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000 acres destroyed every year-enough a period of benefits. This would bring to feed 150,000 people.

Mr. COOPER. Mr. Chairman, I yield such time as he may desire to the gentleman from New Jersey [Mr. HOWELL).

Mr. HOWELL. Mr. Chairman, unless we adopt the Forand amendment to increase the maximum benefit payments under unemployment compensation, this bill before us today will not mean a thing in New Jersey, except to those Federal employees who lose their jobs after next January. Otherwise, the bill is a zero. It proclaims as its purpose the revising of the unemployment-compensation laws, but it would do so by completely ignoring the unemployed and the problems of the unemployed.

Its effect will be exactly the same as in New Jersey-zero-in Arizona, Arkansas, California, Connecticut, Delaware, the District of Columbia, Alaska, Hawaii, Idaho, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Montana, Nevada, New Hampshire, New Mexico, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Utah, Washington, and Wyoming.

In other words, in half of the States and in the District, Alaska, and Hawaii, it will have absolutely no effect whatsoever. And in other States it will have a very minor effect by bringing in under unemployment compensation employees in businesses employing 4 to 8 workers. I very much favor covering Federal employees under the program, and I also favor covering in workers in small business, but I would be ashamed to vote for such a bill as this under any impression it is a bill to help the unemployed.

What we need, of course, in a situation such as we face today in our industrial centers is a bill like the Forand bill, which more than 80 of us on the Democratic side joined in introducing. This bill was completely ignored by the Ways and Means Committee which voted out instead on strict party lines the inadequate Reed bill now before us.

The Forand bill would have done the following:

First, it would have increased the maximum period of benefits to 39 weeks instead of the present hit-and-miss hit-and-miss programs of the individual States ranging from 16 to 26 weeks.

Second, it would have covered-in the workers of even the smallest businesses employing one or more people.

Third, it would have increased benefits to a maximum of one-half a worker's regular wage up to a top of two-thirds of the average weekly wage in his State. In New Jersey, for instance, this would have meant a top benefit of $50 a week for those normally earning $100 a week or more, and half-pay for every unemployed worker whose normal wage was less than $100. Our present maximum is only $30.

While we are prevented under the rule laid down by the House Rules Committee from submitting the Forand bill as a substitute for this inadequate measure before us, we are permitted to submit two specific amendments, and I shall support both of them.

One would increase the maximum duration of benefits to 26 weeks in those States which do not already have such

other States at least up to the present New Jersey standard.

Why the administration did not propose this itself in the Reed bill, I do not and cannot understand. But it has failed to do so and the Republicans on the Ways and Means Committee refused to agree to it in committee, and so the only way we can get even that modest improvement into the bill is through a Democratic amendment from the floor. The same situation obtains with the second amendment we are to be permitted to make. That one incorporates the benefit provisions of the original Forand bill, establishing a maximum of half-pay up to two-thirds of the average weekly wage in a particular State.

Here again, as in the case of the amendment dealing with the duration of benefits, we on the Democratic side are trying to write into the law a provision President Eisenhower has personally endorsed-but he insists it be left up to the individual States. The formula on benefits laid down in the Forand amendment is exactly the same as the one President Eisenhower's Secretary of Labor recommended to the States for adoption. Not a single State has adopted it, however, and so no good has come of it and no good can come of it unless the Democrats write it into this bill today, as we intend to try to do.

It is indeed a sorry situation, Mr. Chairman, that the only way the President's legislative recommendations appear able to get into law is if the minority party in the Congress seizes the initiative and writes them into law. And it is an even sorrier situation that when we try to do so, we usually have to fight most of the members of the President's own party and his Cabinet advisers as well. In this instance, we even have to fight the President himself in order to try to write into law a provision he supposedly endorses wholeheartedly. Certainly if he recommended that the States adopt the half-pay formula on unemployment compensation, he must believe in it. Then why has he failed to back us up in getting it into the basic Federal law?

The only answer I can surmise to that question is that lets his good intentions be sidetracked by the die-hard reaction so rampant in his own party here in the Congress. Time after time last year and this year he has backed down from his own legislative recommendations when the Republican leadership in the Congress said "boo" and made faces about them.

