DIRECTIVE	:	UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 50-86
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	DONALD J. KULICK Administrator for Regional Management
SUBJECT	:	Amendments Made by Public Law 99-272, the Consolidated Omnibus Budget Reconciliation Act of 1985, Which Affect the Federal-State Unemployment Compensation Program

1. Purpose. To advise State agencies of the amendments made by Public Law (P.L.) 99-272 to Section 303 of the Social Security Act (SSA), Sections 3304 and 3306 of the Federal Unemployment Tax Act (FUTA), and the Federal Supplemental Compensation Act of 1982 (FSC).

2. References Sections 12401, 12402, and 13303 of P.L. 99-272.

3. Background The President signed into law on April 7, 1986, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), P.L. 99-272.  The amendments made by P.L. 99-272 have made several significant changes affecting the unemployment compensation (UC) program which may require changes in State law and will require new agreements with the U.S. Secretary of Labor.

   Section 12401 amends Section 303(a)(5), SSA, and Sections 3304(a)(4) and 3306(f), FUTA, to permit recovery of overpayments made under State and Federal UC laws through offset from unemployment benefits payable to an individual under another State's UC law or a Federal UC program in accordance with a new subsection (g) to Section 303, SSA, which provides that:

   (1)  a State may deduct overpayments from benefits payable under a UC program of the United States (U.S.) or another State, with the same procedural safeguards for notice and opportunity for a hearing as apply to the deduction of overpayments of UC paid by the State; and

   (2)  any State may enter into an agreement with the Secretary of Labor where the State agrees to recover overpayments made under a UC program of the U.S. from benefits payable under the State's UC program, and the U.S. agrees to allow the State to recover overpayments made under a State UC program from benefits payable under a UC program of the U.S.  The reciprocal nature of these parallel provisions is the essence of any such agreement.

   These amendments may apply to recoveries made on or after the date of enactment, April 7, 1986, and may apply to overpayments made before, on, or after the date of enactment.

   Section 12402 amends FSC by waiving the consecutive weeks requirement for certain individuals to collect the remaining benefits in their FSC accounts under P.L. 99-15, if these individuals were called up for National Guard duty by the Governor in a disaster declared by the President on June 3, 1985. This provision applies only to Pennsylvania and Ohio.

   Sections 13001 through 13009 reauthorize the Trade Adjustment Assistance (TAA) Program for workers effective December 18, 1985, and extend the program to September 30, 1991.  These sections also make substantial changes to the TAA Program.  A separate directive (GAL 7-86) discusses these changes.

   Section 13303 amends the FUTA definition of "employment" for three groups of workers.  This section:

   (a)  Extends for two years, until December 31, 1987, the exemption from "employment" under Section 3306(c)(1)(B), FUTA, of agricultural labor performed by certain nonresident farmworkers admitted to work temporarily under specific provisions of the Immigration and Nationality Act.

   (b)  Permanently exempts from "employment" under Section 3306(c)(20), FUTA, remuneration paid after September 19, 1985 for services performed by certain full-time students employed by certain summer camps.  Notice that this exemption was not applicable from January 1, 1984 to September 19, 1985.

   (c)  Permanently extends the exclusion from "employment" under Section 3306(c)(18), FUTA, remuneration paid after December 31, 1980, for services performed by crews of certain fishing boats.

4. Action Required SESAs are requested to notify appropriate staff of these amendments.

5. Inquiries Inquiries should be directed to your regional office.

6. Attachments Text, explanation and interpretation of UC amendments; and draft language to implement the provisions of new Section 303(g), SSA.