contributions under such State law, reported by employers as paid for services covered under such State law during the first four of the last six completed calendar quarters prior to the effective date of the computation, divided by a figure representing fifty-two times the twelve-month average of the number of employees in the pay period ending nearest the fifteenth day of each month during the same four calendar quarters, as reported by such employers."

LIMITATION ON CREDIT AGAINST TAX

SEC. 210. (a) Section 3302 of the Internal Revenue Code of 1954 is amended by adding at the end of subsection (c) thereof a new paragraph (4) as follows:

"(4) If the unemployment compensation law of a State has not been certified for a twelve-month period ending on October 31 pursuant to section 3309 (a), then the total credits (after applying subsections (a) and (b) and paragraphs (1), (2), and (3) of this subsection) otherwise allowable under this section for the taxable year in which such October 31 occurs in the case of a taxpayer subject to the unemployment compensation law of such State shall be reduced by the amount by which 2.7 percent exceeds the fouryear benefit cost rate applicable to such State for such taxable year in accordance with the notification of the Secretary of Labor pursuant to section 3309 (a)."

(b) Subsection (c)(3)(C)(i) of section 3302 is amended by substituting the term "4-year" for the term “5-year.”

(c) Paragraph (5) of subsection (d) of section 3302 is amended to read as follows:

"(5) 4-YEAR BENEFIT COST RATE.-For purposes of subsection (c) (4) and subparagraph (C) of subsection (c) (3), the four-year benefit cost rate applicable to any State for any taxable year is that percentage obtained by dividing

"(A) One-fourth of the total compensation paid under the State unemployment compensation law during the four-year period ending at the close of the first calendar year preceding such taxable year, by

"(B) The total of the remuneration subject to contributions under the State unemployment compensation law with respect to the first calendar year preceding such taxable year. 'Remuneration' for the purpose of this subparagraph shall include the amount of wages for services covered under the State law irrespective of the limitation of the amount of wages subject to contributions under such State law paid to an individual by an employer during any calendar year beginning with 1966 up to $5,600, and beginning with 1971, up to $6,600; for States for which it is necessary, the Secretary of Labor shall estimate remuneration with respect to the calendar year preceding the taxable year."

ADDITIONAL TERMS AND CONDITIONS

SEC. 211. Section 3304 (a) of the Internal Revenue Code of 1954 is amended by striking out the period at the end of paragraph (6) and inserting in lieu thereof a semicolon, and by adding after paragraph (6) the following new paragraphs:

"(7) compensation may not be denied in such State to any otherwise eligible individual for a period in excess of the week in which the disqualifying act occurred and the succeeding six weeks by reason of a State disqualification except that—

"(A) compensation may be denied in accordance with the fraud disqualifications of the applicable State law but no such disqualification for fraud may exceed a period of 36 months beginning with the discovery of the fraud;

"(B) compensation may be denied for unemployment due to a labor dispute in accordance with the applicable State law; and

"(C) compensation may be denied for a period not to exceed 52 weeks beginning with the date of conviction of a crime arising in connection with his work;

"(8) an individual is required to have had some work whether or not in covered employment, since the beginning of a benefit years as defined in section 3309 (d) (1) in order to qualify for unemployment compensation in his next benefit year;

"(9) compensation shall not be denied to any otherwise eligible individual for any week of unemployment during his benefit year by reason of cancellation or reduction of his wage credits or benefit rights;

"(10) compensation shall not be denied in such State to an otherwise eligible individual for any week because he is in training with the approval of the State agency and such individual shall not be deemed to be not otherwise eligible for any such week by reason of the availability or active search for work requirements of the State law or by reason of his having refused to accept work;

"(11) compensation shall not be denied or reduced in such State to an otherwise eligible individual solely because he files a claim in another State or in Canada or because he resides in another State or in Canada at the time he files a claim for unemployment compensation."

