Order Code RL33362
Unemployment Insurance:
Available Unemployment Benefits
and Legislative Activity
Updated December 20, 2007
Julie M. Whittaker
Specialist in Income Security
Domestic Social Policy Division

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Unemployment Insurance: Available Unemployment
Benefits and Legislative Activity
Summary
A variety of benefits may be available to unemployed workers to provide them
with income support during a spell of unemployment. When eligible workers lose
their jobs, the Unemployment Compensation (UC) program may provide income
support through the payment of UC benefits. Certain groups of workers who lose
their jobs on account of international competition may qualify for additional or
supplemental income support through Trade Adjustment Act (TAA) programs.
UC benefits may be extended at the state level by the Extended Benefit (EB)
program if certain economic situations within the state exist. As of this writing, the
EB program is not currently triggered “on” in any state.
During some economic recessions, Congress has created a federal Temporary
Extended Unemployment Compensation (TEUC) program. These programs
generally have extend UC benefits for an additional 13 weeks and have an expiration
date. As of this writing, no TEUC program exists and these benefits are not
available.
If an unemployed worker is not eligible to receive UC benefits and the worker’s
unemployment may be directly attributed to a declared major disaster, a worker may
be eligible to receive Disaster Unemployment Assistance (DUA) benefits. The
disaster declaration will include information on whether DUA benefits are available.
On December 19, 2008, the President signed P.L. 110-140. Among many other
items, P.L. 110-140 includes a one-year extension of 0.2% Federal Unemployment
Tax Act (FUTA) surtax. At the end of CY2008, the effective FUTA tax on
employers for each employee will decrease to 0.6% (down from 0.8%) on the first
$7,000 of wages. State Unemployment Tax Acts (SUTA) taxes are not directly
affected by the expiring provision. Bills that currently propose to extend the surtax
include S. 1871, H.R. 2233, and H.R. 3920.
The 110th Congress is also considering the expiring authorization of the TAA
and ATAA programs. The Trade Adjustment Assistance Reform Act of 2002 (P.L.
107-210) reauthorized the TAA and ATAA programs through FY2007. P.L. 110-89
extended authorization through CY2007. Bills that currently propose to extend
authorization and expand the TAA program include S. 122, S. 1848, H.R. 910, H.R.
3801, H.R. 3920, and H.R. 3943.
The House of Representatives passed H.R. 3920 on October 31, 2007.
The House and Senate are currently resolving differences in H.R. 6 through an
amendment exchange. On December 6, 2007, the House added an amendment to the
Senate amendments that would extend the FUTA surtax through December 31, 2008.

This report will be updated as legislative events warrant.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Unemployment Compensation (UC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Appropriation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
UC Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
States Set Most of the Eligibility Rules . . . . . . . . . . . . . . . . . . . . . . . . . 3
UC Benefit Determination and Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
UC Benefit Financing: Unemployment Taxes on Employers . . . . . . . . . . . . 5
Outstanding Loans from the Federal Unemployment Account (FUA) . 8
Trade Adjustment Assistance (TAA): Unemployment Benefit Extensions
for Workers Unemployed on Account of International Trade . . . . . . . . . . . . 9
Expiring Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
TAA Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
TAA Benefits and Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Other Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
TAA Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Extended Benefit (EB) Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
EB Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
EB Benefits and Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
EB Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Temporary Extended Unemployment Compensation (TEUC) Program
(Currently Expired) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Federal Temporary Extended Unemployment Compensation
Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
TEUC Benefits and Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
TEUC Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Disaster Unemployment Assistance (DUA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
DUA Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
DUA Benefit Determination and Duration . . . . . . . . . . . . . . . . . . . . . . . . . 14
DUA Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Legislative Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
110th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Expiring FUTA Surtax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Expiring TAA Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Other Proposed Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

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List of Tables
Table 1. State Unemployment CompensationBenefits Amounts, January 2007 . 4
Table 2. State Unemployment Taxes: Taxable Wage Base and Rates,
January 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table 3. Revenue and Spending Associated With Unemployment
Compensation, FY2000-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

