U.S.C. 501 et seq.)) in meeting the costs of administra- tion of agreements under this title. ‘‘(d) APPROPRIATIONS FOR CERTAIN PAYMENTS.—There are appropriated from the general fund of the Treasury, without fiscal year limitation, to the extended unem- ployment compensation account (as so established) of the Unemployment Trust Fund (as so established) such sums as the Secretary estimates to be necessary to make the payments under this section in respect of— ‘‘(1) compensation payable under chapter 85 of title 5, United States Code; and ‘‘(2) compensation payable on the basis of services to which section 3309(a)(1) of the Internal Revenue Code of 1986 applies. Amounts appropriated pursuant to the preceding sen- tence shall not be required to be repaid. ‘‘SEC. 206. FRAUD AND OVERPAYMENTS. ‘‘(a) IN GENERAL.—If an individual knowingly has made, or caused to be made by another, a false state- ment or representation of a material fact, or knowingly has failed, or caused another to fail, to disclose a mate- rial fact, and as a result of such false statement or rep- resentation or of such nondisclosure such individual has received an amount of temporary extended unem- ployment compensation under this title to which he was not entitled, such individual— ‘‘(1) shall be ineligible for further temporary ex- tended unemployment compensation under this title in accordance with the provisions of the applicable State unemployment compensation law relating to fraud in connection with a claim for unemployment compensation; and ‘‘(2) shall be subject to prosecution under section 1001 of title 18, United States Code. ‘‘(b) REPAYMENT.—In the case of individuals who have received amounts of temporary extended unemploy- ment compensation under this title to which they were not entitled, the State shall require such individuals to repay the amounts of such temporary extended unem- ployment compensation to the State agency, except that the State agency may waive such repayment if it determines that— ‘‘(1) the payment of such temporary extended un- employment compensation was without fault on the part of any such individual; and ‘‘(2) such repayment would be contrary to equity and good conscience. ‘‘(c) RECOVERY BY STATE AGENCY.— ‘‘(1) IN GENERAL.—The State agency may recover the amount to be repaid, or any part thereof, by de- ductions from any temporary extended unemploy- ment compensation payable to such individual under this title or from any unemployment compensation payable to such individual under any Federal unem- ployment compensation law administered by the State agency or under any other Federal law admin- istered by the State agency which provides for the payment of any assistance or allowance with respect to any week of unemployment, during the 3-year pe- riod after the date such individuals received the pay- ment of the temporary extended unemployment com- pensation to which they were not entitled, except that no single deduction may exceed 50 percent of the weekly benefit amount from which such deduction is made. ‘‘(2) OPPORTUNITY FOR HEARING.—No repayment shall be required, and no deduction shall be made, until a determination has been made, notice thereof and an opportunity for a fair hearing has been given to the individual, and the determination has become final. ‘‘(d) REVIEW.—Any determination by a State agency under this section shall be subject to review in the same manner and to the same extent as determinations under the State unemployment compensation law, and only in that manner and to that extent. ‘‘SEC. 207. DEFINITIONS. ‘‘In this title, the terms ‘compensation’, ‘regular compensation’, ‘extended compensation’, ‘additional Page 2793 TITLE 26—INTERNAL REVENUE CODE § 3304 compensation’, ‘benefit year’, ‘base period’, ‘State’, ‘State agency’, ‘State law’, and ‘week’ have the respec- tive meanings given such terms under section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 [Pub. L. 91–373] (26 U.S.C. 3304 note). ‘‘SEC. 208. APPLICABILITY. ‘‘(a) IN GENERAL.—Except as provided in subsection (b), an agreement entered into under this title shall apply to weeks of unemployment— ‘‘(1) beginning after the date on which such agree- ment is entered into; and ‘‘(2) ending on or before December 31, 2003. ‘‘(b) TRANSITION FOR AMOUNT REMAINING IN AC- COUNT.— ‘‘(1) IN GENERAL.—Subject to paragraphs (2) and (3), in the case of an individual who has amounts remain- ing in an account established under section 203 as of December 31, 2003, temporary extended unemploy- ment compensation shall continue to be payable to such individual from such amounts for any week be- ginning after such date for which the individual meets the eligibility requirements of this title. ‘‘(2) NO AUGMENTATION AFTER DECEMBER 31, 2003.—If the account of an individual is exhausted after De- cember 31, 2003, then section 203(c) shall not apply and such account shall not be augmented under such section, regardless of whether such individual’s State is in an extended benefit period (as determined under paragraph (2) of such section). ‘‘(3) LIMITATION.—No compensation shall be payable by reason of paragraph (1) for any week beginning after March 31, 2004. ‘‘SEC. 209. SPECIAL REED ACT TRANSFER IN FIS- CAL YEAR 2002. ‘‘(a) REPEAL OF CERTAIN PROVISIONS ADDED BY THE BALANCED BUDGET ACT OF 1997.— ‘‘(1) IN GENERAL.—[Amended section 1103 of Title 42, The Public Health and Welfare.] ‘‘(2) SAVINGS PROVISION.—Any amounts transferred before the date of enactment of this Act [Mar. 9, 2002] under the provision repealed by paragraph (1)(A) [amending section 1103 of Title 42] shall remain sub- ject to section 903 of the Social Security Act [42 U.S.C. 1103], as last in effect before such date of en- actment. ‘‘(b) SPECIAL TRANSFER IN FISCAL YEAR 2002.— [Amended section 1103 of Title 42.] ‘‘(c) LIMITATIONS ON TRANSFERS.—Section 903(b) of the Social Security Act [42 U.S.C. 1103(b)] shall apply to transfers under section 903(d) of such Act (as amended by this section). For purposes of the preceding sen- tence, such section 903(b) shall be deemed to be amend- ed as follows: ‘‘(1) By substituting ‘the transfer date described in subsection (d)(5)’ for ‘October 1 of any fiscal year’. ‘‘(2) By substituting ‘remain in the Federal unem- ployment account’ for ‘be transferred to the Federal unemployment account as of the beginning of such October 1’. ‘‘(3) By substituting ‘fiscal year 2002 (after the transfer date described in subsection (d)(5))’ for ‘the fiscal year beginning on such October 1’. ‘‘(4) By substituting ‘under subsection (d)’ for ‘as of October 1 of such fiscal year’. ‘‘(5) By substituting ‘(as of the close of fiscal year 2002)’ for ‘(as of the close of such fiscal year)’. ‘‘(d) TECHNICAL AMENDMENTS.— ‘‘(1) [Amended sections 3304 and 3306 of this title.] ‘‘(2) [Amended section 503 of Title 42.] ‘‘(e) REGULATIONS.—The Secretary of Labor may pre- scribe any operating instructions or regulations nec- essary to carry out this section and the amendments made by this section.’’ [Pub. L. 108–26, § 2(b), May 28, 2003, 117 Stat. 751, pro- vided that: ‘‘The amendments made by this section [amending section 208 of Pub. L. 107–147, set out above] shall take effect as if included in the enactment of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107–147 [title II]; 116 Stat. 21 [26]).’’] [Pub. L. 108–1, § 1(b), Jan. 8, 2003, 117 Stat. 4, provided that: ‘‘The amendment made by this section [amending section 208 of Pub. L. 107–147, set out above] shall take effect as if included in the enactment of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107–147 [title II]; 116 Stat. 21 [26]).’’] PROFILING OF NEW CLAIMANTS FOR REGULAR UNEMPLOYMENT COMPENSATION Pub. L. 103–6, § 4, Mar. 4, 1993, 107 Stat. 34, directed Secretary of Labor to establish program for encour- aging adoption and implementation by all States of system of profiling all new claimants for regular unem- ployment compensation to determine which claimants might be likely to exhaust regular unemployment com- pensation and might need reemployment assistance services, directed Secretary to provide technical assist- ance and advice to States in development of model profiling systems and procedures for such systems and to provide to each State, from funds available for this purpose, such funds as determined necessary, and di- rected Secretary to report to Congress on operation and effectiveness of profiling systems adopted by States along with continuation and legislative rec- ommendations, prior to repeal by Pub. L. 103–152, § 4(e), Nov. 24, 1993, 107 Stat. 1518. TREATMENT OF PERSIAN GULF CRISIS RESERVISTS Pub. L. 102–318, title I, § 104, July 3, 1992, 106 Stat. 293, provided that: ‘‘If— ‘‘(1) an individual who was a member of a reserve component of the Armed Forces was called for active duty after August 2, 1990, and before March 1, 1991, ‘‘(2) such individual was receiving regular com- pensation, extended compensation, or a trade read- justment allowance for the week in which he was so called, ‘‘(3) such individual served on such active duty for at least 90 consecutive days, and ‘‘(4) such individual was entitled to regular com- pensation on the basis of his services on such active duty, but the weekly benefit amount was less than the benefit amount he received for the week referred to in paragraph (2), such individual’s weekly benefit amount under the Emergency Unemployment Compensation Act of 1991 [see section 101(d) of Pub. L. 102–164, formerly set out below] for any week beginning after the date of the en- actment of this Act [July 3, 1992] shall be not less than the benefit amount he received for the week referred to in paragraph (2).’’ STUDY AND REPORT BY FEDERAL ADVISORY COUNCIL ON SUSPENSION OF ELIGIBILITY REQUIREMENTS FOR UN- EMPLOYMENT BENEFITS Pub. L. 102–318, title II, § 202(b)(2), July 3, 1992, 106 Stat. 297, directed Federal Advisory Council established under 42 U.S.C. 1108 to conduct a study of the provi- sions suspended by the amendment made by section 202(b)(1) of Pub. L. 102–318, enacting section 202(a)(7) of Pub. L. 91–373, set out below, and to submit, not later than Feb. 1, 1994, to Committee on Ways and Means of House of Representatives and Committee on Finance of Senate, a report of its recommendations on such sus- pended provisions. INFORMATION REQUIRED WITH RESPECT TO TAXATION OF UNEMPLOYMENT BENEFITS Pub. L. 102–318, title III, § 301, July 3, 1992, 106 Stat. 297, provided that: ‘‘(a) INFORMATION ON UNEMPLOYMENT BENEFITS.— ‘‘(1) GENERAL RULE.—The State agency in each State shall provide to an individual filing a claim for compensation under the State unemployment com- pensation law a written explanation of the Federal and State income taxation of unemployment benefits and of the requirements to make payments of esti- mated Federal and State income taxes. ‘‘(2) STATE AGENCY.—For purposes of this sub- section, the term ‘State agency’ has the meaning Page 2794 TITLE 26—INTERNAL REVENUE CODE § 3304 given such term by section 3306(e) of the Internal Revenue Code of 1986. ‘‘(b) EFFECTIVE DATE.—The amendment made by sub- section (a) shall take effect on October 1, 1992.’’ EMERGENCY UNEMPLOYMENT COMPENSATION ACT OF 1991 Pub. L. 102–164, § 1, titles I, II, Nov. 15, 1991, 105 Stat. 1049, 1056, as amended by Pub. L. 102–182, § 3(a)(1)–(6), Dec. 4, 1991, 105 Stat. 1234; Pub. L. 102–244, §§ 1(a), (b), 2, Feb. 7, 1992, 106 Stat. 3, 4; Pub. L. 102–318, title I, §§ 101(a)–(d), 102(a), 103(a), 107, July 3, 1992, 106 Stat. 290–293, 295; Pub. L. 103–6, § 2(a)–(c), Mar. 4, 1993, 107 Stat. 33; Pub. L. 103–152, §§ 2(a)–(d), 3(a), Nov. 24, 1993, 107 Stat. 1516, 1517, known as the ‘‘Emergency Unem- ployment Compensation Act of 1991’’, established an emergency unemployment compensation program for individuals eligible during the period of Nov. 17, 1991, to Feb. 5, 1994, and directed the Secretary of Labor to carry out a job search assistance demonstration pro- gram with a final report to Congress on the effective- ness of the demonstration program due not later than 5 years after the commencement of the program. DETERMINATION OF AMOUNT OF FEDERAL SHARE WITH RESPECT TO CERTAIN EXTENDED BENEFITS PAYMENTS Pub. L. 100–203, title IX, § 9151, Dec. 22, 1987, 101 Stat. 1330–322, provided that: ‘‘For the purpose of deter- mining the amount of the Federal payment to any State under section 204(a)(1) of the Federal-State Ex- tended Unemployment Compensation Act of 1970 [Pub. L. 91–373, set out below] with respect to the implemen- tation of paragraph (3) of section 202(a) of such Act [section 202(a) of Pub. L. 91–373, set out below] (as added by section 1024(a) of the Omnibus Reconciliation Act of 1980 [Pub. L. 96–499]), such paragraph shall be consid- ered to apply only with respect to weeks of unemploy- ment beginning after October 31, 1981, except that for any State in which the State legislature did not meet in 1981, it shall be considered to apply for such purpose only with respect to weeks of unemployment beginning after October 31, 1982.’’ DEMONSTRATION PROGRAM TO PROVIDE SELF- EMPLOYMENT ALLOWANCES FOR ELIGIBLE INDIVIDUALS Pub. L. 100–203, title IX, § 9152, Dec. 22, 1987, 101 Stat. 1330–322, as amended by Pub. L. 100–647, title VIII, § 8301, Nov. 10, 1988, 102 Stat. 3798, provided that: ‘‘(a) IN GENERAL.—The Secretary of Labor (herein- after in this section referred to as the ‘Secretary’) shall carry out a demonstration program under this section for the purpose of making available self-employment allowances to eligible individuals. To carry out such program, the Secretary shall enter into agreements with three States that— ‘‘(1) apply to participate in such program, and ‘‘(2) demonstrate to the Secretary that they are ca- pable of implementing the provisions of the agree- ment. ‘‘(b) SELECTION OF STATES.—(1) In determining wheth- er to enter into an agreement with a State under this section, the Secretary shall take into consideration at least— ‘‘(A) the availability and quality of technical as- sistance currently provided by agencies of the State to the self-employed; ‘‘(B) existing local market conditions and the busi- ness climate for new, small business enterprises in the State; ‘‘(C) the adequacy of State resources to carry out a regular unemployment compensation program and a program under this section; ‘‘(D) the range and extent of specialized services to be provided by the State to individuals covered by such an agreement; ‘‘(E) the design of the evaluation to be applied by the State to the program; and ‘‘(F) the standards which are to be utilized by the State for the purpose of assuring that individuals who will receive self-employment assistance under this section will have sufficient experience (or train- ing) and ability to be self employed. ‘‘(2) The Secretary may not enter into an agreement with any State under this section unless the Secretary makes a determination that the State’s unemployment compensation program has adequate reserves. ‘‘(c) PROVISIONS OF AGREEMENTS.