So in this instance, as in many more which have occurred these past 2 years, we on the Democratic side have found ourselves fighting the President's own party in behalf of things the President himself presumably wants.

If he really wanted them, I believe he would put up more of a fight himself to get them. We can surmise, then, that his support for these measures is lukewarm and casual. But I can't be lukewarm and casual about this situation when we have mass unemployment in New Jersey and a steadily increasing downward trend in our important manufacturing industries. The latest figures

I have received show that while total nonagricultural employment in New Jersey is down only 3.7 percent from a year ago, in manufacturing it is down nearly 10 percent and in durable goods manufactures it is even worse-down 111⁄2 percent. Furniture production employment is down 181⁄2 percent, aircraft employment down 21.7 percent, transportation equipment employment down 15 percent, and so on.

Hardest hit of all is employment in some branches of the apparel industry, with jobs down 28.4 percent from a year ago.

These are startling statistics, Mr. Chairman, and indicative of the vast economic dislocation in my State and in most of the other industrial States of the Nation.

In view of the great unemployment and the sadly inadequate unemployment compensation benefits now available to the jobless, it is vital not only to the unemployed themselves but to our national economy and well-being to provide more decent benefits to these people so that they can buy the necessities of life without going on relief.

It is tragic that the administration would not get behind its own proposals made to the States and help us to draft more adequate Federal unemployment compensation standards. It is a shame that we are considering today not the Forand bill but a meaningless thing with no substance to it.

Let us salvage at least something out of this mess by approving the Forand amendment to increase benefits in a realistic manner-an amendment which would have the effect of lifting unemployment compensation benefits in every State in the Union.

The times are much too serious for

half-hearted half measures which do very little good for an infinitesimal number of unemployed workers, and nothing whatsoever for the great bulk of them.

Mr. COOPER. Mr. Chairman, I yield 5 minutes to the gentleman from Minnesota [Mr. WIER].

Mr. WIER. Mr. Chairman, I wish to take this means to advise the Members

of the House that I too favor and intend to support not only this amendment offered by the gentleman from Rhode Island [Mr. FORAND] but likewise I intend to support a second amendment to be offered by Congressman FORAND to this unemployment compensation bill, recently reported out of the Ways and Means Committee and now before the House for sadly needed improvement, some of which the committee failed to heed and apply to the legislation now before us.

It should hardly be necessary for me to stand here today and express or tell you, after our recent and present threat and experience, that unemployment is not at this time an idle threat that should or could be brushed aside or postponed until tomorrow. It is very positive even today in what can happen to our faltering economy.

Approximately 8.5 percent of the labor force is now out of work. This is a real and present danger. The American Trade Union movement asks that Congress amend the Social Security Act, to

do a better job of taking care of the specifically with amounts and duration unemployed as follows:

First. Benefits: The maximum primary benefits payable under State laws should not be less than two-thirds of the average weekly wage of covered employment within the State. Each individual's primary benefit shall not be less than twothirds of his average weekly earnings.

Second. Duration: Benefits shall be payable to all eligible unemployed persons for a period of not less than 26 weeks.

Third. Disqualifications: The States should be required to limit their disqualifying provisions to those actually designed to prevent payment of benefits to any workers who are not genuinely involuntarily unemployed. The period of disqualification should be limited to such duration as corresponds to the period of time during which the individual's unemployment can properly be considered a result of his disqualifying act. The AFL suggests that 4 weeks represents a realistic period.

Fourth. Coverage should be made coextensive with the coverage of the Federal old-age and survivors' program. In addition, protection should immediately be extended to the employees of the Federal Government.

The act should further be amended to provide means which would permit States to provide for uniform rate reductions to all employers, as well as individual experience-rated reductions.

The basic changes recommended by the AFL were in the bill introduced by Representative Aime J. Forand and some 80 co-sponsors in the House and Senate.

The AFL supports this measure as offering by far the most genuinely constructive approach to the problems of developing an adequate defense against unemployment that has been put before this Congress.

I earnestly urge this committee to approach this serious problem of unemployment in the bold, constructive, and comprehensive manner indicated by H. R. 9430.

Mr. COOPER. Mr. Chairman, I ask unanimous consent that all Members may have permission to revise and extend their remarks on the pending bill. The CHAIRMAN. Is there objection to the request of the gentleman from Tennessee?