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Unemployment Insurance:
Available Unemployment Benefits
and Legislative Activity
Introduction
A variety of benefits may be available to unemployed workers to provide them
with income support during a spell of unemployment. The cornerstone of this
income support is the joint federal-state Unemployment Compensation (UC)
program, which may provide income support through the payment of UC benefits.
Other programs that may provide workers with income support are more specialized.
They may target special groups of workers, be automatically triggered by certain
economic conditions, be temporarily created by Congress with a set expiration date,
or target typically ineligible workers through a disaster declaration.
Certain groups of workers who lose their jobs because of international
competition may qualify for additional or supplemental income support through
Trade Adjustment Act (TAA) programs or (for certain workers 50 years old and
older) the Alternative Trade Adjustment Act (ATAA) program.
UC benefits may be extended at the state level by the Extended Benefit (EB)
program if certain economic situations within the state exist. As of this writing, no
EB program is triggered “on” in any state. During some economic recessions, the
federal government has created a federal Temporary Extended Unemployment
Compensation (TEUC) program. These programs generally extend UC benefits for
an additional 13 weeks and have an expiration date. As of this writing, no TEUC
program exists and these benefits are not available.
If an unemployed worker is not eligible to receive UC benefits and the worker’s
unemployment may be directly attributed to a declared major disaster, a worker may
be eligible to receive Disaster Unemployment Assistance (DUA) benefits. The
disaster declaration will include information on whether DUA benefits are available.
This report describes these five kinds of unemployment benefits — regular UC,
TAA, EB, TEUC, and DUA. The report explains their basic eligibility requirements,
benefits, and financing structure.

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CRS-2
Unemployment Compensation (UC)
UC is a joint federal-state program financed by federal taxes under the Federal
Unemployment Tax Act (FUTA) and by state payroll taxes under the State
Unemployment Tax Acts (SUTA). The UC program has a direct impact on almost
every business in the United States as most businesses are subject to state and federal
unemployment taxes. Approximately $7 billion in federal unemployment taxes and
$37.5 billion in state unemployment taxes were collected in FY2006. In FY2007, the
federal appropriation for the UC program is $2.5 billion. In FY2007, states spent an
estimated $34.8 billion on UC benefits. Approximately 130.6 million jobs are
covered by the UC program. In March 2007, 2.6 million unemployed workers
received UC benefits in a given week and the average weekly UC benefit amount was
$281.
The UC program helps counter economic fluctuations. When the economy
grows, UC program revenue rises through increased tax revenues while UC program
spending falls as fewer workers are unemployed. The effect of collecting more taxes
than are spent dampens demand in the economy. This also creates a surplus of funds
or a “cushion” of available funds for the UC program to draw upon during a
recession. In a recession, UC tax revenue falls and UC program spending rises as
more workers lose their jobs and receive UC benefits. The increased amount of UC
payments to unemployed workers puts additional funds into the economy and
dampens the effect of earnings losses.
Authorization. The underlying framework of the UC system is contained in
the Social Security Act (the act). Title III of the act authorizes grants to states for the
administration of state UC laws, Title IX authorizes the various components of the
federal Unemployment Trust Fund (UTF), and Title XII authorizes advances or loans
to insolvent state UC programs.
Appropriation. The federal government appropriates funds for federal and
state UC program administration, the federal share of EB payments, and federal loans
to insolvent state UC programs. In FY2007, the appropriation is $2.5 billion.
Administration. The U.S. Department of Labor (DOL) administers the
federal portion of the UC system, which operates in each state, the District of
Columbia, Puerto Rico, and the Virgin Islands. Federal law sets broad rules that the
53 state programs must follow. These include the broad categories of workers that
must be covered by the program, the method for triggering the EB program, the
minimum upper state unemployment tax rate to be imposed on employers (5.4%),
and how the states will repay UTF loans. If the states do not follow these rules, their
employers may lose a portion of their state unemployment tax credit when their
federal unemployment tax is calculated. The federal tax pays for both federal and
state administrative costs, the federal share of the EB program, loans to insolvent
state UC accounts, and state employment services.
The UC system helps counter economic fluctuations. When the economy
grows, UC program revenue rises and program spending falls, thereby slowing