—Any agreement en- tered into with a State under this section shall provide that— ‘‘(1) each individual who is an eligible individual with respect to any benefit year beginning during the three-year period commencing on the date on which such agreement is entered into shall receive a self- employment allowance; ‘‘(2) self-employment allowances made to any indi- vidual under this section shall be made in the same amount, on the same terms, and subject to the same conditions as regular or extended unemployment compensation, as the case may be, paid by such State; except that— ‘‘(A) State and Federal requirements relating to availability for work, active search for work, or re- fusal to accept suitable work shall not apply to such individual; and ‘‘(B) such individual shall be considered to be un- employed for purposes of the State and Federal laws applicable to unemployment compensation, as long as the individual meets the requirements ap- plicable under this section to such individual; ‘‘(3) to the extent that such allowances are made to an individual under this section, an amount equal to the amount of such allowances shall be charged against the amount that may be paid to such indi- vidual under State law for regular or extended unem- ployment compensation, as the case may be; ‘‘(4) the total amount paid to an individual with re- spect to any benefit year under this section may not exceed the total amount that could be paid to such individual for regular or extended unemployment compensation, as the case may be, with respect to such benefit year under State law; ‘‘(5) the State shall implement a program that— ‘‘(A) is approved by the Secretary; ‘‘(B) will not result in any cost to the Unemploy- ment Trust Fund established by section 904(a) of the Social Security Act [42 U.S.C. 1104(a)] in excess of the cost which would have been incurred by such State and charged to such Fund if the State had not participated in the demonstration program under this section; ‘‘(C) is designed to select and assist individuals for self-employment allowances, monitor the indi- vidual’s self-employment, and provide, as described in subsection (d), to the Secretary a complete eval- uation of the use of such allowances; and ‘‘(D) otherwise meets the requirements of this section; and ‘‘(6) the State, from its general revenue funds, shall— ‘‘(A) repay to the Unemployment Trust Fund any cost incurred by the State and charged to the Fund which exceeds the cost which would have been in- curred by such State and charged to such Fund if the State had not participated in the demonstra- tion program under this section; and ‘‘(B) in any case in which any excess cost de- scribed in subparagraph (A) is not repaid in the fis- cal year in which it was charged to the Fund, pay to the Fund an amount of interest, on the out- standing balance of such excess cost, which is suffi- cient (when combined with any repayment by the State described in subparagraph (A)) to reimburse the Fund for any loss which would not have been in- curred if such excess cost had not been incurred. ‘‘(d) EVALUATION.—(1) Each State that enters into an agreement under this section shall carry out an evalua- tion of its activities under this section. Such evalua- tion shall be based on an experimental design with ran- dom assignment between a treatment group and a con- Page 2795 TITLE 26—INTERNAL REVENUE CODE § 3304 trol group with not more than one-half of the individ- uals receiving assistance at any one time being as- signed to the treatment group. ‘‘(2) The Secretary shall use the data provided from such evaluation to analyze the benefits and the costs of the program carried out under this section, to formu- late the reports under subsection (g), and to estimate any excess costs described in subsection (c)(6)(A). ‘‘(e) FINANCING.—(1) Notwithstanding section 303(a)(5) of the Social Security Act [42 U.S.C. 503(a)(5)] and sec- tion 3304(a)(4) of the Internal Revenue Code of 1986, amounts in the unemployment fund of a State may be used by a State to make payments (exclusive of ex- penses of administration) for self-employment allow- ances made under this section to an individual who is receiving them in lieu of regular unemployment com- pensation. ‘‘(2) In any case in which a self-employment allow- ance is made under this section to an individual in lieu of extended unemployment compensation under the Federal-State Extended Unemployment Compensation Act of 1970 [title II of Pub. L. 91–373, set out below], payments made under this section for self-employment allowances shall be considered to be compensation de- scribed in section 204(a)(1) of such Act and paid under State law. ‘‘(f) LIMITATION.—No funds made available to a State under title III of the Social Security Act [42 U.S.C. 501 et seq.] or any other Federal law may be used for the purpose of administering the program carried out by such State under this section. ‘‘(g) REPORT TO CONGRESS.—(1) Not later than three years after the date of the enactment of this Act [Dec. 22, 1987], the Secretary shall submit an interim report to the Congress on the effectiveness of the demonstra- tion program carried out under this section. Such re- port shall include— ‘‘(A) information on the extent to which this sec- tion has been utilized; ‘‘(B) an analysis of any barriers to such utilization; and ‘‘(C) an analysis of the feasibility of extending the provisions of this section to individuals not covered by State unemployment compensation laws. ‘‘(2) Not later than six years after the date of the en- actment of this Act [Dec. 22, 1987], the Secretary shall submit a final report to the Congress on such program. ‘‘(h) FRAUD AND OVERPAYMENTS.—(1) If an individual knowingly has made, or caused to be made by another, a false statement or representation of a material fact, or knowingly has failed, or caused another to fail, to disclose a material fact, and as a result of such false statement or representation or of such nondisclosure such individual has received payment under this sec- tion to which he was not entitled, such individual shall be— ‘‘(A) ineligible for further assistance under this sec- tion; and ‘‘(B) subject to prosecution under section 1001 of title 18, United States Code. ‘‘(2)(A) If any person received any payment under this section to which such person was not entitled, the State is authorized to require such person to repay such assistance; except that the State agency may waive such repayment if it determines that— ‘‘(i) the providing of such assistance or making of such payment was without fault on the part of such person; and ‘‘(ii) such repayment would be contrary to equity and good conscience. ‘‘(B) No repayment shall be required under subpara- graph (A) until a determination has been made, notice thereof and an opportunity for a fair hearing has been given to the person, and the determination has become final. Any determination under such subparagraph shall be subject to review in the same manner and to the same extent as determinations under the State un- employment compensation law, and only in that man- ner and to that extent. ‘‘(i) DEFINITIONS.—For purposes of this section— ‘‘(1) the term ‘eligible individual’ means, with re- spect to any benefit year, an individual who— ‘‘(A) is eligible to receive regular or extended compensation under the State law during such ben- efit year; ‘‘(B) is likely to receive unemployment com- pensation for the maximum number of weeks that such compensation is made available under the State law during such benefit year; ‘‘(C) submits an application to the State agency for a self-employment allowance under this section; and ‘‘(D) meets applicable State requirements, except that not more than (i) 3 percent of the number of individuals eligible to receive regular compensa- tion in a State at the beginning of a fiscal year, or (ii) the number of persons who exhausted their unem- ployment compensation benefits in the fiscal year ending before such fiscal year, whichever is lesser, may be considered as eligible individuals for such State for purposes of this section during such fiscal year; ‘‘(2) the term ‘self-employment allowance’ means compensation paid under this section for the purpose of assisting an eligible individual with such individ- ual’s self-employment; and ‘‘(3) the terms ‘compensation’, ‘extended compensa- tion’, ‘regular compensation’, ‘benefit year’, ‘State’, and ‘State law’, have the respective meanings given to such terms by section 205 of the Federal-State Ex- tended Unemployment Compensation Act of 1970 [Pub. L. 91–373, set out below].’’ SUPPLEMENTAL UNEMPLOYMENT COMPENSATION FOR CERTAIN INDIVIDUALS Pub. L. 99–272, title XII, § 12402, Apr. 7, 1986, 100 Stat. 298, provided that: ‘‘(a) IN GENERAL.—If— ‘‘(1) an individual was receiving Federal supple- mental compensation for the week which includes March 31, 1985, or a series of consecutive weeks which began with such week, and ‘‘(2) such individual did not meet the consecutive- week eligibility requirements of the Federal Supple- mental Compensation Act of 1982 [subtitle A (§§ 601–606) of title VI of Pub. L. 97–248, set out below] during any period of 1 or more subsequent weeks by reason of performing temporary disaster services de- scribed in subsection (e), weeks in such period shall be disregarded for purposes of the consecutive-week requirement of section 602(f)(2)(B) of such Act [section 602(f)(2)(B) of Pub. L. 97–248, set out below], and, notwithstanding the re- quirements of State law relating to the availability for work, the active search for work, or the refusal to ac- cept work, such individual shall be entitled to payment of Federal supplemental compensation for each week of unemployment which is described in subsection (b) and for which a certification of unemployment is made by such individual in accordance with subsection (c). ‘‘(b) WEEKS FOR WHICH PAYMENT SHALL BE MADE.—A week of unemployment for which payment shall be made under subsection (a) is a week which occurred during the period which commences with the first week beginning after the close of the period described in sub- section (a)(2) and ends with the beginning of the first week in which the individual was employed after the close of such period. ‘‘(c) CERTIFICATION.—The certification of unemploy- ment referred to in subsection (a) shall be a certifi- cation— ‘‘(1) that is made on a form provided by the State agency concerned and signed by the individual; and ‘‘(2) that identifies the weeks of unemployment for which the individual is making the certification. ‘‘(d) LIMITATION ON AMOUNT OF PAYMENT.—In no case may the total amount paid to an individual under sub- section (a) exceed the amount remaining in the account established for such individual under section 602(e) of the Federal Supplemental Compensation Act of 1982 Page 2796 TITLE 26—INTERNAL REVENUE CODE § 3304 [section 602(e) of Pub. L. 97–248, set out below] after payments were made from such account for weeks of unemployment beginning before the period described in subsection (a)(2). ‘‘(e) DEFINITION.—For purposes of subsection (a), the term ‘temporary disaster services’ means services per- formed as a member of the National Guard after being called up by the Governor of a State to perform serv- ices related to a major disaster that was declared on June 3, 1985, by the President of the United States under the Disaster Relief Act of 1974 [42 U.S.C. 5121 et seq.]. ‘‘(f) MODIFICATION OF AGREEMENT.—(1) The Secretary of Labor shall, at the earliest possible date after the date of the enactment of this Act [Apr. 7, 1986], propose to any State concerned a modification of the agree- ment that the Secretary has with such State under sec- tion 602 of the Federal Supplemental Compensation Act of 1982 [section 602 of Pub. L. 97–248, set out below] in order to carry out this section. ‘‘(2) Pending modification of the agreement, the State may make payment in accordance with the provi- sions of this section and shall be reimbursed in accord- ance with the provisions of section 604(a) of the Federal Supplemental Compensation Act of 1982 [section 604(a) of Pub. L. 97–248, set out below]. For purposes of car- rying out this paragraph, the term ‘this subtitle’ in such section 604(a) shall include this section. ‘‘(g) EFFECTIVE DATE.—The provisions of this section shall apply to weeks beginning after March 31, 1985.’’ AMORTIZATION PAYMENTS FOR STATES WITH INDE- PENDENT RETIREMENT PLANS FROM FUNDS FOR IN- CREASED COSTS OF ADMINISTRATION OF UNEMPLOY- MENT COMPENSATION LAWS; CHANGES IN STATE LAWS; INCREASED CLAIMS; SALARY COSTS Pub. L. 99–88, title I, § 100, Aug. 15, 1985, 99 Stat. 344, provided that: ‘‘Whenever funds are made available, now or hereafter, in this or any other Act for the ad- ministration of unemployment compensation laws to meet increased costs of administration resulting from changes in a State law or increases in the number of unemployment insurance claims filed and claims paid or increased salary costs resulting from changes in State salary compensation plans embracing employees of the State generally over those upon which the State’s basic allocation was based, which cannot be provided for by normal budgetary adjustment, amorti- zation payments for States which had independent re- tirement plans prior to 1980 in their State Employment Security Agencies and States agencies administering the State’s unemployment compensation law may be paid from such funds.’’ ARRANGEMENTS TO PREVENT PAYMENTS OF UNEMPLOY- MENT COMPENSATION TO RETIREES AND PRISONERS Pub. L. 98–135, title II, § 206, Oct. 24, 1983, 97 Stat. 861, provided that: ‘‘(a) The Secretary of Labor, the Director of the Of- fice of Personnel Management, and the Attorney Gen- eral are directed to enter into arrangements to make available to the States, computer or other data regard- ing current and retired Federal employees and Federal prisoners so that States may review the eligibility of these individuals for unemployment compensation, and take action where appropriate. ‘‘(b) The Secretary of Labor shall report to the Con- gress, prior to January 31, 1984, on arrangements which have been entered into under subsection (a), and any arrangements which could be entered into with other appropriate State agencies, for the purpose of ensuring that unemployment compensation is not paid to retired individuals or prisoners in violation of law. The report shall include any recommendations for further legisla- tion which might be necessary to aid in preventing such payments.’’ SHORT-TIME COMPENSATION Pub. L. 112–96, title II, §§ 2162–2165, Feb. 22, 2012, 126 Stat. 173–178, provided that: ‘‘SEC. 2162. TEMPORARY FINANCING OF SHORT- TIME COMPENSATION PAYMENTS IN STATES WITH PROGRAMS IN LAW. ‘‘(a) PAYMENTS TO STATES.— ‘‘(1) IN GENERAL.—Subject to paragraph (3), there shall be paid to a State an amount equal to 100 per- cent of the amount of short-time compensation paid under a short-time compensation program (as defined in section 3306(v) of the Internal Revenue Code of 1986, as added by section 2161(a)) under the provisions of the State law. ‘‘(2) TERMS OF PAYMENTS.—Payments made to a State under paragraph (1) shall be payable by way of reimbursement in such amounts as the Secretary es- timates the State will be entitled to receive under this section for each calendar month, reduced or in- creased, as the case may be, by any amount by which the Secretary finds that the Secretary’s 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 on the basis of such statistical, sampling, or other method as may be agreed upon by the Secretary and the State agency of the State involved. ‘‘(3) LIMITATIONS ON PAYMENTS.— ‘‘(A) GENERAL PAYMENT LIMITATIONS.—No pay- ments shall be made to a State under this section for short-time compensation paid to an individual by the State during a benefit year in excess of 26 times the amount of regular compensation (includ- ing dependents’ allowances) under the State law payable to such individual for a week of total un- employment. ‘‘(B) EMPLOYER LIMITATIONS.—No payments shall be made to a State under this section for benefits paid to an individual by the State under a short- time compensation program if such individual is employed by the participating employer on a sea- sonal, temporary, or intermittent basis. ‘‘(b) APPLICABILITY.— ‘‘(1) IN GENERAL.—Payments to a State under sub- section (a) shall be available for weeks of unemploy- ment— ‘‘(A) beginning on or after the date of the enact- ment of this Act [Feb. 22, 2012]; and ‘‘(B) ending on or before the date that is 3 years and 6 months after the date of the enactment of this Act. ‘‘(2) THREE-YEAR FUNDING LIMITATION FOR COMBINED PAYMENTS UNDER THIS SECTION AND SECTION 2163.— States may receive payments under this section and section 2163 with respect to a total of not more than 156 weeks. ‘‘(c) TWO-YEAR TRANSITION PERIOD FOR EXISTING PRO- GRAMS.—During any period that the transition provi- sion under section 2161(a)(3) [of Pub. L. 112–96, set out as a note under section 3306 of this title] is applicable to a State with respect to a short-time compensation program, such State shall be eligible for payments under this section. Subject to paragraphs (1)(B) and (2) of subsection (b), if at any point after the date of the enactment of this Act the State enacts a State law pro- viding for the payment of short-time compensation under a short-time compensation program that meets the definition of such a program under section 3306(v) of the Internal Revenue Code of 1986, as added by sec- tion 2161(a), the State shall be eligible for payments under this section after the effective date of such en- actment. ‘‘(d) FUNDING AND CERTIFICATIONS.— ‘‘(1) FUNDING.—There are appropriated, out of mon- eys in the Treasury not otherwise appropriated, such sums as may be necessary for purposes of carrying out this section. ‘‘(2) CERTIFICATIONS.—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. ‘‘(e) DEFINITIONS.—In this section: ‘‘(1) SECRETARY.—The term ‘Secretary’ means the Secretary of Labor. Page 2797 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘(2) STATE; STATE AGENCY; STATE LAW.—The terms ‘State’, ‘State agency’, and ‘State law’ have the meanings given those terms in section 205 of the Fed- eral-State Extended Unemployment Compensation Act of 1970 [Pub. L. 91–373] (26 U.S.C. 3304 note). ‘‘SEC. 2163. TEMPORARY FINANCING OF SHORT- TIME COMPENSATION AGREEMENTS. ‘‘(a) FEDERAL-STATE AGREEMENTS.— ‘‘(1) IN GENERAL.—Any State which desires to do so may enter into, and participate in, an agreement under this section with the Secretary provided that such State’s law does not provide for the payment of short-time compensation under a short-time com- pensation program (as defined in section 3306(v) of the Internal Revenue Code of 1986, as added by section 2161(a)). ‘‘(2) ABILITY TO TERMINATE.—Any State which is a party to an agreement under this section may, upon providing 30 days’ written notice to the Secretary, terminate such agreement. ‘‘(b) PROVISIONS OF FEDERAL-STATE AGREEMENT.— ‘‘(1) IN GENERAL.—Any agreement under this section shall provide that the State agency of the State will make payments of short-time compensation under a plan approved by the State. Such plan shall provide that payments are made in accordance with the re- quirements under section 3306(v) of the Internal Rev- enue Code of 1986, as added by section 2161(a). ‘‘(2) LIMITATIONS ON PLANS.— ‘‘(A) GENERAL PAYMENT LIMITATIONS.—A short- time compensation plan approved by a State shall not permit the payment of short-time compensa- tion to an individual by the State during a benefit year in excess of 26 times the amount of regular compensation (including dependents’ allowances) under the State law payable to such individual for a week of total unemployment. ‘‘(B) EMPLOYER LIMITATIONS.—A short-time com- pensation plan approved by a State shall not pro- vide payments to an individual if such individual is employed by the participating employer on a sea- sonal, temporary, or intermittent basis. ‘‘(3) EMPLOYER PAYMENT OF COSTS.—Any short-time compensation plan entered into by an employer must provide that the employer will pay the State an amount equal to one-half of the amount of short-time compensation paid under such plan. Such amount shall be deposited in the State’s unemployment fund and shall not be used for purposes of calculating an employer’s contribution rate under section 3303(a)(1) of the Internal Revenue Code of 1986. ‘‘(c) PAYMENTS TO STATES.— ‘‘(1) IN GENERAL.—There shall be paid to each State with an agreement under this section an amount equal to— ‘‘(A) one-half of the amount of short-time com- pensation paid to individuals by the State pursuant to such agreement; and ‘‘(B) any additional administrative expenses in- curred by the State by reason of such agreement (as determined by the Secretary). ‘‘(2) TERMS OF PAYMENTS.—Payments made to a State under paragraph (1) shall be payable by way of reimbursement in such amounts as the Secretary es- timates the State will be entitled to receive under this section for each calendar month, reduced or in- creased, as the case may be, by any amount by which the Secretary finds that the Secretary’s 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 on the basis of such statistical, sampling, or other method as may be agreed upon by the Secretary and the State agency of the State involved. ‘‘(3) FUNDING.—There are appropriated, out of mon- eys in the Treasury not otherwise appropriated, such sums as may be necessary for purposes of carrying out this section. ‘‘(4) CERTIFICATIONS.—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. ‘‘(d) APPLICABILITY.— ‘‘(1) IN GENERAL.—An agreement entered into under this section shall apply to weeks of unemployment— ‘‘(A) beginning on or after the date on which such agreement is entered into; and ‘‘(B) ending on or before the date that is 2 years and 13 weeks after the date of the enactment of this Act [Feb. 22, 2012]. ‘‘(2) TWO-YEAR FUNDING LIMITATION.—States may re- ceive payments under this section with respect to a total of not more than 104 weeks. ‘‘(e) SPECIAL RULE.—If a State has entered into an agreement under this section and subsequently enacts a State law providing for the payment of short-time compensation under a short-time compensation pro- gram that meets the definition of such a program under section 3306(v) of the Internal Revenue Code of 1986, as added by section 2161(a), the State— ‘‘(1) shall not be eligible for payments under this section for weeks of unemployment beginning after the effective date of such State law; and ‘‘(2) subject to paragraphs (1)(B) and (2) of section 2162(b), shall be eligible to receive payments under section 2162 after the effective date of such State law. ‘‘(f) DEFINITIONS.—In this section: ‘‘(1) SECRETARY.—The term ‘Secretary’ means the Secretary of Labor. ‘‘(2) STATE; STATE AGENCY; STATE LAW.—The terms ‘State’, ‘State agency’, and ‘State law’ have the meanings given those terms in section 205 of the Fed- eral-State Extended Unemployment Compensation Act of 1970 [Pub. L. 91–373] (26 U.S.C. 3304 note). ‘‘SEC. 2164. GRANTS FOR SHORT-TIME COMPENSA- TION PROGRAMS. ‘‘(a) GRANTS.— ‘‘(1) FOR IMPLEMENTATION OR IMPROVED ADMINISTRA- TION.—The Secretary shall award grants to States that enact short-time compensation programs (as de- fined in subsection (i)(2)) for the purpose of imple- mentation or improved administration of such pro- grams. ‘‘(2) FOR PROMOTION AND ENROLLMENT.—The Sec- retary shall award grants to States that are eligible and submit plans for a grant under paragraph (1) for such States to promote and enroll employers in short-time compensation programs (as so defined). ‘‘(3) ELIGIBILITY.— ‘‘(A) IN GENERAL.—The Secretary shall determine eligibility criteria for the grants under paragraphs (1) and (2). ‘‘(B) CLARIFICATION.—A State administering a short-time compensation program, including a pro- gram being administered by a State that is partici- pating in the transition under the provisions of sec- tions 301(a)(3) and 302(c) [probably means sections ‘‘2161(a)(3)’’ (26 U.S.C. 3306 note) and ‘‘2162(c)’’ of Pub. L. 112–96], that does not meet the definition of a short-time compensation program under section 3306(v) of the Internal Revenue Code of 1986 (as added by 211(a) [probably means ‘‘section 2161(a)’’]), and a State with an agreement under section 2163, shall not be eligible to receive a grant under this section until such time as the State law of the State provides for payments under a short-time compensation program that meets such definition and such law. ‘‘(b) AMOUNT OF GRANTS.— ‘‘(1) IN GENERAL.—The maximum amount available for making grants to a State under paragraphs (1) and (2) shall be equal to the amount obtained by mul- tiplying $100,000,000 (less the amount used by the Sec- retary under subsection (e)) by the same ratio as would apply under subsection (a)(2)(B) of section 903 of the Social Security Act (42 U.S.C. 1103) for pur- poses of determining such State’s share of any excess amount (as described in subsection (a)(1) of such sec- tion) that would have been subject to transfer to Page 2798 TITLE 26—INTERNAL REVENUE CODE § 3304 State accounts, as of October 1, 2010, under the provi- sions of subsection (a) of such section. ‘‘(2) AMOUNT AVAILABLE FOR DIFFERENT GRANTS.—Of the maximum incentive payment determined under paragraph (1) with respect to a State— ‘‘(A) one-third shall be available for a grant under subsection (a)(1); and ‘‘(B) two-thirds shall be available for a grant under subsection (a)(2). ‘‘(c) GRANT APPLICATION AND DISBURSAL.— ‘‘(1) APPLICATION.—Any State seeking a grant under paragraph (1) or (2) of subsection (a) shall submit an application to the Secretary at such time, in such manner, and complete with such information as the Secretary may require. In no case may the Secretary award a grant under this section with respect to an application that is submitted after December 31, 2014. ‘‘(2) NOTICE.—The Secretary 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 for a grant under paragraph (1) or (2) (or both) of subsection (a). ‘‘(3) CERTIFICATION.—If the Secretary finds that the State law provisions meet the requirements for a grant under subsection (a), the Secretary shall there- upon make a certification to that effect to the Sec- retary of the Treasury, together with a certification as to the amount of the grant payment to be trans- ferred to the State account in the Unemployment Trust Fund (as established in section 904(a) of the So- cial Security Act (42 U.S.C. 1104(a))) pursuant to that finding. The Secretary of the Treasury shall make the appropriate transfer to the State account within 7 days after receiving such certification. ‘‘(4) REQUIREMENT.—No certification of compliance with the requirements for a grant under paragraph (1) or (2) of subsection (a) may be made with respect to any State whose— ‘‘(A) State law is not otherwise eligible for cer- tification under section 303 of the Social Security Act (42 U.S.C. 503) or approvable under section 3304 of the Internal Revenue Code of 1986; or ‘‘(B) short-time compensation program is subject to discontinuation or is not scheduled to take effect within 12 months of the certification. ‘‘(d) USE OF FUNDS.—The amount of any grant award- ed under this section shall be used for the implementa- tion of short-time compensation programs and the overall administration of such programs and the pro- motion and enrollment efforts associated with such programs, such as through— ‘‘(1) the creation or support of rapid response teams to advise employers about alternatives to layoffs; ‘‘(2) the provision of education or assistance to em- ployers to enable them to assess the feasibility of participating in short-time compensation programs; and ‘‘(3) the development or enhancement of systems to automate— ‘‘(A) the submission and approval of plans; and ‘‘(B) the filing and approval of new and ongoing short-time compensation claims. ‘‘(e) ADMINISTRATION.—The Secretary is authorized to use 0.25 percent of the funds available under subsection (g) to provide for outreach and to share best practices with respect to this section and short-time compensa- tion programs. ‘‘(f) RECOUPMENT.