gate amount of Federal benefits payable during such benefit period and notice of his rights of appeal. For a worker who is determined to be not eligible, the notice shall include the reason for and the qualifying period covered by such determination, and notice of his rights of appeal. If he is determined to be ineligible by reason of his failure to meet the requirements of section 2002 (c), the notice shall include, as appropriate, a statement of his weeks of employment and the employers for whom he worked or his wages for insured work by each employer, or both, during such qualifying period.

FEDERAL UNEMPLOYMENT ADJUSTMENT BENEFITS IN ABSENCE OF STATE

AGREEMENT

"In General

"SEC. 2008. (a) If an individual files a claim for Federal unemployment adjustment benefits in a State with which there is no agreement under section 2007 which applies to the weeks of unemployment concerned, or in the Virgin Islands or in Canada, the Secretary, in accordance with regulations prescribed by him, shall make payments to the individual from the Federal adjustment account in accordance with the provisions of this title.

"Utilization of Other Agencies

"(b) For the purpose of providing Federal unemployment adjustment benefits to individuals in a State described in subsection (a), the Secretary may utilize the personnel and facilities of such (Federal) and State agencies as may be appropriate, and for the purposes of providing Federal unemployment adjustment benefits to individuals in the Virgin Islands, the Secretary may utilize the personnel and facilities of the agency in the Virgin Islands cooperating with the U.S. Employment Service under the Act of June 6, 1933 (29 U.S.C. 49 et seq.), or in the case of Canada, the agency administering the Canadian Unemployment Insurance Act. Except in the case of Canada, the Secretary may delegate to the agencies described in this subsection any authority granted to him by this title whenever he determines such delegation to be necessary in carrying out the purpose of this title.

"Review

"(c) (1) Any individual referred to in subsection (a) whose claim for Federal unemployment adjusted benefits has been denied shall be entitled to a fair hearing and review as provided in section 1053 (c).

"(2) Written notice of any determination by any agency with respect to entitlement to Federal unemployment adjustment benefits shall be furnished promptly to each claimant and such notice shall include a statement as to whether the claimant is eligible for Federal unemployment adjustment benefits, and the determination as to his Federal benefit period, his weekly benefit amount, and the maximum aggregate amount of Federal benefits payable to him during such benefit period and notice of his rights of appeal. For a worker who is determined to be not eligible, the notice shall include the reason for and the qualifying period covered by such determination, and notice of his rights of appeal. If he is determined to be ineligible by reason of his failure to meet the requirements of section 2002 (c), the notice shall include, as a appropriate, a statement of his weeks of employment and the employers for whom he worked or his wages for insured work by each employer, or both, during such qualifying period.

"PENALTIES

"False Statements, and So Forth

"SEC. 2009. (a) Whoever makes a false statement or representation of a material fact knowing it to be false or knowingly fails to disclose a material fact to obtain or increase for himself or for any other individual any payment under this title shall be fined not more than $1,000 or imprisoned for not more than one year, or both.

"(b) Any employer, or officer or agent of any employer, who directly or indirectly makes or requires or accepts any deduction from wages to finance the contributions required by him, or requires or accepts any waiver of any right hereunder by any individual in his employ, or discriminates in regard to the hiring

or tenure of work or any term or condition of work of any individual on account of his claiming benefits under this title, or in any manner obstructs or impedes the claiming of benefits shall be fined not more than $1,000 or imprisoned for not more than one year, or both.

"(c) Nothing in this section shall be construed to impair or diminish the authority of any State to enact or enforce any law with respect to false statements or misrepresentations or nondisclosure of material facts made to a representative of the State to obtain or increase payments to any individual under this or any State or Federal unemployment compensation law.

"RECOVERY OF OVERPAYMENTS

"SEC. 2010. (a) (1) If a State agency or the Secretary, as the case may be, or a court of competent jurisdiction finds that any person—

"(A) has made, or has caused to be made by another, a false statement or representation of a material fact knowing it to be false, or has knowingly failed, or caused another to fail, to disclose a material fact, and

"(B) as a result of such action hs received any payment under this title to which he was not entitled, such person shall be liable to repay such amount to the State agency or the Secretary, as the case may be, in lieu of requiring the repayment of any amount under this paragraph, the State agency or the Secretary, as the case may be, may recover such amount by deductions from any benefits payable to such person under this title. Any person affected by any such finding by a State agency or the Secretary, as the case may be, must be given an opportunity for a fair hearing, subject to such further review as may be appropriate under section 2008 (c).

"(2) Any amount repaid to a State agency under paragraph (1) shall be deposited into the fund from which payment was made. Any amount repaid to the Secretary under paragraph (1) shall be returned to the Treasury and credited to the current applicable appropriation, fund, or account from which payment was made.

"(b) (1) If a State agency or the Secretary finds that any person has received payment under this title for a period in which he was entitled to receive compensation under any State law or title XV, or has received payment under State law or title XV for a period in which he was entitled to Federal unemployment adjustment benefits the State agency shall make appropriate adjustments in the Federal adjustment account and the State fund or account: Provided, That in any case where the amount of Federal unemployment adjustment benefits paid an individual exceeds the amount such individual would have received under State law or title XV, the Secretary may, in the absence of gross negligence or intent to defraud the United States, waive the repayment by the individual of the amount of such excess benefit payment.