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CRS-3
economic growth. In a recession, program revenue falls and program spending rises,
stimulating the economy.
UC Eligibility
States Set Most of the Eligibility Rules. The UC system pays benefits to
covered workers who become involuntarily unemployed for economic reasons and
meet state-established eligibility rules. The UC system generally does not provide
UC benefits to the self-employed, to those who are unable to work, or to those who
do not have a recent earnings history.
States usually disqualify claimants who lost their jobs because of inability to
work or unavailability for work, who voluntarily quit without good cause, who were
discharged for job-related misconduct, who refused suitable work without good
cause, or a labor dispute. To receive UC benefits, claimants must have enough recent
earnings to meet their state’s earnings requirements.
In summary, to be eligible to receive UC benefits a worker must
! have lost a job through no fault of his or her own,
! be actively searching for work,
! be able to work, and
! have had a minimum number of weeks worked and/or number of
quarters worked recorded in the previous five quarters, and/or
! have earned a minimum amount of wages in a quarter and/or for five
quarters.
UC Benefit Determination and Duration
Generally, benefits are based on wages for covered work over a 12-month
period. Most state benefit formulas replace half of a claimant’s average weekly wage
up to a weekly maximum. Table 1 lists the minimum and maximum UC benefits for
each state. Weekly maximums in January 2007 ranged from $210 (Mississippi) to
$575 (Massachusetts) and, in states that provide dependent’s allowances, up to $862
(Massachusetts). In March 2007, the average weekly benefit was $281. Benefits are
available for up to 26 weeks (30 weeks in Massachusetts). The average regular UC
benefit duration in March 2007 was 15 weeks.1
1 A federal-state extended benefits (EB) program offers benefits for an additional 13 to 20
weeks in states with unemployment rates above certain levels. The EB program is discussed
later in this report.

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CRS-4
Table 1. State Unemployment Compensation
Benefits Amounts, January 2007
Maximum
Minimum
Minimum If
Maximum If
Weekly UC
Weekly UC
Dependent’s
Dependent’s
Benefit
Benefit Amount
Allowance
Allowance
Amount
Alabama
$45
$230
Alaska
44
$68
248
$320
Arizona
60
240
Arkansas
71
395
California
40
450
Colorado
25
435
Connecticut
15
30
483
558
Delaware
20
330
District of
Columbia
50
359
Florida
32
275
Georgia
42
320
Hawaii
5
475
Idaho
51
338
Illinois
51
70
367
498
Indiana
50
390
Iowa
50
60
334
410
Kansas
96
386
Kentucky
39
401
Louisiana
10
258
Maine
54
84
320
480
Maryland
25
65
340
Massachusetts
31
46
575
862
Michigan
110
140
362
Minnesota
38
521
Mississippi
30
210
Missouri
56
280
Montana
103
362
Nebraska
30
288
Nevada
16
362
New Hampshire
32
372
New Jersey
73
84
536
New Mexico
65
97
326
386
New York
40
405
North Carolina
39
457
North Dakota
43
351
Ohio
100
355
479