CHANGE IN CERTIFICATION DATE

SEC. 212. (a) Section 3302(a)(1) of the Internal Revenue Code of 1954 is amended by

(1) deleting the phrase "for the taxable year" following the word "certified";

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

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

(1) deleting the phrase "for the taxable year" following the word "certified";

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

(3) deleting the phrase "throughout the taxable year" following the words "required to pay if" and substituting therefor "in such 12-month period". (c) Section 3303(b)(1) of such Code is amended to read as follows:

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

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

(1) deleting the phrase "taxable year" where it first appears and substituting therefor "12-month period ending on October 31";

(2) deleting the phrase "on December 31 of such taxable year" following the words "the Secretary of Labor shall" and substituting therefor "on such October 31";

(3) deleting the words "taxable year" following the phrase "contributions were allowable with respect to such" and substituting therefor "12-month period".

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

(1) deleting the phrase "taxable year" where it first appears and substituting therefor "12-month period ending on October 31";

(2) deleting the phrase "taxable year" where it next appears and substituting therefor "12-month period".

(f) Section 3304 (c) of such Code is amended by

(1) deleting the initial phrase "On December 31 of each taxable year" and substituting therefor "On October 31 of each calendar year";

(2) deleting the phrase "such taxable year" in the first sentence and substituting therefor "the 12-month period ending on such October 31". (g) Section 3304(d) of such Code is amended by deleting the initial phrase "If, at any time during the taxable year," and substituting therefor “If at any time".

TITLE III—MISCELLANEOUS

APPOINTMENT OF SPECIAL ADVISORY COMMISSION

SEC. 301. (a) The Secretary shall three years after the date of enactment of this Act, appoint a Special Advisory Commission on Unemployment Compensation for the purpose of reviewing the Federal-State program of unemployment compensation and making recommendations for improvement of the system, with particular reference to the changes made by this Act, including the financing of

the Federal unemployment adjustment benefits program established by this Act, the graduated increase in the maximum weekly benefit amount provided by section 209 of this Act, the wage and employment qualifying requirements for unemployment compensation under State laws, and making recommendations with respect to the relationship between unemployment compensation and other social insurance programs, and any other matters bearing on the Federal-State unemployment compensation program

(b) The Commission shall be appointed by the Secretary without regard to the civil service laws and shall consist of 12 persons who shall be representatives of employers and employees in equal number, representatives of State and Federal agencies concerned with the administration of the unemployment compensation program, other persons with special knowledge, experience, or qualifications with respect to such a program, and members of the public.

(c) The Commission is authorized to engage such technical assistance as may be required to carry out its functions, and the Secretary shall, in addition, make available to the Commission such secretarial, clerical, and other assistance, and such pertinent data prepared by the Department of Labor as it may require to carry out such functions.

(d) The Commission shall make a report of its findings and recommendations (including recommendations for changes in the provisions of the Social Security Act and the Federal Unemployment Tax Act) to the Secretary, such report to be submitted not later than two years after it commences its review, after which date such Commission shall cease to exist.

(e) Members of the Commission who are not regular full-time employees of the United States shall, while serving on business of the Commission, be entitled to receive compensation at rates fixed by the Secretary, but not exceeding $100 per day, including travel time; and while so serving away from their homes or regular places of business, they may be allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 4 of the Administrative Expenses Act of 1946 (5 U.S.C. 736-2) for persons in government service employed intermittently.

EFFECTIVE DATES

SEC. 302. The amendments made by sections 201, 203 (a), 204, and 205 of this Act shall apply with respect to remuneration paid after December 31, 1936, for services performed after that date. The amendments made by section 203 (b) and (c) and by section 208 shall be effective January 1, 1965. The amendments made by section 211 shall be effective July 1, 1967. The amendments made by section 212 shall be effective January 1, 1966.