There was no objection.

Mr. COOPER. Mr. Chairman, I yield such time as he may desire to the gentleman from California [Mr. SHELLEY].

Mr. SHELLEY. Mr. Chairman, I am wholeheartedly in support of the Forand proposals which should be included in the pending bill. The contention advanced by sponsors of this inadequate bill that to write into it a set of minimum standards as to amount of weekly payments to the unemployed and the duration of those payments would be an invasion of the rights of the States has little or no merit. The Social Security Act as originally passed and as now in force contains a clear recognition of the obligation of the Federal Government to insure compliance by State laws and by the State administrative agencies with certain minimum standards. Although the law does not now deal

of payments, the evidence is clear that present Federal standards must be extended into that field in order to let the unemployment insurance program do the job it was intended to do. The best evidence of the need for such standards is found in the table inserted in the RECORD by the distinguished chairman of the Ways and Means Committee showing how widely the benefits provided vary among the States. Although the laws of my own State, California, are fairly liberal in comparison with the treatment given the unemployed in the more backward States, I cannot sit back and permit this bill to go through without protesting denial of equal rights to the needy jobless in other States-and as we all know, there are far too many of them now.

Since the outset of the Federal Unemployment Insurance Tax Act, it has always been assumed that the purpose was not merely to provide a depository for State funds, as well as money for costs of administration of the State programs, but also to establish certain minimum standards to insure that the employers in the various States would not be able through control of their State legislatures to set up phony unemployment insurance laws-laws designed to give them the full allowable tax credit offset of 2.7 percent with respect to any State taxes that might be imposed under such type of program over and above the 3 percent Federal tax, while providing no real benefits to the unemployed.

At the time of the enactment of the Federal program, and the subsequent enactment of the various State programs, it was obvious that these various programs were founded upon the concept that they were part of a national program, were being created as part of a national program and would continue in existence only so long as the national program itself continued. In fact, many of the States in enacting them specifically provided to this effect, including my own State of California.

It is clear accordingly that at all times since the commencement of this program the underlying concept has been that unemployment is national in scope and transcends State lines and can be effectively reached through a so-called insurance program only if there is an overall Federal program with certain fundamental Federal standards.

Any argument at the present time that moves to improve the Federal standards are invasions of States rights are belated to say the least. That argument was disposed of when the original act was enacted into law and the propriety of that contention was resoundingly rejected at that time. The question accordingly is not the problem of States rights but rather whether the existing standards are adequate to accomplish the objectives of the program and to insure minimum conditions in the various States, consonant with a sound program. In that regard, and as the committee chairman's own table shows, mere reference to the conditions prevailing in the various States as to the amount and duration of benefits will itself suffice to constitute the most persuasive argument.

The benefits are as varied as the number of States, with some States paying as low as $3 and others paying maximums only of $20. It is evident that if such conditions continue unabated the program will soon destroy itself. Merely to bring a few additional employees under coverage as this bill does is not enough. The benefits to our jobless must also be geared to present-day standards rather than those which prevailed in 1935. The States have proven themselves unwilling to shoulder that responsibility. It is up to the Congress to insist that this be done. Past experience proves that employer-controlled State legislatures will not listen to a meek recommendation, either on the part of the Congress or the President. Such lipservice to great liberal principles sounds good in newspaper headlines or in campaign oratory, but as has been proved on issue after issue in this session, unless the administration and its congressional leadership give positive support to definite action these promised dynamic programs remain promises without performance. By supporting the Forand amendments to set a floor on weekly unemployment compensation payments and to require a reasonable minimum period of 39 weeks during which such payments shall continue, this House now has the opportunity to force action on at least one of the glib promises we have heard.

Mr. Chairman, I do not base my position on this problem on hearsay or theory. I take this stand because through my 8 years of experience in the California State Senate, during all of which I served on the Social Welfare Committee which handles this type of legislation, I know what influences are brought to bear on the State legislatures when action on unemployment insurance laws is up for consideration and I know how hard it is for the laboring man who is most affected to be heard. I, therefore, support and ask for the adoption of the amendments proposed by the distinguished gentleman from Rhode Island [Mr. FORAND].