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CRS-5
Maximum
Minimum
Minimum If
Maximum If
Weekly UC
Weekly UC
Dependent’s
Dependent’s
Benefit
Benefit Amount
Allowance
Allowance
Amount
Oklahoma
16
342
Oregon
104
445
Pennsylvania
35
43
520
528
Rhode Island
65
115
492
615
South Carolina
20
303
South Dakota
28
274
Tennessee
30
275
Texas
56
364
Utah
26
406
Vermont
59
394
Virginia
54
347
Washington
116
496
West Virginia
24
391
Wisconsin
53
355
Wyoming
25
349
Source: Congressional Research Service (CRS) table compiled from Significant Provisions of State
Unemployment Insurance Laws, January 2007, U.S. Department of Labor, Employment and Training
Administration, at [http://www.ows.doleta.gov/unemploy/sigprojan2007.asp].
UC Benefit Financing: Unemployment Taxes on Employers
UC benefits are financed through employer taxes.2 The federal taxes on
employers are under the authority of the Federal Unemployment Tax Act (FUTA),
and the state taxes are under the authority given by the State Unemployment Tax
Acts (SUTA). These taxes are deposited in the appropriate accounts within the
Unemployment Trust Fund (UTF).
Federal Unemployment Tax Act. If a state UC program complies with all
federal rules, the net FUTA tax rate for employers is 0.8% on the first $7,000 of each
worker’s earnings. (Most recently, because New York had unpaid loan balances, the
New York employers’ rate was higher for 2004 and 2005.) The 0.8% FUTA tax
funds both federal and state administrative costs as well as the federal share of the
EB program, loans to insolvent state UC accounts, and state employment services.
Federal law defines which jobs a state UC program must cover for the state’s
employers to avoid paying the maximum FUTA tax rate (6.2%) on the first $7,000
of each employee’s annual pay.
2 For a more detailed description of UC financing, see CRS Report RS22077, Unemployment
Compensation (UC) and the Unemployment Trust Fund (UTF): Funding UC Benefits, by
Christine Scott and Julie M. Whittaker.

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CRS-6
Federal law requires that a state must cover jobs in firms that pay at least $1,500
in wages during any calendar quarter or employ at least one worker in each of 20
weeks in the current or prior year. The FUTA tax is not paid by government or
nonprofit employers, but state programs must cover government workers and all
workers in nonprofits that employ at least four workers in each of 20 weeks in the
current or prior year. (States are reimbursed for expenditures related to federal
workers by the federal government.)
Approximately $7 billion in FUTA taxes were collected in FY2006. After the
payments to the state accounts for administrative expenses, the expected net balance
in the UTF of the Employment Security Administration Account, the Extended
Unemployment Compensation Account (for the EB program), and the Federal
Unemployment Account (for federal loans to the states) was expected to be $53.95
billion.
Expiring Provision: P.L. 110-140. On December 19, 2008, the President
signed P.L. 110-140. Among many other items, P.L. 110-140 includes a one-year
extension of 0.2% FUTA surtax. At the end of CY2008, the effective FUTA tax on
employers for each employee will decrease to 0.6% (down from 0.8%) on the first
$7,000 of wages. SUTA taxes are not directly affected by the expiring provision.

State Unemployment Tax Acts. States levy their own payroll taxes on
employers to fund regular UC benefits and the state share of the EB program. These
state UC tax rates are “experience-rated,” in which employers generating the fewest
claimants have the lowest rates. The state unemployment tax rate of an employer is,
in most states, based on the amount of UC paid to former employees. Generally, in
most states, the more UC benefits paid to its former employees, the higher the tax
rate of the employer, up to a maximum established by state law. The experience
rating is intended to ensure an equitable distribution of UC program taxes among
employers and to encourage a stable workforce. State ceilings on taxable wages in
2007 range from the $7,000 FUTA federal ceiling (eight states) to $35,300 (Hawaii).
The minimum rates range from 0% (six states) to 1.69% (Rhode Island). The
maximum rates range from 5.4% (16 states) to 11% (Minnesota). Approximately
$37.5 billion in SUTA taxes were collected in FY2006.
State UC revenue is deposited in the U.S. Treasury. These deposits are counted
as federal revenue in the budget. State accounts within the UTF are credited for this
revenue. The U.S. Treasury reimburses states from the appropriate UTF state
accounts for their benefit payments. These payments do not require an annual
appropriation, but the reimbursements do count as federal budget outlays.
If a state trust fund account becomes insolvent, a state may borrow federal
funds. One state has an outstanding balance in borrowed funds from the UTF loan
account (as of December 13, 2007): Michigan ($47.8 million).
The net balance of the state accounts in the UTF at the end of FY2006 was
approximately $33.4 billion.