[H.R. 9511, 89th Cong., 1st sess., introduced by Mr. Pickle on June 28, 1965]

A BILL To provide for judicial review of administrative findings of the Secretary of Labor under title III of the Social Security Act, as amended, and chapter 23 (Federal Unemployment Tax Act) of the Internal Revenue Code of 1954, as amended, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Employment Security Judicial Review Act of 1965".

SEC. 2. Section 303 of title III of the Social Security Act, as amended, is hereby amended by inserting, after the word "hearing" in subsection (b), the following: ", within the State affected".

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SEC. 3. Title III of the Social Security Act, as amended, is hereby amended by adding at the end thereof a new section 304, as follows:

"SEC. 304. (a) A State may obtain independent judicial review of any adverse finding made under this title by filing in the Court of Appeals of the United States for the circuit wherein such State lies or in the Court of Appeals of the United States for the District of Columbia, within sixty days after the Governor of the State has been notified of the Secretary's finding, a written petition for review. A copy of such petition for review shall forthwith be transmitted by the clerk of the court to the Secretary who shall, within thirty days, file in the court a duly certified copy of the finding complained of and of the entire record upon which the finding was based, including the record of the State court, if any there be. Upon the filing of such petition for review the court shall have jurisdiction to affirm, modify, or set aside such finding in whole or in part and to determine

the matter on its merits on the basis of the entire record, exercising its independent judgment, any provision of the Administrative Procedure Act (60 Stat. 237) to the contrary notwithstanding. No issue shall be considered by the court which was not urged before the Secretary unless there there were reasonable grounds for failure to do so. If application is made to the court for leave to adduce additional evidence, and it is shown to the satisfaction of the court that such additional evidence may materially affect the result of the proceedings, and that there were reasonable grounds for failure to adduce such evidence in the proceedings before the Secretary, the court may remand the case to the Secretary to take further evidence, and the Secretary may thereupon make a new or modified finding. The Secretary shall file in the court a duly certified copy of the record of the further proceedings and of the new or modified finding, if any. The decision of the court shall be final, subject to review by the Supreme Court of the United States upon certiorari or certification, as provided in section 1254 of title 28 of the United States Code. Attorneys appointed by, or under the authority of, the Secretary may appear for and represent the Secretary in any proceedings under this section, but all such representation shall be subject to the direction and control of the Attorney General.

"(b) Administrative grants under this title shall not be withheld or crediting of a State's account under section 903, as amended, be postponed during the sixty-day period within which the State may file a petition for review under this section, nor shall grants be withheld or crediting be postponed because of any issue involved in the review proceedings until ninety days after the completion of such proceedings."

SEC. 4. Section 3303 of the Federal Unemployment Tax Act, as amended (chapter 23 of the Internal Revenue Code of 1954, as amended), is hereby amended by inserting after the word "hearing" in paragraph (3) of subsection (b), the following: "within the State affected".

SEC. 5. Section 3304 of the Federal Unemployment Tax Act, as amended (chapter 23 of the Internal Revenue Code of 1954, as amended), is hereby amended by inserting, after the word "hearing" in subsection (c), the following: "within the State affected".

SEC. 6. Chapter 23 (Federal Unemployment Tax Act) of the Internal Revenue Code of 1954, as amended, is hereby amended by adding at the end thereof a new section 3309, as follows:

"SEC. 3309.