Mr. COOPER. Mr. Chairman, I yield such time as he may desire to the gentleman from Minnesota [Mr. BLATNIK).

Mr. BLATNIK. Mr. Chairman, I wish to express my frank opinion on the bill now under consideration-H. R. 9709to change the Federal-State unemployment insurance system. In my estimation this bill is somewhat of a phoney-on one hand it extends unemployment compensation benefits to possibly as many as 4 million employees not now covered, but on the other hand it does absolutely nothing to increase the now inadequate unemployment compensation benefits to those already covered.

If the majority leaders were really interested in passing a sound unemployment compensation bill, they would have reported out H. R. 9430, a bill introduced by the gentleman from Rhode Island [Mr. FORAND], 85 other Congressmen, including myself, the first week in June.

It is my hope that the House will substitute the language of H. R. 9430 for that of H. R. 9709 and pass the bill as amended. Anyone familiar with the facts of life as they relate to unemployment compensation must recognize that

the provisions of the Forand bill offer logical solutions to repair the basic weaknesses of the present unemployment insurance system. What does the Forand bill propose? I will enumerate. Firstly, the Forand bill would extend the maximum duration of benefit payments under the unemployment insurance system to 39 weeks as against 26 weeks in about half the States today. Secondly, the Forand bill provides that the maximum primary benefit payable under State laws to unemployed workers shall be not less than two-thirds of the State's average weekly wage-this would mean a substantial increase over benefits payable under existing law; and finally, the Forand bill would extend the coverage of unemployed compensation to nearly every employee in America. In short, Mr. Chairman, the Forand bill proposes to extend the period during which unemployment compensation is payable, to substantially increase the amount of benefits payable, and to extend the coverage of the Federal-State unemployment system to virtually every worker in America.

Compared with the Forand bill, the majority bill which we are now debating is a sorry piece of legislation. As I said before, all it does is extend coverage to less than 4 million more workers and does nothing about the period of payments or the amount.

This is a typical piece of Republican legislation. The majority leadership does a great deal of talking about the legislation they are going to pass and have passed, but when we examine the record we find that there has been much noise, but little substance to their legislative program. As I said before, H. R. 9709 is pretty much of a phoney-it is being proposed to give the majority party something to talk about during a campaign year and to fool the people into believing that they are getting something in the way of unemployment compensation when the facts show otherwise.

Mr. Chairman, the purpose of unemployment compensation is twofold. First, it has humanitarian objectives in that it protects those who are unfortunate enough to become unemployed in times of recession, and two, it is a practical economic program of distributing needed purchasing power to offset

recessionmaking trends.

May I suggest to my friends on both sides of the aisle that there is no better time than now to enact a sound unemployment compensation to give a measure of security to every American worker. It is no secret that there are over 3 million workers now completely unemployed and another 11⁄2 million or 2 million partly unemployed. Moreover, responsible economists are today saying that unless the present economic trends are reversed, we may have as many as 5 million fully unemployed by fall and another 3 million partly unemployed.

Since we are faced with this problem of such magnitude, you would think that the Congress would waste no time in adopting the Forand bill, but in its usual stumble, fumble, stumble approach the majority party comes forward with this so-called unemployment compensation

bill which does nothing to repair the basic weaknesses or meet the most pressing needs of the unemployment insurance system. H. R. 9709 does not represent an unemployment compensation program, but is the smokescreen to cover the lack of a program and the failure of the Republican Party in the field of sound legislation.

It is my sincere hope that the House will substitute the Forand bill for H. R. 9709 and thus give the Federal Government an effective weapon against rising unemployment.