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CRS-7
Table 2. State Unemployment Taxes: Taxable Wage Base
and Rates, January 2007
Wages Subject
Minimum State
Maximum State
State
to Tax ($)
Unemployment Tax (%) Unemployment Tax (%)
Alabama
8,000
0.44
6.04
Alaska
30,100
1.21
5.40
Arizona
7,000
0.02
5.40
Arkansas
10,000
0.10
10.00
California
7,000
1.30
5.40
Colorado
10,000
0.30
5.40
Connecticut
15,000
0.50
5.40
Delaware
8,500
0.30
8.20
DC
9,000
1.30
6.60
Florida
7,000
0.32
5.40
Georgia
8,500
0.03
5.4
Hawaii
35,300
0.00
5.40
Idaho
29,200
0.48
5.40
Illinois
11,500
0.20
7.40
Indiana
7,000
1.10
5.60
Iowa
22,000
0.00
8.00
Kansas
8,000
0.06
7.40
Kentucky
8,000
0.06
9.50
Louisiana
7,000
0.10
6.20
Maine
12,000
0.54
5.40
Maryland
8,500
0.30
9.00
Massachusetts
14,000
1.12
10.96
Michigan
9,000
0.06
10.30
Minnesota
24,000
0.40
11.00
Mississippi
7,000
0.40
5.40
Missouri
11,000
0.00
6.00
Montana
22,700
0.13
6.50
Nebraska
9,000
0.24
5.40
Nevada
24,600
0.25
5.40
New Hampshire
8,000
0.01
6.50
New Jersey
26,600
0.18
5.40
New Mexico
18,600
0.03
5.40
New York
8,500
0.90
8.90
North Carolina
17,800
0.00
5.70
North Dakota
21,300
0.34
8.09
Ohio
9,000
0.40
9.00
Oklahoma
13,200
0.20
5.80
Oregon
29,000
.90
5.40
Pennsylvania
8,000
0.30
9.20
Rhode Island
16,000
1.69
9.79
South Carolina
7,000
1.24
6.10

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CRS-8
Wages Subject
Minimum State
Maximum State
State
to Tax ($)
Unemployment Tax (%) Unemployment Tax (%)
South Dakota
8,000
0.00
7.00
Tennessee
7,000
0.15
10.00
Texas
9,000
0.40
7.64
Utah
25,400
0.30
9.30
Vermont
8,000
0.80
6.5
Virginia
8,000
0.10
6.20
Washington
31,400
0.47
6.12
West Virginia
8,000
1.50
7.50
Wisconsin
10,500
0.00
8.90
Wyoming
18,100
0.47
8.79
Source: CRS table compiled from Significant Provisions of State Unemployment Insurance Laws,
January 2007, U.S. Department of Labor, Employment and Training Administration, at
[http://www.ows.doleta.gov/unemploy/sigprojan2007.asp].
Generally, during economic expansions, FUTA and SUTA revenue collections
will exceed UC outlays. During economic recessions, revenues generally will be less
than UC outlays. UTF revenue (SUTA and FUTA collections) exceeded outlays
from FY1995-FY2000, but outlays significantly exceeded trust fund revenue in
FY2001-FY2004. Beginning in FY2005, UC revenue exceeded total UC outlays.
Table 3 lists the total revenue and outlays associated with the UC program from
FY2000 through FY2007 (estimated).
Table 3. Revenue and Spending Associated With
Unemployment Compensation, FY2000-FY2007
(in billions of dollars)
2000
2001
2002
2003
2004
2005
2006
2007b
UC revenue, total
27.1
27.8
27.5
33.2
39.3
41.8
43.0
44.9
FUTA
tax
6.9
6.9
6.6
6.5
6.6
6.7
7.1
7.3
State UC taxes
20.7
20.8
20.9
26.7
32.7
35.1
35.9
37.6
UC outlays, total
23.7
31
53.8
57.4
40.9
35.0
34.3
34.7
Regular
benefits
20.2
27.3
42
42
36.9
31.2
30.2
30.8
Extended
benefits
a
a
0.16
0.32
0.16
0.00
0.20
0.0
Emergency UC
—
—
7.9
11
4.1
—
—
—
Administration
3.5
3.6
3.7
4.1
3.9
3.8
3.9
3.9
Source: U.S. Department of Labor, UI Outlook, January 1998-February 2007.
a. Less than $50 million.
b. Estimated for 2007.
Outstanding Loans from the Federal Unemployment Account (FUA).
If a state trust fund account becomes insolvent, a state may borrow federal funds.
Three states had outstanding balances in borrowed funds from the FUA as of April
2007: Michigan, Missouri, and New York.