"(a) A State may obtain independent judicial review of any adverse finding made under this chapter by filing in the court of appeals of the United States for the circuit wherein such State lies or in the Court of Appeals of the United States for the District of Columbia, within sixty days after the Governor of the State has been notified of the Secretary's finding, a written petition for review. A copy of such petition for review shall forthwith be transmitted by the clerk of the court to the Secretary who shall, within thirty days, file in the court a duly certified copy of the finding complained of and the entire record upon which the finding was based, including the record of the State court, if any there be. Upon the filing of such petition for review, the court shall have jurisdiction to affirm, modify, or set aside such finding in whole or in part and to determine the matter on its merits and on the basis of the entire record, exercising its independent judgment, any provision of the Administrative Procedure Act (60 Stat. 237) to the contrary notwithstanding. No issue shall be considered by the court which was not urged before the Secretary unless there were reasonable grounds for failure to do so. If application is made to the court for leave to adduce additional evidence, and it is shown to the satisfaction of the court that such additional evidence may materially affect the result of the proceedings, and that there were reasonable grounds for failure to adduce such evidence in the proceedings before the Secretary, the court may remand the case to the Secretary to take further evidence, and the Secretary may thereupon make a new or modified finding. The Secretary shall file in the court a duly certified copy of the record of the further proceedings and of the new or modified finding, if any. The decision of the court shall be final, subject to review by the Supreme Court of the United States upon certiorari or certification, as provided in section 1254 of title 28 of the United States Code. Attorneys appointed by, or under the authority of, the Secretary may appear for and represent the Secretary in any proceedings under this section, but all such representation shall be subject to the direction and control of the Attorney General.

"(b) Tax credit under this chapter shall not be withheld or crediting of a State's account under section 903 of the Social Security Act, as amended, postponed during the sixty-day period within which the State may file a petition for review under this section nor while proceedings under this section are in progress. Neither shall tax credit under this chapter be withheld with respect to the taxable year in which a final judgment decision adverse to the State is rendered nor crediting be postponed if the State, within ninety days after such decision is rendered, takes such action as may be necessary to meet the requirements of this chapter for such tax credit."

[H.R. 7476, 89th Cong., 1st sess., introduced by Mr. Mills on April 14, 1965] [H.R. 7477, introduced by Mr. Byrnes of Wisconsin on April 14, 1965, is identical] A BILL To establish the limits and conditions under which the United States will make grants to the States in assisting in defraying the cost of unemployment_compensation benefits paid by the States, and to that end to increase the rate of the Federal unemployment tax and to establish the recession unemployment compensation account

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Recession Unemployment Compensation Act of 1965".

SEC. 2. (a) Section 3301 of the Internal Revenue Code of 1954 (relating to rate of tax under Federal Unemployment Tax Act) is amended to read as follows:

"SEC. 3301. RATE OF TAX.

"There is hereby imposed on every employer (as defined in section 3306(a)) for the calendar year 1965 and for each calendar year thereafter an excise tax, with respect to having individuals in his employ, equal to 3.2 percent of the total wages (as defined in section 3306(b)) paid by him during the calendar year with respect to employment (as defined in section 3306 (e)) after December 31, 1938."

(b) The amendment made by subsection (a) shall apply only with respect to the calendar year 1965 and calendar years thereafter.

SEC. 3. Title IX of the Social Security Act is amended by adding at the end thereof the following new section:

"RECESSION UNEMPLOYMENT COMPENSATION ACCOUNT

"Establishment of Account

"SEC. 906. (a) There is hereby established in the Unemployment Trust Fund a recession unemployment compensation account. For the purposes provided for in section 904 (e), such account shall be maintained as a separate book account. Any money credited to this account is available for grants to States under section 6 of the Recession Unemployment Compensation Act of 1965.

"Transfers to Account

"(b) The Secretary of the Treasury shall transfer as of the close of each month beginning January 1966, from the employment security administration account to the recession unemployment compensation account established by subsection (a) an amount determined by him to be equal to 20 percent of the amount by which

"(1) transfers to the employment security administration account pursuant to section 901 (b) (2) during such month, exceed

"(2) payments during such month from the employment security administration account pursuant to section 901 (b) (3) and (d).

If, for any such month, the payments referred to in paragraph (2) exceed the transfers referred to in paragraph (1) proper adjustments shall be made in the amount subsequently transferred.

"Authorization of Appropriations

"(c) There are hereby authorized to be appropriated, without fiscal year limitation, such amounts as may be necessary to make grants to the States provided by section 6 of the Recession Unemployment Compensation Act of 1965.