However, important though this issue of unemployment compensation may be, at the best it is only a stopgap measure providing on a very short-term basis a bare minimum of income to sustain the unemployed worker and his family. But looming beyond and far above this is the basic problem of the whole overall economic picture, and my good friend and distinguished colleague from Kansas [Mr. MILLER] focused attention to the crux of the whole matter a few minutes ago when he pointed out that the responsibility which is ours lies far beyond merely providing unemployed compensation, the big challenge is what action should we take to provide employment for all willing and able to work. I think it of the utmost importance that before this Congress adjourns it discuss and debate fully the entire economic picture so we and the country will know exactly what predicament we are in. The distinguished gentleman from Baltimore, and my very good personal friend [Mr. GARMATZ], made reference to the story carried in last Sunday's Baltimore Sun, on July 4, about the report made by the National Planning Association-a research and economic survey group composed of prominent and reliable businessmen, labor researchers, and economic statisticians and fiscal experts. The report forewarns of a much more serious unemployment situation for next year with as high as 5 to 6 million expected to with as high as 5 to 6 million expected to be unemployed. Even though the present levels of economic activity maintain, just the normal increase in population and increase in productivity in industry will result in that employment. The economic health of our country is everything, not only for our improved wellbeing at home, but to enable us to carry out our responsibilities of world leadership in this trying time. Yet I must confess, I am deeply disturbed that so little time has been given to a complete and full discussion of our true economic picture-a sort of economic diagnosisto be then followed by a remedial series of steps not only to avoid a serious economic setback, but to further improve our entire economic structure.

Mr. COOPER. Mr. Chairman, I yield such time as he may desire to the gentleman from California [Mr. MILLER).

Mr. MILLER of California. Mr. Chairman, as cosponsor of the Forand bill, H. R. 9430, I shall support the efforts of the gentleman from Rhode Island [Mr. FORAND] to include the provisions of that bill in this one. I believe it will go far to make it a better bill.

Unemployment insurance not only helps the recipient but it also helps the

community merchant. The traditional butcher, baker and, in lieu of the candlestick maker, the public utility company that sells gas and electricity.

Insurance coverage should be extended to cover all employed and selfemployed people.

If it is good for one segment of society, it is good for all.

I am happy that this bill extends coverage, particularly, to those who work for the Federal Government.

Extension and liberalization of this phase of our social-security system is highly desirable at this time when tremors that could forewarn of a catastrophic wave of unemployment are being felt. It will cushion the shock if it

comes.

Mr. COOPER. Mr. Chairman, I yield such time as he may desire to the gentleman from Pennsylvania [Mr. GREEN).

Mr. GREEN. Mr. Chairman, as one of the cosponsors of the Forand amendments I certainly shall support them and hope that they will be included in the pending bill.

When President Eisenhower spoke of bright spots in the economy, he must have been wearing his rose-colored specs. He certainly was not looking at the Philadelphia metropolitan labor area.

That is the area comprising Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties in Pennsylvania, and Burlington, Camden, and Gloucester Counties across the river in New Jersey.

Unemployment in the Philadelphia area has gone up 1101⁄2 percent between March 1953 and March 1954. In March 1953 we had 54,700 jobless. By March 1954 the figure was 115,000.

In Philadelphia County alone, unemployment compensation claims jumped 175 percent between April 1953 and April 1954. The 1953 figure was 19,000 and the 1954 figure was 52,400.

Shipbuilding along the Delaware is at a standstill. In that industry, workers have have exhausted their unemployment compensation benefits, and I am informed that most of them are on relief.

Employment in the nonferrous plants is down 50 percent from 1953 peaks. Federated Metals, a division of American Smelting, is a good example. From its normal force of 125 it is now down to 30, and the prospect is of a complete shutdown by June or July.

Employment in the transportation equipment field is off by 22 percent as a whole. At the Budd plant, where 10,000 were employed 2 years ago, only 4,900 are at work now, and more than 750 Budd workers are on relief. ACFBrill had 1,800 workers 2 years ago, has only 800 now.

In textiles, employment is down by 182 percent. Within the year Delta Finishing Co. closed down, making 600 jobless. Walther shut, with a loss of 250 jobs. The closing of Collins & Aikman meant 2,000 jobs, and at Keystone Worsted 100 lost their jobs. In hosiery the drop has been 35 percent. The closing of Apex Hosiery alone cost 700 people their livelihood. Surpass Leather closing put 700 more out of work, not to mention the layoffs in the Frankford Arsenal as a result of stupid planning by the Defense Department.

The electrical industry has been hard hit. Between May 1953 and May 1954 employment at Electric Storage Battery has dropped from 2,600 to 1,300, and those remaining are working a 35-hour week. At Philadelphia Insulated Wire, the drop has been 41 percent; at International Resistance, plant relocation has brought a drop from 1,400 jobs to 450. At Fhilco the work force of 8,000 has been cut to 6,000, a drop of 25 percent. At Proctor Electric the force of 560 is now down to 290, a drop of 48 percent.