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CRS-9
Trade Adjustment Assistance (TAA):
Unemployment Benefit Extensions for Workers
Unemployed on Account of International Trade
The TAA program, established by the Trade Expansion Act of 1962 (P.L.
87-794) and now authorized by the Trade Act of 1974 (P.L. 93-618), as amended,
extends UC benefits and provides job training for workers dislocated by import
competition.3
Expiring Authorization
The Trade Adjustment Assistance Reform Act of 2002 (P.L. 107-210)
reauthorized the TAA and ATAA programs through FY2007. P.L. 110-89 (Herger,
H.R. 3375) extends the Trade Act of 1974, through CY2007.
TAA Eligibility
To be certified for TAA eligibility, a group of workers or their former employer
petitions the DOL, and DOL investigates whether import competition “contributed
importantly” to their job loss or whether their firm has shifted production of similar
products to certain countries. The new TAA also extends eligibility to secondary
workers whose job loss results from the loss of business with a primary firm.
Determinations should be completed within 40 days.
TAA Benefits and Duration
The income support portion of the TAA is a trade readjustment allowance
(TRA) benefit. The TRA benefit is identical to the UC benefit the worker would
have received under the regular UC program of the worker’s state. The TRA benefit
is available for 52 weeks, less any weeks in which regular UC or EB benefits are
received, plus an additional 52 weeks for claimants still in approved job training after
the basic TRA runs out. An additional 26-week extension is available to those in
need of remedial education. Therefore, the total period of unemployment benefit
receipt for a TAA certified unemployed worker — including regular and extended
UC benefits, as well as the TRA benefits — may last as long as 130 weeks.
Other Benefits. The Health Care Tax Credit (HCTC), a refundable and
advanceable tax credit for 65% of health insurance premiums, is available to TAA
and ATAA eligibles for the purchase of insurance through COBRA continuation
3 For more information on the TAA program, see CRS Report RS22718, Trade Adjustment
Assistance for Workers (TAA) and Alternative Trade Adjustment Assistance for Older
Workers (ATAA), by John J. Topoleski. For more information on the Health Care Tax
Credit, see CRS Report RL32620, Health Coverage Tax Credit Authorized by the Trade Act
of 2002, by Bernadette Fernandez.

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CRS-10
coverage,4 high-risk pools, state employee plans, or other means. An allowance of
up to $1,250 may be paid to eligible workers who must search for work outside their
commuting area. Another $1,250 allowance may be paid for the cost of relocation
to another job market.
An alternative TAA (ATAA) for older workers, which replaces up to 50% of the
wage difference between the wages in a new job and the old one for up to two years,
was established by the Trade Act of 2002 (P.L. 107-210). The ATAA program went
into effect on August 6, 2003, and is intended to shorten transitions into new
occupations or industries without requiring older workers to participate in training
programs. Eligibility is limited to those over age 50 whose incomes are less than
$50,000 yearly, who work full time, and who find new jobs within 26 weeks after job
separation. The total benefit cannot exceed $10,000.
TAA Financing
TRA and ATAA benefits are financed through the Federal Unemployment
Benefit Account (FUBA). TRA and ATAA benefit administrative costs are paid
from funds appropriated for TAA administration under the State Unemployment
Insurance and Employment Services Operations (SUIESO) account.
Extended Benefit (EB) Program
The EB program, established by P.L. 91-373 (26 U.S.C. 3304), may extend UC
benefits at the state level if certain economic situations within the state exist.
Currently, the EB program is not active in any state. Louisiana was the most recent
state to trigger the EB program on October 30, 2005. The EB program for Louisiana
triggered “off” on February 25, 2006. Unemployed Louisiana workers who
exhausted their regular UC benefits on or after October 30, 2005, and before
February 25, 2006, were eligible for 13 weeks of EB; unemployed Louisiana workers
who exhausted their regular UC benefits after February 25, 2006, were not eligible
for the EB program.
4 Under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA,
P.L. 99-272), an employer with 20 or more employees must provide those employees and
their families the option of continuing their coverage under the employer’s group health
insurance plan in the case of certain events. For more details on the COBRA benefit, see
CRS Report RL30626, Health Insurance Continuation Coverage Under COBRA, by Heidi
Yacker.