"(2) The State agency shall, in cases arising under subsection (b) (1), make appropriate adjustments in the individual's entitlement to benefits under State law or title XV and this title.

"INFORMATION

"SEC. 2011. The State agency shall furnish to the Secretary such information as he may find necessary or appropriate in carrying out the provisions of this title.

"PAYMENTS TO STATES

"SEC. 2012. (a) There shall be paid to each State which has an agreement under this title, either in advance or by way of reimbursement, as may be determined by the Secretary, such sum as the Secretary estimates the State will be entitled to receive under this title for each calendar month, reduced or increased, as the case may be, by any sum by which the Secretary finds that his estimates for any prior calendar months were greater or less than the amounts which should have been paid to the State. Such estimates may be made upon the basis of such statistical, sampling, or other method as may be agreed upon by the Secretary and the State agency.

"Certification

"(b) The Secretary shall from time to time certify to the Secretary of Treasury for payment to each State which has an agreement under this title sums payable to such State under subsection (a). The Secretary of the Treasury,

prior to audit or settlement by the General Accounting Office, shall make payment to the State, in accordance with such certification, from the Federal adjustment account.

"Money To Be Used Only for Purposes for Which Paid

"(c) All money paid a State under this title shall be used solely for the purposes for which it is paid; and any amount so paid which is not used for such purposes shall be returned, at the time specified in the agreement under this title, to the Treasury and credited to current applicable appropriations, funds, or accounts from which payments to States under this title may be made.

"Surety Bonds

"(d) An agreement under this title may require any officer or employee of the State certifying payments or disbursing funds pursuant to the agreement or otherwise participating in its performance, to give a surety bond to the United States in such amount as the Secretary may deem necessary, and may provide for the payment of the cost of such bond from funds for carrying out the purposes of this title.

"Liability of Certifying Officers

"(e) No person designated by the Secretary or designated pursuant to an agreement under this title as a certifying officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to the payment of any Federal unemployment adjustment benefits certified by him under this title.

"Liability of Disbursing Officers

"(f) No disbursing officer shall, in the absence of gross negligence or intent to defraud the United States, be liable with respect to any payment by him under this title if it was based upon a voucher signed by a certifying officer designated as provided in subsection (e) of this section.

"Costs of Administration

"(g) For the purpose of payments made to a State under title III of the Social Security Act (but not for the purpose of the limitation specified in section 901 (c) of such Act) administration by the State agency of such State pursuant to an agreement under this title shall be deemed to be a part of the administration of State law.

"REGULATIONS

"SEC. 2013. The Secretary is hereby authorized to make such rules and regulations as may be necessary to carry out the provisions of this title. The Secretary shall insofar as practicable consult with representatives of the State unemployment compensation agencies before prescribing any rules or regulations which may affect the performance by such agencies of functions pursuant to agreements under this title.

"DEFINITIONS

"SEC. 2014. For purposes of this title

"(1) 'Federal unemployment adjustment benefit' means the cash benefit payable under this title.

"(2) 'Benefit year' means the benefit year as defined in the applicable State law, except that if an individual is prevented from establishing a benefit year by a disqualification under State law the term 'benefit year' shall mean the benefit year that would have been established if a disqualification had not been imposed.

"(3) 'Base period' means the base period as determined under applicable State law for the benefit year.

"(4) 'Federal benefit period' means the three-year period beginning with the first day of an individual's benefit year, except that no Federal benefit period shall be established for an individual until he has filed a first claim, nor shall a Federal benefit period be established beginning with a benefit year which started before the end of a previously established Federal benefit period.

"(5) Covered employment' means employment covered under any State law and Federal service as defined in title XV.

"(6) 'First claim' means the first claim for determination of an individual's right to Federal unemployment adjustment benefits with respect to a Federal benefit period if it is determined that he has been employed in covered employment to the extent specified in section 2002 (c), whether or not any Federal unemployment adjustment benefit is paid.

“(7) ‘High-quarter wages' means the wages paid in the calendar quarter of an individual's base period in which his total wages were highest.

"(8) 'Weekly benefit amount' means the amount of compensation, including dependent's allowances, payable for a week of total unemployment under the applicable State law or title XV with respect to an individual's benefit year with which his Federal benefit period began but if more than one weekly rate was payable in such benefit year, then the last weekly rate payable for a week of total unemployment under such law.

"(9) 'Secretary' means the Secretary of Labor of the United States. "(10) 'State' includes the District of Columbia and the Commonwealth of Puerto Rico.

"(11) 'State agency' means the agency of the State that administers its State unemployment compensation law.

"(12) 'Applicable State law' means the unemployment compensation law of the State, approved by the Secretary under section 3304 of the Federal Unemployment Tax Act, under which at the time of an individual's first claim

"(A) he has a current benefit year; or

"(B) if he has no current benefit year, he had his most recent benefit year within the Federal benefit period.