For electrical machinery as a whole employment has dropped 7.7 percent; for machinery other than electrical, the drop has been 4.9 percent.

In chemicals the drop has been 5 percent. So it goes, down the line. Only in three categories-apparel, tobacco, and furniture-is employment any higher than a year ago, and even in these fields, the gain has been negligible.

Obviously, the economy is in trouble. Just as obviously, the Eisenhower administration is doing nothing, when so much needs to be done. The administration could increase personal tax exemptions; it could pass legislation for a higher minimum wage; it could increase social security benefits; it could start plans for building much-needed homes, schools, and hospitals. It could build needed roads and flood-control projects.

benefits.

The States could vote more liberal unemployment compensation And industry could grant the unions' demand for a guaranteed annual wage.

Here are the comparative figures on manufacturing employment for the Philadelphia area, March 1953 and March 1954:

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further requests for time, under the rule the bill is considered as having been read for amendment. No amendments are in order to the bill except amendments offered by direction of the Committee on Ways and Means and either or both of the proposed amendments printed in the CONGRESSIONAL RECORD Of July 7, 1954, page 9980.

The bill is as follows:

Be it enacted, etc., That, effective with respect to services performed after December 31, 1954, section 1607 (a) of the Internal Revenue Code is hereby amended by striking out "eight or more" and inserting in lieu thereof "four or more".

SEC. 2. Effective with respect to rates of contributions for periods after December 31,

1954, section 1602 (a) of the Internal Revenue Code is hereby amended by adding after paragraph (3) the following:

"For any person (or group of persons) who has (or have) not been subject to the State law for a period of time sufficient to compute the reduced rates permitted by paragraphs (1) (2), and (3) of this subsection on a 3-year basis, the period of time required may be reduced to the amount of time the person (or group of persons) has (or have) had experience under or has (or have) been subject to the State law, whichever is appropriate, but in no case less than 1 year immediately preceding the computation date."

SEC. 3. Effective with respect to the taxable year 1955 and succeeding taxable years

(1) section 1605 (c) of the Internal Revenue Code is hereby amended to read as follows:

"(c) Time for payment: The tax shall be paid not later than January 31, next following the close of the taxable year."; and

(2) section 1605 (d) of the Internal Revenue Code is hereby amended by striking out "or any installment thereof" each place it appears.

SEC. 4. (a) The Social Security Act, as amended, is further amended by adding after title XIV thereof the following new title:

"TITLE XV-UNEMPLOYMENT COMPENSATION FOR FEDERAL EMPLOYEES

"DEFINITIONS

"SEC. 1501. When used in this title"(a) The term 'Federal service' means any service performed after 1952 in the employ of the United States or any instrumentality thereof which is wholly owned by the United States, except that the term shall not include service performed

"(1) by an elective officer in the executive or legislative branch of the Government of the United States;

"(2) as a member of the Armed Forces of the United States;

"(3) by foreign service personnel for whom special separation allowances are provided by the Foreign Service Act of 1946 (60 Stat. 999);

"(4) prior to January 1, 1955, for the Bonneville Power Administrator if such service constitutes employment under section 1607 (m) of the Internal Revenue Code;

"(5) outside the United States by an individual who is not a citizen of the United States;

"(6) by any individual as an employee who is excluded by Executive order from the operation of the Civil Service Retirement Act of 1930 because he is paid on a contract or fee basis;

"(7) by any individual as an employee receiving nominal compensation of $12 or less per annum; "(8) in a hospital, home, or other institution of the United States by a patient or inmate thereof;

"(9) by any individual as an employee included under section 2 of the act of August 4, 1947 (relating to certain interns, student nurses, and other student employees of hospitals of the Federal Government; 5 U. S. C., sec. 1052);

“(10) by any individual as an employee serving on a temporary basis in case of fire, storm, earthquake, flood, or other similar emergency;

"(11) by any individual as an employee who is employed under a Federal relief program to relieve him from unemployment; or

"(12) as a member of a State, county, or community committee under the Production and Marketing Administration or of any other board, council, committee, or other similar body, unless such board, council, committee, or other body is composed exclusively of individuals otherwise in the fulltime employ of the United States.