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CRS-11
EB Eligibility
The EB program is triggered when a state’s insured unemployment rate (IUR)5
or total unemployment rate (TUR)6 reaches certain levels. Each state’s IUR and TUR
are determined by the state of residence (agent state) of the unemployed worker
rather than by the state of employment (liable state).
EB Benefits and Duration
The EB program provides for additional weeks of UC benefits, up to a
maximum of 13 weeks during periods of high unemployment and up to a maximum
of 20 weeks in certain states with extremely high unemployment.
EB benefits on interstate claims are limited to two extra weeks unless both the
agent state (e.g., Texas) and liable state (e.g., Louisiana) are both in an EB period.
EB Financing
EB benefits are funded half (50%) by the federal government through its
account for that purpose in the UTF; states fund the other half (50%) through their
state accounts in the UTF.
Temporary Extended Unemployment Compensation
(TEUC) Program (Currently Expired)
Federal Temporary Extended Unemployment Compensation
Program. Congress acted five times — in 1971, 1974, 1982, 1991, and 2002 — to
establish a temporary program of extended UC benefits. None of these programs was
in response to a disaster declaration. All of these programs had a termination date,
some of which were extended multiple times. As of this writing, there are no current
TEUC programs.
TEUC Benefits and Duration
These programs generally extend UC benefits for an additional 13 weeks and
have an expiration date for when the TEUC program would terminate.
Most recently, the TEUC program7 was enacted on March 9, 2002, as part of the
Job Creation and Worker Assistance Act of 2002 (P.L. 107-147). The TEUC
program provided up to 13 weeks of federally funded benefits for unemployed
workers who had exhausted their regular UC benefits. In addition, up to an
5 The IUR is the ratio of UC claimants divided by individuals in UC-covered jobs.
6 The TUR is the ratio of unemployed workers to all workers in the labor market.
7 For more information on this program, see CRS Report RS21397, Unemployment Benefits:
Temporary Extended Unemployment Compensation (TEUC) Program, by Celinda Franco.

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additional 13 weeks were provided in certain high unemployment states that had an
IUR of 4% or higher and met certain other criteria (TEUC-X).
P.L. 107-147 also provided for a one-time $8 billion distribution to states,
known as Reed Act funds.8 TEUC benefits were payable to individuals who, in
addition to meeting other applicable state UC law provisions:
! filed an initial claim that was in effect during or after the week of
March 15, 2001,
! exhausted regular benefits or had no benefit rights due to the
expiration of a benefit year ending during or after the week of March
15, 2001,
! had no rights to regular or extended benefits under any state or
federal law, and
! were not receiving benefits under Canadian law.
In addition, individuals must also have had 20 weeks of full-time work, or the
equivalent in wages, in their base periods. These temporary benefits ended on
December 28, 2002. The 108th Congress extended the TEUC program twice (P.L.
108-18 and P.L. 108-26). Thus, TEUC eligibility was possible through the week
ending before December 31, 2003, and TEUC benefits were paid through the week
of April 3, 2004.
On April 16, 2003, P.L. 108-11 was signed into law, creating a parallel TEUC
program called TEUC-A. TEUC-A provides up to 39 weeks of benefits for displaced
airline workers, and provides a second tier (TEUC-AX) of benefits to individuals
exhausting their TEUC-A benefits in a high-unemployment state. These temporary
benefits were paid through the week of December 26, 2004.
TEUC Financing
Recently, the TEUC programs were fully funded through the federal
government.
8 For more information on the Reed Act, see CRS Report RS22006, The Unemployment
Trust Fund and Reed Act Distributions, by Julie M. Whittaker.