"(13) Title XV' means title XV of the Social Security Act.

"(14) 'Week of employment' means a week of employment as defined in the applicable State laws.

"(15) 'Week of unemployment' means a week

"(A) for which an individual received compensation under State law or title XV; or

"(B) in which an otherwise eligible individual performed no work and received no wages (or if an individual received some wages, a week shall be as defined in the applicable State law), except that for an otherwise eligible individual who did not receive unemployment compensation under State law or title XV by reason of a State disqualification (other than a disqualification for fraud, for unemployment due to a labor dispute or for conviction of a crime arising out of his work) a week of unemployment shall not include a week of disqualification beginning earlier than the seventh week following the week in which the disqualifying act occurred. With respect to a disqualification for fraud for unemployment due to a labor dispute or for conviction of a crime arising out of his work, no week of disqualification shall be a week of unemployment.

"(16) 'Federal qualifying period' means for an individual his base period and the immediately preceding 104 weeks or 8 quarters, as appropriate under the applicable State law."

SEC. 102. The Social Security Act is amended by adding after title XX thereof (added by section 101 of this Act), the following new title:

"TITLE XXI-MATCHING GRANTS FOR EXCESS COSTS

"QUALIFICATIONS AND CONDITIONS

"SEC. 2101. Matching grants shall be made to a State with respect to any calendar year after 1965 as provided in this section if—

"(a) the State law has been certified on October 31 of such calendar year by the Secretary under section 3304 (c) of the Internal Revenue Code of 1954; and

"(b) after 1966, the State law has been certified on October 31 of such calendar year by the Secretary under section 3309 (a) of the Internal Revenue Code of 1954: and

"(c) the head of the State agency (or the Governor of the State) applies therefor prior to June 1 of the year following the calendar year for which the grant is requested, and the Secretary determines that the cost of unem

ployment compensation paid under the State law during the calendar year for which the grant is requested, excluding any amount that is reimbursable by the Federal Government, exceeded 2 per centum of total wages in covered employment for such calendar year as reported to the State agency before May 1 of the following year.

"AMOUNT OF GRANTS

"SEC. 2102. The matching grant to a State with respect to a calendar year shall equal two-thirds of the amount by which the unemployment compensation paid in the State in the calendar year, excluding any amount that is reimbursable by the Federal Government, exceeded 2 per centum of total wages in covered employment in such calendar year. The amount of such grant shall be rounded to the nearest dollar.

"CERTIFICATION

"SEC. 2103. (a) The Secretary shall certify to the Secretary of the Treasury, no later than the June 30 following the calendar year with respect to which the matching grant is to be made, the amount determined under section 2102. The Secretary of the Treasury shall, prior to audit or settlement by the General Accounting Office, transfer from the Federal adjustment account to the account of the State in the Unemployment Trust Fund the amount certified under this subsection by the Secretary.

"(b) Amounts transferred to the account of a State pursuant to subsection (a) shall be used only for the payment of compensation to individuals with respect to their unemployment, exclusive of expenses of administration."

SEC. 103. Title IX of the Social Security Act is amended by

(a) inserting a comma and the numeral "VII" after the numeral "III" in section 901 (c) (1) (B) (i) ;

(b) adding the words "or section 3309" after the words "under section 3304" in section 903 (b) (1) (B); and,

(c) adding the following new sections at the end of the title :

"FEDERAL ADJUSTMENT ACCOUNT

"Establishment of Account

"SEC. 906. (a) There is hereby established in the Unemployment Trust Fund a Federal adjustment account. For the purposes provided for in section 904 (e), such account shall be maintained as a separate book account. Any moneys to the credit ofthe Federal adjustment account are hereby made available for the payment of Federal unemployment adjustment benefits provided by title XX, the payments to States provided by section 2005 (d) and the matching grants authorized by title XXI. There are hereby authorized to be appropriated, without fiscal year limitations, such amounts are necessary (as repayable advances) for the payment of Federal unemployment adjustment benefits provided by title XX, the payments to States provided by section 2005 (d) and the matching grants authorized by title XXI. The amounts so appropriated shall be transferred from time to time to the Federal adjustment account on the basis of estimates by the Secretary of the Treasury, after consultation with the Secretary of Labor, of the amounts required to make such payments. Amounts transferred as repayable advances shall be repaid, without interest, by transfers from the Federal adjustment account to the general fund of the Treasury, at such times as the amount in the Federal adjustment account is determined by the Secretary of the Treasury, in consultation with the Secretary of Labor, to be adequate for such

purpose.

"Transfer From Employment Security Administration Account

“(b)(1) Beginning on January 1, 1968, the Secretary of the Treasury shall transfer as of the close of each month from the employment security administration account to the Federal adjustment account an amount determined by him to equal three-elevenths (except that when the Federal unemployment rate has been reduced in accordance with section 3301 (b) of the Internal Revenue Code of 1954 the portion shall be one-fifth) of the amount by which

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