"For the purpose of paragraph (5) of this subsection, the term 'United States' when used in a geographical sense means the States, Alaska, Hawaii, the District of Columbia, Puerto Rico, and the Virgin Islands.

"(b) The term 'Federal wages' means all remuneration for Federal service, including cash allowances and remuneration in any medium other than cash.

"(c) The term 'Federal employee' means an individual who has performed Federal service.

"(d) The term 'compensation' means cash benefits payable to individuals with respect to their unemployment (including any portion thereof payable with respect to dependents).

"(e) The term 'benefit year' means the benefit year as defined in the applicable State unemployment compensation law; except that, if such State law does not define a benefit year, then such term means the period prescribed in the agreement under this title with such State or, in the absence of an agreement, the period prescribed by the Secretary.

"(f) The term 'Secretary' means the Secretary of Labor. "COMPENSATION FOR FEDERAL EMPLOYEES UNDER STATE AGREEMENTS

"SEC. 1502. (a) The Secretary is authorized on behalf of the United States to enter into an agreement with any State, or with the agency administering the unemployment compensation law of such State, under which such State agency (1) will make, as agent of the United States, payments of compensation, on the basis provided in subsection (b) of this section, to Federal employees, and (2) will otherwise cooperate with the Secretary and with other State agencies in making payments of compensation under this title.

"(b) Any such agreement shall provide that compensation will be paid by the State to any Federal employee, with respect to unemployment after December 31, 1954, in the same amount, on the same terms, and subject to the same conditions as the compensation which would be payable to such employee under the unemployment compensation law of the State if the Federal service and Federal wages of such employee assigned to such State under section 1504 had been included as employment and wages under such law.

"(c) Any determination by a State agency with respect to entitlement to compensation pursuant to an agreement 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 such manner and to such extent.

"(d) Each agreement shall provide the terms and conditions upon which the agreement may be amended or terminated. "COMPENSATION FOR FEDERAL EMPLOYEES IN ABSENCE OF STATE AGREEMENT

"SEC. 1503. (a) In the case of a Federal employee whose Federal service and Federal wages are assigned under section 1504 to a State which does not have an agreement under this title with the Secretary, the Secretary, in accordance with regulations prescribed by him, shall, upon the filing by such employee of a claim for compensation under this subsection, make payments of compensation to him with respect to unemployment after December 31, 1954, in the same amounts, on the same terms, and subject to the same conditions as would be paid to him under the unemployment compensation law of such State if such employee's Federal service and Federal wages had been included as employment and wages under such law, except that if such employee, without regard to his Federal service and Federal wages, has employment or wages sufficient to qualify for any compensation during the benefit year under the law of such State, then payments of compensation under this

subsection shall be made only on the basis of his Federal service and Federal wages.

"(b) In the case of a Federal employee whose Federal service and Federal wages are assigned under section 1504 to Puerto Rico or the Virgin Islands, the Secretary, in accordance with regulations prescribed by him, shall, upon the filing by such employee of a claim for compensation under this subsection, make payments of compensation to him with respect to unemployment after December 31, 1954, in the same amounts, on the same terms, and subject to the same conditions as would be paid to him under the unemployment compensation law of the District of Columbia if such employee's Federal service and Federal wages had been included as employment and wages under such law, except that if such employee, without regard to his Federal service and Federal wages, has employment or wages sufficient to qualify for any compensation during the benefit year under such law, then payments of compensation under this subsection shall be made only on the basis of his Federal service and Federal wages.

"(c) Any Federal employee whose claim for compensation under subsection (a) or (b) of this section has been denied shall be entitled to a fair hearing in accordance with regulations prescribed by the Secretary. Any final determination by the Secretary with respect to entitlement to compensation under this section shall be subject to review by the courts in the same manner and to the same extent as is provided in section 205 (g) with respect to final decisions of the Secretary of Health, Education, and Welfare under title II.