—The Secretary shall establish a process under which the Secretary shall recoup the amount of any grant awarded under paragraph (1) or (2) of subsection (a) if the Secretary determines that, dur- ing the 5-year period beginning on the first date that any such grant is awarded to the State, the State— ‘‘(1) terminated the State’s short-time compensa- tion program; or ‘‘(2) failed to meet appropriate requirements with respect to such program (as established by the Sec- retary). ‘‘(g) FUNDING.—There are appropriated, out of moneys in the Treasury not otherwise appropriated, to the Sec- retary, $100,000,000 to carry out this section, to remain available without fiscal year limitation. ‘‘(h) REPORTING.—The Secretary may establish re- porting requirements for States receiving a grant under this section in order to provide oversight of grant funds. ‘‘(i) DEFINITIONS.—In this section: ‘‘(1) SECRETARY.—The term ‘Secretary’ means the Secretary of Labor. ‘‘(2) SHORT-TIME COMPENSATION PROGRAM.—The term ‘short-time compensation program’ has the meaning given such term in section 3306(v) of the Internal Rev- enue Code of 1986, as added by section 2161(a). ‘‘(3) STATE; STATE AGENCY; STATE LAW.—The terms ‘State’, ‘State agency’, and ‘State law’ have the meanings given those terms in section 205 of the Fed- eral-State Extended Unemployment Compensation Act of 1970 [Pub. L. 91–373] (26 U.S.C. 3304 note). ‘‘SEC. 2165. ASSISTANCE AND GUIDANCE IN IMPLE- MENTING PROGRAMS. ‘‘(a) IN GENERAL.—In order to assist States in estab- lishing, qualifying, and implementing short-time com- pensation programs (as defined in section 3306(v) of the Internal Revenue Code of 1986, as added by section 2161(a)), the Secretary of Labor (in this section referred to as the ‘Secretary’) shall— ‘‘(1) develop model legislative language which may be used by States in developing and enacting such programs and periodically review and revise such model legislative language; ‘‘(2) provide technical assistance and guidance in developing, enacting, and implementing such pro- grams; ‘‘(3) establish reporting requirements for States, in- cluding reporting on— ‘‘(A) the number of estimated averted layoffs; ‘‘(B) the number of participating employers and workers; and ‘‘(C) such other items as the Secretary of Labor determines are appropriate. ‘‘(b) MODEL LANGUAGE AND GUIDANCE.—The model language and guidance developed under subsection (a) shall allow sufficient flexibility by States and partici- pating employers while ensuring accountability and program integrity. ‘‘(c) CONSULTATION.—In developing the model legisla- tive language and guidance under subsection (a), and in order to meet the requirements of subsection (b), the Secretary shall consult with employers, labor organiza- tions, State workforce agencies, and other program ex- perts.’’ Pub. L. 102–318, title IV, § 401(b)–(d), July 3, 1992, 106 Stat. 299, which related to assistance in implementing short-time compensation programs, was repealed by Pub. L. 112–96, title II, § 2161(b)(3), Feb. 22, 2012, 126 Stat. 172. Pub. L. 97–248, title I, § 194, Sept. 3, 1982, 96 Stat. 409, provided that: ‘‘(a) It is the purpose of this section to assist States which provide partial unemployment benefits to indi- viduals whose workweeks are reduced pursuant to an employer plan under which such reductions are made in lieu of temporary layoffs. ‘‘(b)(1) The Secretary of Labor (hereinafter in this section referred to as the ‘Secretary’) shall develop model legislative language which may be used by States in developing and enacting short-time com- pensation programs, and shall provide technical assist- ance to States to assist in developing, enacting, and implementing such short-time compensation program. ‘‘(2) The Secretary shall conduct a study or studies for purposes of evaluating the operation, costs, effect on the State insured rate of unemployment, and other effects of State short-time compensation programs de- veloped pursuant to this section. ‘‘(3) This section shall be a three-year experimental provision, and the provisions of this section regarding guidelines shall terminate 3 years following the date of the enactment of this Act [Sept. 3, 1982]. Page 2799 TITLE 26—INTERNAL REVENUE CODE § 3304 ‘‘(4) States are encouraged to experiment in carrying out the purpose and intent of this section. However, to assure minimum uniformity, States are encouraged to consider requiring the provisions contained in sub- sections (c) and (d). ‘‘(c) For purposes of this section, the term ‘short- time compensation program’ means a program under which— ‘‘(1) individuals whose workweeks have been re- duced pursuant to a qualified employer plan by at least 10 per centum will be eligible for unemployment compensation; ‘‘(2) the amount of unemployment compensation payable to any such individual shall be a pro rata portion of the unemployment compensation which would be payable to the individual if the individual were totally unemployed; ‘‘(3) eligible employees may be eligible for short- time compensation or regular unemployment com- pensation, as needed; except that no employee shall be eligible for more than the maximum entitlement during any benefit year to which he or she would have been entitled for total unemployment, and no employee shall be eligible for short-time compensa- tion for more than twenty-six weeks in any twelve- month period; and ‘‘(4) eligible employees will not be expected to meet the availability for work or work search test require- ments while collecting short-time compensation ben- efits, but shall be available for their normal work- week. ‘‘(d) For purposes of subsection (c), the term ‘quali- fied employer plan’ means a plan of an employer or of an employers’ association which association is party to a collective bargaining agreement (hereinafter referred to as ‘employers’ association’) under which there is a reduction in the number of hours worked by employees rather than temporary layoffs if— ‘‘(1) the employer’s or employers’ association’s short-time compensation plan is approved by the State agency; ‘‘(2) the employer or employers’ association cer- tifies to the State agency that the aggregate reduc- tion in work hours pursuant to such plan is in lieu of temporary layoffs which would have affected at least 10 per centum of the employees in the unit or units to which the plan would apply and which would have resulted in an equivalent reduction of work hours; ‘‘(3) during the previous four months the work force in the affected unit or units has not been reduced by temporary layoffs of more than 10 per centum; ‘‘(4) the employer continues to provide health bene- fits, and retirement benefits under defined benefit pension plans (as defined in section 3(35) of the Em- ployee Requirement Income Security Act of 1974 [29 U.S.C. 1002(35)], to employees whose workweek is re- duced under such plan as though their workweek had not been reduced; and ‘‘(5) in the case of employees represented by an ex- clusive bargaining representative, that representa- tive has consented to the plan. The State agency shall review at least annually any qualified employer plan put into effect to assure that it continues to meet the requirements of this subsection and of any applicable State law. ‘‘(e) Short-time compensation shall be charged in a manner consistent with the State law. ‘‘(f) For purposes of this section, the term ‘State’ in- cludes the District of Columbia, the Commonwealth of Puerto Rico, and the Virgin Islands. ‘‘(g)(1) The Secretary shall conduct a study or studies of State short-time compensation programs consulting with employee and employer representatives in devel- oping criteria and guidelines to measure the following factors: ‘‘(A) the impact of the program upon the unemploy- ment trust fund, and a comparison with the esti- mated impact on the fund of layoffs which would have occurred but for the existence of the program; ‘‘(B) the extent to which the program has protected and preserved the jobs of workers, with special em- phasis on newly hired employees, minorities, and women; ‘‘(C) the extent to which layoffs occur in the unit subsequent to initiation of the program and the im- pact of the program upon the entitlement to unem- ployment compensation of the employees; ‘‘(D) where feasible, the effect of varying methods of administration; ‘‘(E) the effect of short-time compensation on em- ployers’ State unemployment tax rates, including both users and nonusers of short-time compensation, on a State-by-State basis; ‘‘(F) the effect of various State laws and practices under those laws on the retirement and health bene- fits of employees who are on short-time compensa- tion programs; ‘‘(G) a comparison of costs and benefits to employ- ees, employers, and communities from use of short- time compensation and layoffs; ‘‘(H) the cost of administration of the short-time compensation program; and ‘‘(I) such other factors as may be appropriate. ‘‘(2) Not later than October 1, 1985, the Secretary shall submit to the Congress and to the President a final report on the implementation of this section. Such report shall contain an evaluation of short-time compensation programs and shall contain such rec- ommendations as the Secretary deems advisable, in- cluding recommendations as to necessary changes in the Statistical practices of the Department of Labor.’’ FEDERAL SUPPLEMENTAL COMPENSATION ACT OF 1982 Pub. L. 97–248, title VI, subtitle A (§§ 601–606), Sept. 3, 1982, 96 Stat. 702, as amended by Pub. L. 97–424, title V, § 544(a), (d), Jan. 6, 1983, 96 Stat. 2196; Pub. L. 97–448, title III, § 310(a), Jan. 12, 1983, 96 Stat. 2411; Pub. L. 98–21, title V, §§ 501, 502, 504, 505, Apr. 20, 1983, 97 Stat. 141, 144; Pub. L. 98–92, § 1(a), Sept. 2, 1983, 97 Stat. 608; Pub. L. 98–118, § 1, Oct. 11, 1983, 97 Stat. 803; Pub. L. 98–135, title I, §§ 101, 102, Oct. 24, 1983, 97 Stat. 857; Pub. L. 99–15, § 1(a), (b), Apr. 4, 1985, 99 Stat. 37, known as the ‘‘Federal Supplemental Compensation Act of 1982’’, au- thorized States to enter into and participate in an agreement with the Secretary of Labor providing for States to make payments of Federal supplemental compensation for weeks beginning before Apr. 1, 1985, to eligible individuals who had exhausted their rights or had no right to regular compensation under State law. MODIFICATION OF AGREEMENTS UNDER FEDERAL SUPPLEMENTAL COMPENSATION ACT OF 1982 Pub. L. 99–15, § 1(c), Apr. 4, 1985, 99 Stat. 37, provided that: ‘‘The Secretary of Labor shall, at the earliest practicable date after the date of the enactment of this Act [Apr. 4, 1985], propose to each State with which he has in effect an agreement under section 602 of the Fed- eral Supplemental Compensation Act of 1982 [section 602 of Pub. L. 97–248, set out above] a modification of such agreement designed to provide for the payment of Federal supplemental compensation under such Act [subtitle A of title VI of Pub. L. 97–248, set out above] in accordance with the amendments made by this Act [amending the Federal Supplemental Compensation Act of 1982]. Notwithstanding any other provision of law, if any State fails or refuses within the three-week period beginning on the date the Secretary of Labor proposes such modification to such State, to enter into such modification of such agreement, the Secretary of Labor shall terminate such agreement effective with the end of the last week which ends on or before the close of such three-week period. Pending modification (or termination) of the agreement, States may pay Fed- eral supplemental compensation in accordance with the amendments made by this Act for weeks beginning after March 31, 1985, and shall be reimbursed in accord- Page 2800 TITLE 26—INTERNAL REVENUE CODE § 3304 ance with the provisions of the Federal Supplemental Compensation Act of 1982.’’ APPLICATION OF FEDERAL SUPPLEMENTAL COMPENSA- TION ACT OF 1982 WITH RESPECT TO WEEKS BEGIN- NING AFTER MARCH 31, 1983 Pub. L. 98–13, Mar. 29, 1983, 97 Stat. 54, provided: ‘‘That, with respect to weeks beginning after March 31, 1983, the Federal Supplemental Compensation Act of 1982 [subtitle A of title VI of Pub. L. 97–248, set out above] shall be applied as if the provisions contained in part A of title V of the conference report [H. Rept. No. 98–47] on the bill H.R. 1900 [part A (§§ 501–505) of title V of Pub. L. 98–21, Apr. 20, 1983, 97 Stat. 141–144, amending subtitle A of title VI of Pub. L. 97–248, set out above] were enacted into law on the date of the enactment of this Act [Mar. 29, 1983].’’ TERMINATION OF FEDERAL-STATE SUPPLEMENTAL UN- EMPLOYMENT COMPENSATION AGREEMENTS WITH STATES FAILING TO RENEGOTIATE Pub. L. 97–424, title V, § 544(c), Jan. 6, 1983, 96 Stat. 2197, provided that: ‘‘The Secretary of Labor shall, at the earliest practicable date after the date of the en- actment of this Act [Jan. 6, 1983], propose to each State with which he has in effect an agreement under section 602 of the Tax Equity and Fiscal Responsibility Act of 1982 [section 602 of Pub. L. 97–248, set out above] a modi- fication of such agreement designed to provide for the payment of Federal supplemental compensation under such Act [sections 601 to 606 of Pub. L. 97–248, set out above] in accordance with the amendments made by this Act [amending section 602(e) of Pub. L. 97–248, set out above]. Notwithstanding any other provision of law, if any State fails or refuses, within the three-week period beginning on the date the Secretary of Labor proposes such a modification to such State, to enter into such a modification of such agreement, the Sec- retary of Labor shall terminate such agreement effec- tive with the end of the last week which ends on or be- fore such three-week period.’’ CERTIFICATION OF STATE UNEMPLOYMENT LAWS; EFFECTIVE DATES Pub. L. 97–35, title XXIV, § 2408(b), Aug. 13, 1981, 95 Stat. 880, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘(1) Except as otherwise provided in paragraph (2)— ‘‘(A) The amendments made by sections 2401 and 2402 [amending Pub. L. 91–373, set out below] shall be required to be included in State unemployment com- pensation laws for purposes of certifications under section 3304(c) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] on October 31 of any taxable year after 1980; and ‘‘(B) the amendments made by sections 2403 and 2404 [amending Pub. L. 91–373, set out below] shall be required to be included in such laws for purposes of such certifications on October 31 of any taxable year after 1981. ‘‘(2)(A) In the case of any State the legislature of which— ‘‘(i) does not meet in a session which begins after the date of the enactment of this Act [Aug. 13, 1981] and prior to September 1, 1981, and ‘‘(ii) if in session on the date of the enactment of this Act, does not remain in session for a period of at least 25 calendar days, the date ‘1980’ in paragraph (1)(A) shall be deemed to be ‘1981’. ‘‘(B) In the case of any State the legislature of which— ‘‘(i) does not meet in a session which begins after the date of the enactment of this Act [Aug. 13, 1981] and prior to September 1, 1982, and ‘‘(ii) if in session on the date of the enactment of this Act, does not remain in session for a period of at least 25 calendar days, the date ‘1981’ in paragraph (1)(B) shall be deemed to be ‘1982’.’’ Pub. L. 96–499, title X, § 1025, Dec. 5, 1980, 94 Stat. 2660, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘On October 31 of any taxable year after 1980, the Secretary of Labor shall not certify any State, as provided in section 3304(c) of the Internal Rev- enue Code of 1986 [formerly I.R.C. 1954], which, after reasonable notice and opportunity for a hearing to the State agency, the Secretary of Labor finds has failed to amend its law so that it contains each of the provisions required by reason of the enactment of the preceding provisions of this subtitle [subtitle C of title X of Pub. L. 96–499, Dec. 5, 1980, 94 Stat. 2656, which enacted sec- tion 8509 of Title 5, Government Organization and Em- ployees, and section 1109 of Title 42, The Public Health and Welfare, enacted provisions set out as notes under this section and section 8509 of Title 5, and amended provisions set out as notes under this section] to be in- cluded therein, or has with respect to the 12-month pe- riod ending on such October 31, failed to comply sub- stantially with any such provision.’’ TRANSFER OF FUNDS TO FEDERAL UNEMPLOYMENT TRUST FUND AS PREREQUISITE TO APPROVAL OF VIR- GIN ISLANDS UNEMPLOYMENT COMPENSATION LAW Pub. L. 94–566, title I, § 116(g), Oct. 20, 1976, 90 Stat. 2673, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘The Secretary of Labor shall not approve an unemployment compensation law of the Virgin Islands under section 3304(a) of the Internal Rev- enue Code of 1986 [formerly I.R.C. 1954] until the Gov- ernor of the Virgin Islands has approved the transfer to the Federal Unemployment Trust Fund established by section 904 of the Social Security Act [42 U.S.C. 1104] of an amount equal to the dollar balance credited to the unemployment subfund of the Virgin Islands estab- lished under section 310 of title 24 of the Virgin Islands Code.’’ FEDERAL REIMBURSEMENT FOR BENEFITS PAID TO NEWLY COVERED WORKERS DURING TRANSITION PERIOD Pub. L. 94–566, title I, § 121, Oct. 20, 1976, 90 Stat. 2673, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided for payment of compensation for any week of unemployment beginning on or after Jan. 1, 1978, for services not covered by State unemployment compensation law during 1-year period ending Dec. 31, 1975, with the Secretary of Labor to pay to the unem- ployment fund of such State an amount equal to the Federal reimbursement. EMERGENCY UNEMPLOYMENT COMPENSATION ACT OF 1974 Pub. L. 93–572, §§ 101–105, Dec. 31, 1974, 88 Stat. 1869–1872, as amended by Pub. L. 94–12, title VII, § 701(a), Mar. 29, 1975, 89 Stat. 65; Pub. L. 94–45, title I, §§ 101(a)–(f), 102(a), 103(a), 106, June 30, 1975, 89 Stat. 236–239; Pub. L. 94–566, title I, § 116(d)(3), Oct. 20, 1976, 90 Stat. 2672; Pub. L. 95–19, title I, §§ 101(a), 102(a)–(c), 103(a), 104(a), 105(a), 107(a), Apr. 12, 1977, 91 Stat. 39–42; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, known as the ‘‘Emergency Unemployment Compensation Act of 1974’’, provided that, for weeks ending before Jan. 31, 1978, qualified States could enter into agreements with the Secretary of Labor for the payment of emergency unemployment compensation to eligible individuals who had exhausted their rights to regular compensa- tion under State law. MODIFICATION OF AGREEMENTS WITH STATES TO RE- FLECT AMENDMENTS UNDER EMERGENCY UNEMPLOY- MENT COMPENSATION EXTENSION ACT OF 1977 Pub. L. 95–19, title I, § 106, Apr. 12, 1977, 91 Stat. 42, provided that: ‘‘The Secretary of Labor shall, at the earliest practicable date after the date of the enact- ment of this Act [Apr. 12, 1977], propose to each State with which he has in effect an agreement under section 102 of the Emergency Compensation Act of 1974 [Pub. L. 93–572, set out above] a modification of such agreement designed to provide for the payment of emergency com- Page 2801 TITLE 26—INTERNAL REVENUE CODE § 3304 pensation under such Act in accordance with the amendments made by this title [enacting sections 102(h) and 105(b) of the Emergency Unemployment Compensation Act of 1974, amending sections 102(b)(2), (c)(3)(A)(ii), (e), (f)(2), 104(b), and 105(a) of that Act, and enacting provisions set out as notes under this section]. Notwithstanding any other provision of law, if any State fails or refuses, within the 3-week period begin- ning on the date the Secretary of Labor proposes such a modification of such State, to enter into such a modi- fication of such agreement, the Secretary of Labor shall terminate such agreement effective with the end of the last week which ends on or before the last day of such 3-week period.’’ MODIFICATION OF AGREEMENTS WITH STATES TO RE- FLECT AMENDMENTS UNDER UNEMPLOYMENT COM- PENSATION AMENDMENTS OF 1976 Pub. L. 94–566, title VI, § 604, Oct. 20, 1976, 90 Stat. 2691, provided that: ‘‘The Secretary of Labor shall, at the earliest practicable date after the date of the en- actment of this Act [Oct. 20, 1976], propose to each State with which he has in effect an agreement under section 202 of the Emergency Jobs and Unemployment Assistance Act of 1974 [Pub. L. 93–567, title II, § 202, set out below] a modification of such agreement designed to provide for the payment of special unemployment assistance under such Act in accordance with the amendments made by sections 601, 602, and 603 of this title [set out as a Special Unemployment Assistance Programs note below]. Notwithstanding any other pro- vision of law, if any State fails or refuses, within the three-week period beginning on the date the Secretary of Labor proposes such a modification to such State, to enter into such a modification of such agreement, the Secretary of Labor shall terminate such agreement ef- fective with the end of the last week which ends on or before the last day of such three-week period.’’ AGREEMENTS UNDER EMERGENCY UNEMPLOYMENT COM- PENSATION ACT OF 1974 TO BE MODIFIED TO REFLECT AMENDMENT OF THE ACT BY EMERGENCY COMPENSA- TION AND SPECIAL UNEMPLOYMENT ASSISTANCE EX- TENSION ACT OF 1975 Pub. L. 94–45, title I, § 105, June 30, 1975, 89 Stat. 239, provided that: ‘‘The Secretary of Labor shall, at the earliest practicable date after the date of the enact- ment of this Act [June 30, 1975], propose to each State with which he has in effect an agreement under section 102 of the Emergency Unemployment Compensation Act of 1974 [Pub. L. 93–567, set out below] a modifica- tion of such agreement designed to provide for the pay- ment of the emergency compensation benefits allow- able under such Act by reason of the amendments made by this part [part A (§§ 101–106) of title I of Pub. L. 94–45, enacting and amending provisions set out as notes under this section]. Notwithstanding any provision of the Emergency Unemployment Compensation Act of 1974, if any State fails or refuses, within the three-week period beginning on the date of the enactment of this Act, to enter into such a modification of such agree- ment, the Secretary of Labor shall terminate such agreement.’’ AGREEMENTS UNDER EMERGENCY UNEMPLOYMENT COM- PENSATION ACT OF 1974 TO BE MODIFIED TO REFLECT AMENDMENT OF THE ACT BY TAX REDUCTION ACT OF 1975 Pub. L. 94–12, title VII, § 701(b), Mar. 29, 1975, 89 Stat. 66, provided that: ‘‘The Secretary of Labor shall, at the earliest practicable date after the enactment of this Act [Mar. 29, 1975], propose to each State with which he has in effect an agreement entered into pursuant to section 102 of the Emergency Unemployment Com- pensation Act of 1974 [Pub. L. 93–572, set out above] a modification of such agreement designed to cause pay- ments of emergency compensation thereunder to be made in the manner prescribed by such Act, as amend- ed by subsection (a) of this section [amending section 102(e) of the Emergency Unemployment Compensation Act of 1974]. Notwithstanding any provision of the Emergency Unemployment Compensation Act of 1974, if any such State shall fail or refuse, within a reasonable time after the date of the enactment of this Act, to enter into such a modification of such agreement, the Secretary of Labor shall terminate such agreement.’’ NATIONAL COMMISSION ON UNEMPLOYMENT COMPENSATION Pub. L. 94–566, title IV, § 411, Oct. 20, 1976, 90 Stat. 2681, as amended by Pub. L. 95–19, title III, § 303, Apr. 12, 1977, 91 Stat. 45; Pub. L. 96–84, §§ 1(a), (b), 2, 3(a), Oct. 10, 1979, 93 Stat. 653, 654, related to establishment, mem- bership, powers, duties, etc., of the National Commis- sion on Unemployment Compensation, and required a final report not later than July 1, 1980, respecting find- ings, conclusions, and recommendations, with termi- nation of the Commission on the ninetieth day after the date of submission of the final report to the Presi- dent. SPECIAL UNEMPLOYMENT ASSISTANCE PROGRAMS Pub. L. 93–567, title II, §§ 201–224, Dec. 31, 1974, 88 Stat. 1850–1853, as amended by Pub. L. 94–45, title II, §§ 201–203, June 30, 1975, 89 Stat. 240–242; Pub. L. 94–444, § 6(a), (b), Oct. 1, 1976, 90 Stat. 1481; Pub. L. 94–566, title VI, §§ 601(a), 602(a)–(d), 603(a), Oct. 20, 1976, 90 Stat. 2689–2691; Pub. L. 96–499, title X, § 1021, Dec. 5, 1980, 94 Stat. 2656; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095; Pub. L. 105–277, div. A, § 101(f) [title VIII, § 405(d)(21), (f)(15)], Oct. 21, 1998, 112 Stat. 2681–337, 2681–422, 2681–431, established, with respect to weeks of unemployment ending before June 30, 1978, temporary Federal program of special unemployment assistance for workers who were unemployed during period of aggravated unem- ployment and who were not otherwise eligible for un- employment allowances under any other law, and pro- vided for Federal reimbursement for unemployment benefits paid on basis of public service employment for services performed in weeks before Dec. 5, 1980. AGREEMENTS UNDER SPECIAL UNEMPLOYMENT ASSIST- ANCE PROGRAM TO BE MODIFIED TO REFLECT AMEND- MENT OF PROGRAM BY EMERGENCY COMPENSATION AND SPECIAL UNEMPLOYMENT ASSISTANCE EXTENSION ACT OF 1975 Pub. L. 94–45, title II, § 204(a), June 30, 1975, 89 Stat. 242, provided that: ‘‘The Secretary of Labor shall, at the earliest practicable date after the date of the en- actment of this Act [June 30, 1975], propose to each State with which he has in effect an agreement under section 202 of the Emergency Jobs and Unemployment Assistance Act of 1974 [Pub. L. 93–567, title II, set out above] a modification of such agreement designed to provide for the payment of the special unemployment assistance allowable under such Act by reason of the amendments made by section 201 [amending sections 206 and 208 of the Emergency Jobs and Unemployment Assistance Act of 1974]. Notwithstanding any other pro- vision of law, if any State fails or refuses, within the three-week period beginning on the date of the enact- ment of this Act [June 30, 1975], to enter into such a modification of any such agreement, the Secretary of Labor shall terminate such agreement.’’ SPECIAL UNEMPLOYMENT ASSISTANCE PROGRAMS; INDI- VIDUALS PERFORMING SERVICES FOR EDUCATIONAL IN- STITUTIONS OR AGENCIES Pub. L. 94–32, title I, § 101, June 12, 1975, 89 Stat. 178, provided in part that: ‘‘Funds appropriated by this Act [Second Supplemental Appropriations Act, 1975], or any other Act, for the payments of special unemployment assistance under title II of the Emergency Jobs and Un- employment Assistance Act of 1974 [Pub. L. 93–567, title II, set out above] shall not be used for making such payments of assistance or waiting period credit, begin- ning after the date of enactment of this Act [June 12, 1975], to any individual who performs services in an in- Page 2802 TITLE 26—INTERNAL REVENUE CODE § 3304 structional, research, or principal administrative ca- pacity for an educational institution or agency with re- spect to any week commencing during the period be- tween two successive academic years (or, when the con- tract provides instead for a similar period between two regular but not successive terms, during such similar period) if— ‘‘(1) such individual performed services in any such capacity for any educational institution or agency for the first of such academic years or terms; and ‘‘(2) such individual has a contract to perform serv- ices in any such capacity for any educational institu- tion or agency for the latter of such academic years or terms.’’ EMERGENCY UNEMPLOYMENT COMPENSATION ACT OF 1971 Pub. L. 92–224, title II, §§ 201–206, Dec. 29, 1971, 85 Stat. 811–814, as amended by Pub. L. 92–329, §§ 1, 2(e), June 30, 1972, 86 Stat. 398; Pub. L. 93–368, § 4(a), Aug. 7, 1974, 88 Stat. 420; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, known as the ‘‘Emergency Unemployment Compensa- tion Act of 1971’’, provided that, for weeks ending be- fore Mar. 31, 1973, qualified States could enter into agreements with the Secretary of Labor for the pay- ment of emergency unemployment compensation to eli- gible individuals who had exhausted their rights to reg- ular compensation under State law. FEDERAL-STATE EXTENDED UNEMPLOYMENT COMPENSATION ACT OF 1970 Pub. L. 91–373, title II, Aug. 10, 1970, 84 Stat. 708, as amended by Pub. L. 92–599, title V, § 501, Oct. 27, 1972, 86 Stat. 1326; Pub. L. 93–53, § 5, July 1, 1973, 87 Stat. 137; Pub. L. 93–233, § 20, Dec. 31, 1973, 87 Stat. 974; Pub. L. 93–256, § 2, Mar. 28, 1974, 88 Stat. 53; Pub. L. 93–329, § 2, June 30, 1974, 88 Stat. 288; Pub. L. 93–368, § 3, Aug. 7, 1974, 88 Stat. 420; Pub. L. 93–572, §§ 106–108, Dec. 31, 1974, 88 Stat. 1872; Pub. L. 94–45, title I, § 102(b), June 30, 1975, 89 Stat. 238; Pub. L. 94–566, title I, § 116(d)(1), (2), title II, § 212(a), title III, § 311(a), (b), Oct. 20, 1976, 90 Stat. 2672, 2677, 2678; Pub. L. 96–364, title IV, § 416(a), Sept. 26, 1980, 94 Stat. 1310; Pub. L. 96–499, title X, §§ 1022(a), 1024(a), Dec. 5, 1980, 94 Stat. 2656, 2658; Pub. L. 97–35, title XXIV, §§ 2401(a), (b), 2402(a), 2403(a), 2404(a), (b), title XXV, § 2505(b), Aug. 13, 1981, 95 Stat. 874, 875, 876, 884; Pub. L. 97–248, title I, § 191(a), Sept. 3, 1982, 96 Stat. 407; Pub. L. 97–258, § 5(b), Sept. 13, 1982, 96 Stat. 1068, 1081; Pub. L. 98–21, title V, § 522(a), Apr. 20, 1983, 97 Stat. 148; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095; Pub. L. 102–318, title II, §§ 201, 202(a)(1), (b)(1), July 3, 1992, 106 Stat. 295, 296; Pub. L. 108–271, § 8(b), July 7, 2004, 118 Stat. 814; Pub. L. 111–312, title V, § 502, Dec. 17, 2010, 124 Stat. 3307; Pub. L. 112–78, title II, § 201(a)(4), Dec. 23, 2011, 125 Stat. 1282; Pub. L. 112–96, title II, §§ 2123(c), 2181(a), Feb. 22, 2012, 126 Stat. 167, 179; Pub. L. 112–240, title V, § 502(c), Jan. 2, 2013, 126 Stat. 2344, provided: ‘‘SEC. 201. [Short Title] This title may be cited as the ‘Federal-State Extended Unemployment Compensation Act of 1970’. ‘‘SEC. 202. [Payment of Extended Compensation] ‘‘(a) [State Law Requirements] (1) For purposes of section 3304(a)(11) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], a State law shall provide the payment of extended compensation shall be made, for any week of unemployment which begins in the indi- vidual’s eligibility period, to individuals who have ex- hausted all rights to regular compensation under the State law and who have no rights to regular compensa- tion with respect to such week under such law or any other State unemployment compensation law or to compensation under any other Federal law and are not receiving compensation with respect to such week under the unemployment compensation law of Canada. For purposes of the preceding sentence, an individual shall have exhausted his rights to regular compensa- tion under a State law (A) when no payments of regular compensation can be made under such law because such individual has received all regular compensation avail- able to him based on employment or wages during his base period, or (B) when his rights to such compensa- tion have terminated by reason of the expiration of the benefit year with respect to which such rights existed. ‘‘(2) Except where inconsistent with the provisions of this title, the terms and conditions of the State law which apply to claims for regular compensation and to the payment thereof shall apply to claims for extended compensation and to the payment thereof. ‘‘(3)(A) Notwithstanding the provisions of paragraph (2), payment of extended compensation under this Act [see Short Title of 1970 Amendment note set out under section 3311 of this title] shall not be made to any indi- vidual for any week of unemployment in his eligibility period— ‘‘(i) during which he fails to accept any offer of suitable work (as defined in subparagraph (c) [prob- ably means subpar. (C)]) or fails to apply for any suit- able work to which he was referred by the State agen- cy; or ‘‘(ii) during which he fails to actively engage in seeking work, unless such individual is not actively engaged in seeking work because such individual is, as determined in accordance with State law— ‘‘(I) before any court of the United States or any State pursuant to a lawfully issued summons to ap- pear for jury duty (as such term may be defined by the Secretary of Labor), or ‘‘(II) hospitalized for treatment of an emergency or a life-threatening condition (as such term may be defined by such Secretary), if such exemptions in clauses (I) and (II) apply to re- cipients of regular benefits, and the State chooses to apply such exemptions for recipients of extended ben- efits. ‘‘(B) If any individual is ineligible for extended com- pensation for any week by reason of a failure described in clause (i) or (ii) of subparagraph (A), the individual shall be ineligible to receive extended compensation for any week which begins during a period which— ‘‘(i) begins with the week following the week in which such failure occurs, and ‘‘(ii) does not end until such individual has been employed during at least 4 weeks which begin after such failure and the total of the remuneration earned by the individual for being so employed is not less than the product of 4 multiplied by the individual’s average weekly benefit amount (as determined for purposes of subsection (b)(1)(c) [probably means sub- sec. (b)(1)(C)]) for his benefit year. ‘‘(C) For purposes of this paragraph, the term ‘suit- able work’ means, with respect to any individual, any work which is within such individual’s capabilities; ex- cept that, if the individual furnishes evidence satisfac- tory to the State agency that such individual’s pros- pects for obtaining work in his customary occupation within a reasonably short period are good, the deter- mination of whether any work is suitable work with re- spect to such individual shall be made in accordance with the applicable State law. ‘‘(D) Extended compensation shall not be denied under clause (i) of subparagraph (A) to any individual for any week by reason of a failure to accept an offer of, or apply for, suitable work— ‘‘(i) if the gross average weekly remuneration pay- able to such individual for the position does not ex- ceed the sum of— ‘‘(I) the individual’s average weekly benefit amount (as determined for purposes of subsection (b)(1)(C)) for his benefit year, plus ‘‘(II) the amount (if any) of supplemental unem- ployment compensation benefits (as defined in sec- tion 501(c)(17)(D) of the Internal Revenue Code of 1986) payable to such individual for such week; ‘‘(ii) if the position was not offered to such indi- vidual in writing and was not listed with the State employment service; ‘‘(iii) if such failure would not result in a denial of compensation under the provisions of the applicable State law to the extent that such provisions are not Page 2803 TITLE 26—INTERNAL REVENUE CODE § 3304 inconsistent with the provisions of subparagraphs (C) and (E); or ‘‘(iv) if the position pays wages less than the higher of— ‘‘(I) the minimum wage provided by section 6(a)(1) of the Fair Labor Standards Act of 1938 [29 U.S.C. 206(a)(1)], without regard to any exemption; or ‘‘(II) any applicable State or local minimum wage. ‘‘(E) For purposes of this paragraph, an individual shall be treated as actively engaged in seeking work during any week if— ‘‘(i) the individual has engaged in a systematic and sustained effort to obtain work during such week, and ‘‘(ii) the individual provides tangible evidence to the State agency that he has engaged in such an ef- fort during such week. ‘‘(F) For purposes of section 3304(a)(11) of the Internal Revenue Code of 1986, a State law shall provide for re- ferring applicants for benefits under this Act [see Short Title of 1970 Amendment note set out under section 3311 of this title] to any suitable work to which clauses (i), (ii), (iii), and (iv) of subparagraph (D) would not apply. ‘‘(4) No provision of State law which terminates a dis- qualification for voluntarily leaving employment, being discharged for misconduct, or refusing suitable employment shall apply for purposes of determining eligibility for extended compensation unless such ter- mination is based upon employment subsequent to the date of such disqualification. ‘‘(5) Notwithstanding the provisions of paragraph (2), an individual shall not be eligible for extended com- pensation unless, in the base period with respect to which the individual exhausted all rights to regular compensation under the State law, the individual had 20 weeks of full-time insured employment, or the equiv- alent in insured wages. For purposes of this paragraph, the equivalent in insured wages shall be earnings cov- ered by the State law for compensation purposes which exceed 40 times the individual’s most recent weekly benefit amount or 11⁄2 times the individual’s insured wages in that calendar quarter of the base period in which the individual’s insured wages were the highest (or one such quarter if his wages were the same for more than one such quarter). The State shall by law provide which one or more of the foregoing methods of measuring employment and earnings shall be used in that State. ‘‘(6) No payment shall be made under this Act [see Short Title of 1970 Amendment note set out under sec- tion 3311 of this title] to any State in respect of any ex- tended compensation or sharable regular compensation paid to any individual for any week if, under the rules of paragraphs (3), (4), and (5), extended compensation would not have been payable to such individual for such week. ‘‘(7) Paragraphs (3) and (4) shall not apply to weeks of unemployment beginning after March 6, 1993, and be- fore January 1, 1995, and no provision of State law in conformity with such paragraphs shall apply during such period. ‘‘(b) [Individual’s Compensation Accounts] (1) The State law shall provide that the State will establish, for each eligible individual who files an application therefor, an extended compensation account with re- spect to such individual’s benefit year. The amount es- tablished in such account shall be not less than which- ever of the following is the least: ‘‘(A) 50 per centum of the total amount of regular compensation (including dependents’ allowances) payable to him during such benefit year under such law, ‘‘(B) thirteen times his average weekly benefit amount, or ‘‘(C) thirty-nine times his average weekly benefit amount, reduced by the regular compensation paid (or deemed paid) to him during such benefit year under such law; except that the amount so determined shall (if the State law so provides) be reduced by the aggregate amount of additional compensation paid (or deemed paid) to him under such law for prior weeks of unem- ployment in such benefit year which did not begin in an extended benefit period. ‘‘(2) For purposes of paragraph (1), an individual’s weekly benefit amount for a week is the amount of reg- ular compensation (including dependents’ allowances) under the State law payable to such individual for such week for total unemployment. ‘‘(3)(A) Effective with respect to weeks beginning in a high unemployment period, paragraph (1) shall be ap- plied by substituting— ‘‘(i) ‘80 per centum’ for ‘50 per centum’ in subpara- graph (A), ‘‘(ii) ‘twenty’ for ‘thirteen’ in subparagraph (B), and ‘‘(iii) ‘forty-six’ for ‘thirty-nine’ in subparagraph (C). ‘‘(B) For purposes of subparagraph (A), the term ‘high unemployment period’ means any period during which an extended benefit period would be in effect if section 203(f)(1)(A)(i) were applied by substituting ‘8 percent’ for ‘6.5 percent’. ‘‘(c) [Cessation of Extended Benefits When Paid Under an Interstate Claim in a State Where Extended Benefit Period Is Not in Effect] (1) Except as provided in paragraph (2), payment of extended compensation shall not be made to any individual for any week if— ‘‘(A) extended compensation would (but for this subsection) have been payable for such week pursuant to an interstate claim filed in any State under the interstate benefit payment plan, and ‘‘(B) an extended benefit period is not in effect for such week in such State. ‘‘(2) Paragraph (1) shall not apply with respect to the first 2 weeks for which extended compensation is pay- able (determined without regard to this subsection) pursuant to an interstate claim filed under the inter- state benefit payment plan to the individual from the extended compensation account established for the benefit year. ‘‘(3) Section 3304(a)(9)(A) of the Internal Revenue Code of 1986 shall not apply to any denial of compensa- tion required under this subsection. ‘‘SEC. 203. [Extended Benefit Period] ‘‘(a) [Beginning and Ending] For purposes of this title, in the case of any State, an extended benefit pe- riod— ‘‘(1) shall begin with the third week after the first week for which there is a State ‘on’ indicator; and ‘‘(2) shall end with the third week after the first week for which there is a State ‘off’ indicator. ‘‘(b) [Special Rules] (1) In the case of any State— ‘‘(A) no extended benefit period shall last for a pe- riod of less than thirteen consecutive weeks, and ‘‘(B) no extended benefit period may begin before the fourteenth week after the close of a prior ex- tended benefit period with respect to such State. ‘‘(2) When a determination has been made that an ex- tended benefit period is beginning or ending with re- spect to a State, the Secretary shall cause notice of such determination to be published in the Federal Reg- ister. ‘‘(c) [Eligibility Period] For purposes of this title, an individual’s eligibility period under the State law shall consist of the weeks in his benefit year which begin in an extended benefit period and, if his benefit year ends within such extended benefit period, any weeks there- after which begin in such extended benefit period. ‘‘(d) [State ‘On’ and ‘Off’ Indicators] For purposes of this section— ‘‘(1) There is a State ‘on’ indicator for a week if the rate of insured unemployment under the State law for the period consisting of such week and the imme- diately preceding twelve weeks— ‘‘(A) equaled or exceeded 120 per centum of the av- erage of such rates for the corresponding thirteen- week period ending in each of the preceding two calendar years, and ‘‘(B) equaled or exceeded 5 per centum. ‘‘(2) There is a State ‘off’ indicator for a week if, for the period consisting of such week and the imme- Page 2804 TITLE 26—INTERNAL REVENUE CODE § 3304 diately preceding twelve weeks, either subparagraph (A) or subparagraph (B) of paragraph (1) is not satis- fied. Effective with respect to compensation for weeks of un- employment beginning after March 30, 1977 (or, if later, the date established pursuant to State law), the State may by law provide that the determination of whether there has been a State ‘on’ or ‘off’ indicator beginning or ending any extended benefit period shall be made under this subsection as if (i) paragraph (1) did not con- tain subparagraph (A) thereof, and (ii) the figure ‘5’ contained in subparagraph (B) thereof were ‘6’; except that, notwithstanding any such provision of State law, any week for which there would otherwise be a State ‘on’ indicator shall continue to be such a week and shall not be determined to be a week for which there is a State ‘off’ indicator. Effective with respect to com- pensation for weeks of unemployment beginning after the date of enactment of the Tax Relief, Unemploy- ment Insurance Reauthorization, and Job Creation Act of 2010 [Dec. 17, 2010] (or, if later, the date established pursuant to State law), and ending on or before Decem- ber 31, 2013, the State may by law provide that the de- termination of whether there has been a state [State] ‘on’ or ‘off’ indicator beginning or ending any extended benefit period shall be made under this subsection as if the word ‘two’ were ‘three’ in subparagraph (1)(A). For purposes of this subsection, the rate of insured unem- ployment for any thirteen-week period shall be deter- mined by reference to the average monthly covered em- ployment under the State law for the first four of the most recent six calendar quarters ending before the close of such period. ‘‘(e) [Rate of Insured Unemployment; Covered Em- ployment] (1) For purposes of subsection (d), the term ‘rate of insured unemployment’ means the percentage arrived at by dividing— ‘‘(A) the average weekly number of individuals fil- ing claims for regular compensation for weeks of un- employment with respect to the specified period, as determined on the basis of the reports made 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 State agency in accordance with regula- tions prescribed by the Secretary. ‘‘(f) [Alternative Trigger] (1) Effective with respect to compensation for weeks of unemployment beginning after March 6, 1993, the State may by law provide that for purposes of beginning or ending any extended ben- efit period under this section— ‘‘(A) there is a State ‘on’ indicator for a week if— ‘‘(i) the average rate of total unemployment in such State (seasonally adjusted) for the period con- sisting of the most recent 3 months for which data for all States are published before the close of such week equals or exceeds 6.5 percent, and ‘‘(ii) the average rate of total unemployment in such State (seasonally adjusted) for the 3-month pe- riod referred to in clause (i) equals or exceeds 110 percent of such average rate for either (or both) of the corresponding 3-month periods ending in the 2 preceding calendar years; and ‘‘(B) there is a State ‘off’ indicator for a week if ei- ther the requirements of clause (i) or clause (ii) of subparagraph (A) are not satisfied. Notwithstanding the provision of any State law de- scribed in this paragraph, any week for which there would otherwise be a State ‘on’ indicator shall con- tinue to be such a week and shall not be determined to be a week for which there is a State ‘off’ indicator. ‘‘(2) Effective with respect to compensation for weeks of unemployment beginning after the date of enact- ment of the Tax Relief, Unemployment Insurance Re- authorization, and Job Creation Act of 2010 [Dec. 17, 2010] (or, if later, the date established pursuant to State law), and ending on or before December 31, 2013, the State may by law provide that the determination of whether there has been a state [State] ‘on’ or ‘off’ indi- cator beginning or ending any extended benefit period shall be made under this subsection as if the word ‘ei- ther’ were ‘any’, the word ‘both’ were ‘all’, and the fig- ure ‘2’ were ‘3’ in clause (1)(A)(ii). ‘‘(3) For purposes of this subsection, determinations of the rate of total unemployment in any State for any period (and of any seasonal adjustment) shall be made by the Secretary. ‘‘SEC. 204. [Payments to States] ‘‘(a) [Amount Payable] (1) There shall be paid to each State an amount equal to one-half of the sum of— ‘‘(A) the sharable extended compensation, and ‘‘(B) the sharable regular compensation, paid to individuals under the State law. ‘‘(2) No payment shall be made to any State under this subsection in respect of compensation (A) for which the State is entitled to reimbursement under the provisions of any Federal law other than this Act, (B) paid for the first week in an individual’s eligibility pe- riod for which extended compensation or sharable reg- ular compensation is paid, if the State law of such State provides for payment (at any time or under any circumstances) of regular compensation to an indi- vidual for his first week of otherwise compensable un- employment, (C) paid for any week with respect to which such benefits are not payable by reason of sec- tion 233(d) [now 233(c)] of the Trade Act of 1974 [19 U.S.C. 2293(c)], or (D) paid to an individual with respect to a week of unemployment to the extent that such amount exceeds the amount of such compensation which would be paid to such individual if such State had a benefit structure which provided that the amount of compensation otherwise payable to any individual for any week shall be rounded (if not a full dollar amount) to the nearest lower full dollar amount. ‘‘(3) The amount which, but for this paragraph, would be payable under this subsection to any State in re- spect of any compensation paid to an individual whose base period wages include wages for services to which section 3306(c)(7) of the Internal Revenue Code of 1986 applies shall be reduced by an amount which bears the same ratio to the amount which, but for this para- graph, would be payable under this subsection to such State in respect of such compensation as the amount of the base period wages attributable to such services bears to the total amount of the base period wages. ‘‘(b) [Sharable Extended Compensation] For purposes of subsection (a)(1)(A), extended compensation paid to an individual for weeks of unemployment in such indi- vidual’s eligibility period is sharable extended com- pensation 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(b)(1). ‘‘(c) [Sharable Regular Compensation] For purposes of subsection (a)(1)(B), regular compensation paid to an individual for a week of unemployment is sharable reg- ular 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 compensa- tion, plus the regular compensation paid (or deemed paid) to him with respect to prior weeks of unemploy- ment in the benefit year, exceeds twenty-six times (and does not exceed thirty-nine, forty-six in any case where section 202(b)(3)(A) applies[,] times) the aver- age weekly benefit amount (including allowances for dependents) for weeks of total unemployment pay- able to such individual under the State law in such benefit year. ‘‘(d) [Payment on Calendar Month Basis] There shall be paid to each State either in advance or by way of re- imbursement, 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 esti- mates for any prior calendar month were greater or less than the amounts which should have been paid to Page 2805 TITLE 26—INTERNAL REVENUE CODE § 3304 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. ‘‘(e) [Certification] The Secretary shall from time to time certify to the Secretary of the Treasury for pay- ment to each State the sums payable to such State under this section. The Secretary of the Treasury, prior to audit or settlement by the Government Account- ability Office, shall make payment to the State in ac- cordance with such certification, by transfers from the extended unemployment compensation account to the account of such State in the Unemployment Trust Fund. ‘‘SEC. 205. [Definitions] For purposes of this title— ‘‘(1) The term ‘compensation’ means cash benefits payable to individuals with respect to their unem- ployment. ‘‘(2) The term ‘regular compensation’ means com- pensation payable to an individual under any State unemployment compensation law (including com- pensation payable pursuant to 5 U.S.C. chapter 85), other than extended compensation and additional compensation. ‘‘(3) The term ‘extended compensation’ means com- pensation (including additional compensation and compensation payable pursuant to 5 U.S.C. chapter 85) 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 pay- ment of extended compensation. ‘‘(4) The term ‘additional compensation’ means compensation payable to exhaustees by reason of con- ditions 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 Co- lumbia, the Commonwealth of Puerto Rico, and the Virgin Islands. ‘‘(9) The term ‘State agency’ means the agency of the State which administers its State law. ‘‘(10) The term ‘State law’ means the unemploy- ment compensation law of the State, approved by the Secretary under section 3304 of the Internal Revenue Code of 1986. ‘‘(11) The term ‘week’ means a week as defined in the applicable State law. ‘‘SEC. 206. [Approval of State Laws] [This section amended section 3304(a) of the Internal Revenue Code by adding par. (11) thereof.] ‘‘SEC. 207. [Effective Dates] (a) Except as provided in subsection (b)— ‘‘(1) in applying section 203, no extended benefit pe- riod may begin with a week beginning before January 1, 1972; and ‘‘(2) section 204 shall apply only with respect to weeks of unemployment beginning after December 31, 1971. ‘‘(b)(1) In the case of a State law approved under sec- tion 3304(a)(11) of the Internal Revenue Code of 1986, such State law may also provide that an extended ben- efit period may begin with a week established pursuant to such law which begins earlier than January 1, 1972, but not earlier than 60 days after the date of the enact- ment of this Act [Aug. 10, 1970]. ‘‘(2) For purposes of paragraph (1) with respect to weeks beginning before January 1, 1972, the extended benefit period for the State shall be determined under section 203(a) solely by reference to the State ‘on’ indi- cator and the State ‘off’ indicator. ‘‘(3) In the case of a State law containing a provision described in paragraph (1), section 204 shall also apply with respect to weeks of unemployment in extended benefit periods determined pursuant to paragraph (1). ‘‘(c) Section 3304(a)(11) of the Internal Revenue Code of 1986 (as added by section 206) shall not be a require- ment for the State law of any State— ‘‘(1) in the case of any State the legislature of which does not meet in a regular session which closes during the calendar year 1971, with respect to any week of unemployment which begins prior to July 1, 1972; or ‘‘(2) in the case of any other State, with respect to any week of unemployment which begins prior to January 1, 1972. ‘‘SEC. 208. [Authority to Conduct Self-Employment Assistance Programs] (a)(1) At the option of a State, for any weeks of unemployment beginning after the date of enactment of this section [Feb. 22, 2012], the State agency of the State may establish a self-employ- ment assistance program, as described in subsection (b), to provide for the payment of extended compensa- tion as self-employment assistance allowances to indi- viduals who would otherwise satisfy the eligibility cri- teria under this title. ‘‘(2) Subject to paragraph (3), the self-employment as- sistance allowance described in paragraph (1) shall be paid to an eligible individual from such individual’s ex- tended compensation account, as described in section 202(b), and the amount in such account shall be reduced accordingly. ‘‘(3)(A) Subject to subparagraph (B), for purposes of self-employment assistance programs established under this section and section 4001(j) of the Supplemental Ap- propriations Act, 2008 [Pub. L. 110–252, set out above], an individual shall be provided with self-employment assistance allowances under such programs for a total of not greater than 26 weeks (referred to in this section as the ‘combined eligibility limit’). ‘‘(B) For purposes of an individual who is partici- pating in a self-employment assistance program estab- lished under this section and has not reached the com- bined eligibility limit as of the date on which such in- dividual exhausts all rights to extended compensation under this title, the individual shall be eligible to re- ceive self-employment assistance allowances under a self-employment assistance program established under section 4001(j) of the Supplemental Appropriations Act, 2008 [Pub. L. 110–252, set out above], until such indi- vidual has reached the combined eligibility limit, pro- vided that the individual otherwise satisfies the eligi- bility criteria described under title IV of such Act [set out above]. ‘‘(b) For the purposes of this section, the term ‘self- employment assistance program’ means a program as defined under section 3306(t) of the Internal Revenue Code of 1986, except as follows: ‘‘(1) all references to ‘regular unemployment com- pensation under the State law’ shall be deemed to refer instead to ‘extended compensation under title II of the Federal-State Extended Unemployment Com- pensation Act of 1970’ [this note]; ‘‘(2) paragraph (3)(B) shall not apply; ‘‘(3) clause (i) of paragraph (3)(C) shall be deemed to state as follows: ‘‘ ‘(i) include any entrepreneurial training that the State or non-profit organizations may provide in coordination with programs of training offered by the Small Business Administration, which may include business counseling, mentorship for partici- pants, access to small business development re- sources, and technical assistance; and’; ‘‘(4) the reference to ‘5 percent’ in paragraph (4) shall be deemed to refer instead to ‘1 percent’; and ‘‘(5) paragraph (5) shall not apply. ‘‘(c) In the case of an individual who is eligible to re- ceive extended compensation under this title, such in- dividual shall not receive self-employment assistance allowances under this section unless the State agency has a reasonable expectation that such individual will be entitled to at least 13 times the individual’s average weekly benefit amount of extended compensation and emergency unemployment compensation. ‘‘(d)(1) An individual who is participating in a self- employment assistance program established under this Page 2806 TITLE 26—INTERNAL REVENUE CODE § 3304 section may elect to discontinue participation in such program at any time. ‘‘(2) For purposes of an individual whose participation in a self-employment assistance program established under this section is terminated pursuant to subsection (a)(3) or who has discontinued participation in such program, if the individual continues to satisfy the eli- gibility requirements for extended compensation under this title, the individual shall receive extended com- pensation payments with respect to subsequent weeks of unemployment, to the extent that amounts remain in the account established for such individual under section 202(b).’’ [Amendment by section 502(c) of Pub. L. 112–240 to section 203 of Pub. L. 91–373, set out above, effective as if included in the enactment of subtitle B of title II of Pub. L. 112–96, see section 502(d) of Pub. L. 112–240, set out following section 2005 of Pub. L. 111–5 above.] [Amendment by section 2123(c) of Pub. L. 112–96 to section 203 of Pub. L. 91–373, set out above, effective as if included in the enactment of Pub. L. 112–78, see sec- tion 2123(d) of Pub. L. 112–96, set out following section 2005 of Pub. L. 111–5 above.] [Amendment by section 201(a)(4) of Pub. L. 112–78 to section 203 of Pub. L. 91–373, set out above, effective as if included in the enactment of Pub. L. 111–312, see sec- tion 201(c) of Pub. L. 112–78, set out following section 2005 of Pub. L. 111–5 above.] [Pub. L. 102–318, title II, § 202(a)(2), July 3, 1992, 106 Stat. 296, provided that: [‘‘(A) IN GENERAL.—Notwithstanding any other provi- sion of law, the amendment made by paragraph (1) [amending section 202(a)(5) of Pub. L. 91–373, set out above] shall apply for purposes of extended unemploy- ment compensation and emergency unemployment compensation to weeks of unemployment beginning on or after the date of the enactment of this Act [July 3, 1992]. [‘‘(B) WAIVER OF RECOVERY OF CERTAIN OVERPAY- MENTS.—On and after the date of the enactment of this Act, no repayment of any emergency unemployment compensation shall be required under section 105 of the Emergency Unemployment Compensation Act of 1991 (Public Law 102–164, as amended [formerly set out above]) if the individual would have been entitled to re- ceive such compensation had the amendment made by paragraph (1) applied to all weeks beginning before the date of the enactment of this Act.’’] [Pub. L. 98–21, title V, § 522(b), Apr. 20, 1983, 97 Stat. 148, provided that: ‘‘The amendment made by this sec- tion [amending section 202(a)(3)(A)(ii) of Pub. L. 91–373, set out above] shall become effective on the date of the enactment of this Act [Apr. 20, 1983].’’] [Pub. L. 97–248, title I, § 191(b), Sept. 3, 1982, 96 Stat. 407, provided that: [‘‘(1) Except as provided in paragraph (2), the amend- ments made by this section [amending section 204(a)(2) of Pub. L. 91–373, set out above] shall apply in the case of compensation paid to individuals during eligibility periods beginning on or after October 1, 1983. [‘‘(2) In the case of a State with respect to which the Secretary of Labor has determined that State legisla- tion is required in order to provide for rounding down of unemployment compensation amounts, the amend- ment made by this section [amending section 204(a)(2) of Pub. L. 91–373, set out above] shall apply in the case of compensation paid to individuals during eligibility periods which begin on or after October 1, 1983, and after the end of the first session of the State legislature which begins after the date of the enactment of this Act [Sept. 3, 1982], or which began prior to the date of the enactment of this Act and remained in session for at least twenty-five calendar days after such date of en- actment. For purposes of the preceding sentence, the term ‘session’ means a regular, special, budget, or other session of a State legislature.’’] [Pub. L. 97–35, title XXIV, § 2401(c), Aug. 13, 1981, 95 Stat. 875, provided that: ‘‘The amendments made by this section [amending sections 203 and 204(a)(3), (4) of Pub. L. 91–373, set out above] shall apply to weeks be- ginning after the date of the enactment of this Act [Aug. 13, 1981].’’] [Pub. L. 97–35, title XXIV, § 2402(b), Aug. 13, 1981, 95 Stat. 875, provided that: ‘‘The amendment made by sub- section (a) [amending section 203(e)(1)(A) of Pub. L. 91–373, set out above] shall apply for purposes of deter- mining whether there are State ‘on’ or ‘off’ indicators for weeks beginning after the date of the enactment of this Act [Aug. 13, 1981]. For purposes of making such determinations for such weeks, such amendment shall be deemed to be in effect for all weeks whether begin- ning before, on, or after such date of enactment.’’] [Pub. L. 97–35, title XXIV, § 2403(b), Aug. 13, 1981, 95 Stat. 875, provided that: ‘‘The amendments made by subsection (a) [amending section 203(d) of Pub. L. 91–373, set out above] shall apply to weeks beginning after September 25, 1982.’’] [Pub. L. 97–35, title XXIV, § 2404(c), Aug. 13, 1981, 95 Stat. 876, provided that: ‘‘The amendments made by this section [amending section 202(a)(5), (6) of Pub. L. 91–373, set out above] shall apply with respect to ex- tended compensation and sharable regular compensa- tion payable for weeks which begin after September 25, 1982.’’] [Amendment by sections 2401–2404 of Pub. L. 97–35 (amending Pub. L. 91–373, set out above) required to be included in State unemployment compensation laws for purposes of certifications, see section 2408(b) of Pub. L. 97–35, set out above.] [Amendment by section 2505(b) of Pub. L. 97–35 (amending section 204(a)(2)(C) of Pub. L. 91–373, set out above) applicable to allowances payable for weeks of unemployment which begin after Sept. 30, 1981, and transitional provisions applicable, see section 2514 of Pub. L. 97–35, set out as an Effective Date of 1981 Amendment and Transitional Provisions note under section 2291 of Title 19, Customs Duties.] [Pub. L. 96–499, title X, § 1022(b), Dec. 5, 1980, 94 Stat. 2656, provided that: [‘‘(1) Except as provided in paragraph (2), the amend- ments made by this section [amending section 204(a)(2) of Pub. L. 91–373, set out above] shall apply in the case of compensation paid to individuals during eligibility periods beginning on or after the date of the enactment of this Act [Dec. 5, 1980]. [‘‘(2) In the case of a State with respect to which the Secretary of Labor has determined that State legisla- tion is required in order to eliminate its current policy of paying regular compensation to an individual for his first week of otherwise compensable unemployment, the amendments made by this section [amending sec- tion 204(a)(2) of Pub. L. 91–373, set out above] shall apply in the case of compensation paid to individuals during eligibility periods beginning after the end of the first regularly scheduled session of the State legisla- ture ending more than thirty days after the date of the enactment of this Act [Dec. 5, 1980].’’] [Pub. L. 96–499, title X, § 1024(b), Dec. 5, 1980, 94 Stat. 2660, provided that: ‘‘The amendment made by this sec- tion [amending section 202(a) of Pub. L. 91–373, set out above] shall apply with respect to weeks of unemploy- ment beginning after March 31, 1981.’’] [Pub. L. 96–364, title IV, § 416(b), Sept. 26, 1980, 94 Stat. 1311, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: [‘‘(1) IN GENERAL.—The amendment made by sub- section (a) [amending subsec. 202(c) of Pub. L. 91–373, set out above] shall apply to weeks of unemployment beginning after October 1, 1980; except that such amendment shall not be a requirement of any State law under section 3304(a)(11) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for any week which begins before June 1, 1981. [‘‘(2) SPECIAL RULE FOR CERTAIN STATES.—In the case of any State the legislature of which does not meet in a regular session which begins during cal- endar year 1981 and before April 1, 1981, paragraph (1) shall be applied by substituting ‘June 1, 1982’ for ‘June 1, 1981’.’’] [Section 116(f)(1) of Pub. L. 94–566, set out as an Effec- tive Date of 1976 Amendment note above, provided in Page 2807 TITLE 26—INTERNAL REVENUE CODE § 3305 part that the deletion of ‘‘the Virgin Islands or’’ from section 202(a)(1) of Pub. L. 91–373, set out above, and the insertion of ‘‘and the Virgin Islands’’ in section 205(8) thereof shall take effect on the later of Oct. 1, 1976, or the day after the day on which the Secretary of Labor approves under section 3304(a) of this title an unem- ployment compensation law submitted to him by the Virgin Islands for approval.] [Pub. L. 94–566, title II, § 212(b), Oct. 20, 1976, 90 Stat. 2677, provided that: ‘‘The amendment made by this sec- tion [enacting section 204(a)(4) of Pub. L. 91–373, set out above] shall apply with respect to compensation paid for weeks of unemployment beginning on or after Janu- ary 1, 1979.’’] [Pub. L. 94–566, title III, § 311(c), Oct. 20, 1976, 90 Stat. 2679, provided that: ‘‘The amendment made by sub- section (a) of this section [amending section 203(d) of Pub. L. 91–373, set out above] shall apply to weeks be- ginning after December 31, 1976, and the amendments made by subsection (b) of this section [amending sec- tion 203(e) of Pub. L. 91–373, set out above] shall apply to weeks beginning after March 30, 1977.’’] STUDY AND REPORT BY SECRETARY OF LABOR COVERING EMERGENCY UNEMPLOYMENT COMPENSATION PROGRAM AND SPECIAL UNEMPLOYMENT ASSISTANCE PROGRAM; REPORT ON OR BEFORE JAN. 1, 1977 Pub. L. 94–45, title I, § 104, June 30, 1975, 89 Stat. 238, provided that: ‘‘The Secretary of Labor shall conduct a study and review of the program established by the Emergency Unemployment Compensation Act of 1974 [Pub. L. 93–572, set out above] and the program estab- lished under title II of the Emergency Jobs and Unem- ployment Assistance Act of 1974 [Pub. L. 93–567, title II, set out above] and shall submit to the Congress not later than January 1, 1977, a report on such study and review. Such study and review shall include— ‘‘(1) the employment, economic, and demographic characteristics of individuals receiving benefits under either such program, ‘‘(2) the needs of the long-term unemployed for job counseling, testing, referral and placement services, skill and apprenticeship training, career-related edu- cation programs, and public service employment op- portunities, and ‘‘(3) an examination of all other benefits to which individuals receiving benefits under either such pro- gram are eligible together with an investigation of important factors affecting unemployment, a com- parison of the aggregate value of such other benefits plus benefits received under either such program with the amount of compensation received by such indi- viduals in their most recent position of employ- ment.’’ LOANS TO UNEMPLOYMENT FUND OF VIRGIN ISLANDS Pub. L. 94–45, title III, § 301, June 30, 1975, 89 Stat. 243, as amended by Pub. L. 94–354, July 12, 1976, 90 Stat. 888; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘(a) The Secretary of Labor (hereinafter in this sec- tion referred to as the ‘Secretary’) may make loans to the Virgin Islands in such amounts as he determines to be necessary for the payment in any month of com- pensation under the unemployment compensation law of the Virgin Islands. A loan may be made under this subsection for the payment of compensation in any month only if— ‘‘(1) the Governor of the Virgin Islands submits an application therefor no earlier than the first day of the preceding month; and ‘‘(2) such application contains an estimate of the amount of the loan which will be required by the Vir- gin Islands for the payment of compensation in such month. ‘‘(b) For purposes of this section— ‘‘(1) an application for loan under subsection (a) shall be made on such forms and shall contain such information and data (fiscal and otherwise) con- cerning the operation and administration of the un- employment compensation law of the Virgin Islands as the Secretary deems necessary or relevant to the performance of his duties under this section; ‘‘(2) the amount required by the Virgin Islands for the payment of compensation in any month shall be determined with due allowance for contingencies and taking into account all other amounts that will be available in the unemployment fund of the Virgin Is- lands for the payment of compensation in such month; and ‘‘(3) the term ‘compensation’ means cash benefits payable to individuals with respect to their unem- ployment, exclusive of expenses of administration. ‘‘(c) Any loan made under subsection (a) shall be re- payable (without interest) not later than January 1, 1979. If after January 1, 1979, any portion of any such loan remains unpaid, the Virgin Islands shall pay inter- est thereon, until the loan is paid in full, at a rate equal to the rate of interest in effect under section 6621 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. If at some future date the Federal Unemployment Tax Act [section 3301 et seq. of this title] shall be made applicable to the Virgin Islands, then, any amount of principal or interest due on any such loan remaining unpaid on such date shall be treated, for purposes of section 3302(c)(3) of the Internal Revenue Code of 1986, as an advance made to the Virgin Islands under title XII of the Social Security Act [42 U.S.C. 1321 et seq.]. ‘‘(d) No loan may be made under subsection (a) for any month beginning after September 30, 1977. The ag- gregate of the loans which may be made under sub- section (a) shall not exceed $15,000,000. ‘‘(e) There are authorized to be appropriated from the general fund of the Treasury such sums as may be nec- essary to carry out this section.’’ UNEMPLOYMENT COMPENSATION LAW OF COMMONWEALTH OF PUERTO RICO Pub. L. 86–778, title V, § 543(b), Sept. 13, 1960, 74 Stat. 986, provided that: ‘‘The unemployment compensation law of the Commonwealth of Puerto Rico shall be con- sidered as meeting the requirements of— ‘‘(1) Section 3304(a)(2) of the Federal Unemployment Tax Act [26 U.S.C. 3304(a)(2)], if such law provides that no compensation is payable with respect to any day of unemployment occurring before January 1, 1959. ‘‘(2) Section 3304(a)(3) of the Federal Unemployment Tax Act [26 U.S.C. 3304(a)(3)] and section 303(a)(4) of the Social Security Act [42 U.S.C. 503(a)(4)], if such law contains the provisions required by those sec- tions and if it requires that, on or before February 1, 1961, there be paid over to the Secretary of the Treas- ury, for credit to the Puerto Rico account in the Un- employment Trust Fund, an amount equal to the ex- cess of— ‘‘(A) the aggregate of the moneys received in the Puerto Rico unemployment fund before January 1, 1961, over ‘‘(B) the aggregate of the moneys paid from such fund before January 1, 1961, as unemployment com- pensation or as refunds of contributions erro- neously paid.’’ § 3305. Applicability of State law (a) Interstate and foreign commerce No person required under a State law to make payments to an unemployment fund shall be re- lieved from compliance therewith on the ground that he is engaged in interstate or foreign com- merce, or that the State law does not distin- guish between employees engaged in interstate or foreign commerce and those engaged in intra- state commerce. (b) Federal instrumentalities in general The legislature of any State may require any instrumentality of the United States (other