Employment and Training Administration
Washington, D. C. 20210






October 26, 1981




October 31, 1982











Office of Workforce Security




Amendments Made by P.L. 97-35 (Omnibus Budget Reconciliation Act of 1981) and P.L. 97-34 (Economic Recovery Tax Act of 1981), Which Affect the Unemployment Compensation Program

l. Purpose.  To advise State agencies of the amendments made by the subject Acts to the Federal-State Extended Unemployment Compensation Act of 1970 (EUCA); Titles III and XII of the Social Security Act; Chapter 85, Title 5, United States Code; Sections 3302, 3304(c), and 3306(c) of the Federal Unemployment Tax Act (FUTA) and Sections 233 and 236 of the Trade Act of 1974.

2. References.  Sections 2335, 2401 through 2408, 2505 and 2506 of P.L. 97-35 and Section 822 of P.L. 97-34.

3. Background.  The amendments made by P.L. 97-35 and P.L. 97-34 have made several significant changes affecting the unemployment compensation program, many of which will require changes in State laws.  Sections 2401 through 2408 of P.L. 97-35, respectively, provide for:

Section 2335 of P.L. 97-35 contains a requirement that unemployment insurance agencies deduct and withhold amounts owed by a claimant for child support obligations and forward same to State or local child support enforcement agencies.

Section 2505 of P.L. 97-35 requires the reduction of EB entitlement at the time the individual's benefit year ends by the amount of prior TRA payments made to the individual during the benefit year to assure a combined UI-EB total of no more than 52 weeks.  Section 2506 of P.L. 97-35 prohibits denial of UI or TRA for any week an individual is in training approved under amended Section 236(a)(1) of the Trade Act of 1974.

Further, Section 822 of P.L. 97-34, the Economic Recovery Tax Act of 1981, excludes from FUTA coverage, for calendar year 1981 only, certain fishing boat services, if the remuneration for those services is a share of the boat's catch or the proceeds of the catch, and if the crew of such boat is normally made up of fewer than ten individuals.

Explanations and interpretations of each of these amendments are discussed in Attachment I to this UIPL on a section by section basis corresponding to the section numbers in P.L. 97-35 and 34.  The suggested draft language for changes in State laws to implement the needed changes is provided in Attachment II.  The text of the language in the Federal law for the provisions on limitations on tax credit reductions, and the amendments to Section 1202 SSA, providing for interest on loans to State unemployment funds, have been included in Attachment III in order to provide a ready reference to the law in those provisions.

Several provisions in the amendments made by P.L. 97-35, allow States additional time beyond the specified effective dates to make the necessary amendments to their law to meet the Federal law requirements.  A grace period is allowed if (1) the legislature "does not meet in a session" which begins in a period after August 13, 1981 and prior to a later prescribed date, or (2) if "in session" on August 13, 1981, does not "remain in session for a period of at least 25 calendar days" (i.e., until September 7, 1981).  Under the first part the legislative session must begin within the prescribed dates and the legislature must actually meet in a session which begins within those dates.  As to the second part all that is required is that the legislature be in session, and it is irrelevant whether within that 25 days the legislature meets or is in recess.  For both parts a "session" includes any regular, special, budget, or other session of a State legislature.

  • Action Required. SESAs are requested to take the necessary action to assure consistency with Federal requirements, as amended by P.L. 97-35.  The effective dates for implementation of the new Federal requirements are set forth in Attachment I.

  • Inquiries. Inquiries should be directed to your regional offices.

  • Attachments: 

    1. Explanation and Interpretation of Amendments

    2. Suggested Draft Language

    3. Text of (1) Provisions on Limitation on Tax Credit Reductions, and (2) amended Section 1202 SSA Interest on Loans to State unemployment funds