"(d) The Secretary may utilize for the purposes of this section the personnel and facilities of the agencies in Puerto Rico and the Virgin Islands cooperating with the United States Employment Service under the act of June 6, 1933 (48 Stat. 113), as amended, and may delegate to officials of such agencies any authority granted to him by this section whenever the Secretary determines such delegation to be necessary in carrying out the purposes of this title. For the purpose of payments made to such agencies under such act, the furnishing of such personnel and facilities shall be deemed to be a part of the administration of the public employment offices of such agencies. "STATE TO WHICH FEDERAL SERVICE AND WAGES ARE ASSIGNABLE

"SEC. 1504. In accordance with regulations prescribed by the Secretary, the Federal service and Federal wages of an employee shall be assigned to the State in which he had his last official station in Federal service prior to the filing of his first claim for compensation for the benefit year, except that

"(1) if, at the time of the filing of such first claim, he resides in another State in which he performed, after the termination of such Federal service, service covered under the unemployment compensation law of such other State, such Federal service and Federal wages shall be assigned to such other State;

"(2) if his last official station in Federal service, prior to the filing of such first claim, was outside the United States, such Federal service and Federal wages shall be assigned to the State where he resides at the time he files such first claim; and

"(3) if such first claim is filed while he is residing in Puerto Rico or the Virgin Islands, such Federal service and Federal wages shall be assigned to Puerto Rico or the Virgin Islands.

"TREATMENT OF ACCRUED ANNUAL LEAVE "SEC. 1505. For the purposes of this title, in the case of a Federal employee who is performing Federal service at the time of his separation from employment by the United States or any instrumentality there

of, (1) the Federal service of such employee shall be considered as continuing during the period, subsequent to such separation, with respect to which he is considered as having received payment of accumulated and current annual or vacation leave pursuant to any Federal law, and (2) subject to regulations of the Secretary concerning allocation over the period, such payment shall constitute Federal wages.

"PAYMENTS TO STATES

"SEC. 1506. (a) Each State shall be entitled to be paid by the United States an amount equal to the additional cost to the State of payments of compensation made under and in accordance with an agreement under this title which would not have been incurred by the State but for the agreement.

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

"(c) The Secretary shall from time to time certify to the Secretary of the Treasury for payment to each State sums payable to such State under this section. The Secretary of the Treasury, prior to audit or settlement by the General Accounting Office, shall make payment to the State in accordance with such certification, from the funds for carrying out the purposes of this title.

"(d) All money paid a State under this title shall be used solely for the purposes for which it is paid; and any money 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.

"(e) 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.

"(f) 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 compensation certified by him under this title.

"(g) No disbursing officer shall, in the ab sence 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 (f) of this section.

"(h) For the purpose of payments made to a State under title III, 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 the State unemployment-compensation law.

"INFORMATION

"SEC. 1507. (a) All Federal departments, agencies, and wholly owned instrumentalities of the United States are directed to make available to State agencies which have agreements under this title or to the Secretary, as the case may be, such information with

i

respect to the Federal service and Federal wages of any Federal employee as the Secretary may find practicable and necessary for the determination of such employee's entitlement to compensation under this title. Such information shall include the findings of the employing agency with respect to"(1) whether the employee has performed Federal service,

"(2) the periods of such service,

"(3) the amount of remuneration for such service, and

"(4) the reasons for termination of such service.

The employing agency shall make the findings in such form and manner as the Secretary shall by regulations prescribe (which regulations shall include provision for correction by the employing agency of errors or omissions). Any such findings which have been made in accordance with such regulations shall be final and conclusive for the purposes of sections 1502 (c) and 1503 (c).

"(b) The agency administering the unemployment compensation law of any State shall furnish to the Secretary such information as the Secretary may find necessary or appropriate in carrying out the provisions of this title, and such information shall be deemed reports required by the Secretary for the purposes of paragraph (6) of subsection (a) of section 303.

"PENALTIES

"SEC. 1508. (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 authorized to be paid under this title or under an agreement thereunder shall be fined not more than $1,000 or imprisoned for not more than 1 year, or both.

"(b) (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 has received any amount as compensation 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 compensation payable to such person under this title during the 2-year period following the date of the finding. Any such finding by a State agency or the Secretary, as the case may be, may be made only after an opportunity for a fair hearing, subject to such further review as may be appropriate under sections 1502 (c) and 1503 (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.

"REGULATIONS

"SEC. 1509. 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.

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