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CRS-13
Disaster Unemployment Assistance (DUA)9
DUA benefits were created in 1970 by the Robert T. Stafford Disaster Relief
and Emergency Relief Act (the Stafford Act, P.L. 91-606). The Stafford Act
authorizes the President to issue a major disaster declaration after state and local
government resources have been overwhelmed by a natural catastrophe or “regardless
of cause, any fire, flood, or explosion in any part of the United States” (42 U.S.C.
5122(2)). Based on the request of the affected state’s governor, the President may
declare that a major disaster exists.
The declaration identifies the areas in the state eligible for assistance. The
declaration of a major disaster provides the full range of disaster assistance available
under the Stafford Act, including, but not limited to, the repair, replacement, or
reconstruction of public and nonprofit facilities; cash grants for the personal needs
of victim; housing; and unemployment assistance related to job loss from the
disaster.
DUA Eligibility
DUA benefits are available to individuals who have become unemployed as a
direct result of a declared major disaster. Workers who do not qualify for UC
benefits may be eligible for DUA benefits for 26 weeks. Also, if a worker qualified
for fewer than 26 weeks of UC benefits, the worker may qualify for DUA benefits for
the remaining weeks if the worker is unemployed for reasons directly attributable to
the disaster. A worker may not receive DUA and UC benefits at the same time.
The DUA regulation defines eligible unemployed workers to include
! the self-employed;
! workers who experience a “week of unemployment” following the
date the major disaster began, when such unemployment is a direct
result of the major disaster;
! workers unable to reach the place of employment as a direct result
of the major disaster and workers who were to begin employment
and who do not have a job or are unable to reach the job as a direct
result of the major disaster;
! individuals who have become the breadwinner or major support for
a household because the head of the household has died as a direct
result of the major disaster; and
! workers who cannot work because of injuries caused as a direct
result of the disaster.
9 See CRS Report RS22022, Disaster Unemployment Assistance (DUA), by Julie M.
Whittaker for more information on this program.

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CRS-14
DUA Benefit Determination and Duration
When a reasonable comparative earnings history can be constructed, DUA
benefits are determined in a similar manner to regular state UC benefit rules. For
example, self-employed persons would be expected to bring in their tax records to
prove a level of earnings for the previous two years. These records would take the
place of the employer-reported wage data for the workers that are used in UC benefit
determination. Likewise, workers who would otherwise be eligible for UC benefits
except for the injuries caused as a direct result of the disaster that make them
unavailable for work would receive DUA benefits of an amount equivalent to what
they would have received under the UC system if they were not injured and available
to work. In all cases, workers will receive a DUA benefit that is at least half of the
average UC benefit for that state and cannot receive more than the maximum UC
benefit available in that state.
DUA Financing
DUA benefits are federally funded through the Federal Emergency Management
Agency (FEMA) and administered by DOL through each state’s UC agency. The
states report the amount of DUA benefits that were attributable to the disaster. DOL
then transfers funds to the states from the Federal Unemployment Benefit and
Allowance (FUBA) account. DOL is reimbursed for these funds by FEMA.
Legislative Issues
110th Congress
Expiring FUTA Surtax. On December 19, 2008, the President signed P.L.
110-140 (H.R. 6). Among many other items, P.L. 110-140 includes a one-year
extension of 0.2% FUTA surtax. At the end of CY2008, the effective FUTA tax on
employers for each employee will decrease to 0.6% (down from 0.8%) on the first
$7,000 of wages. SUTA taxes are not directly affected by the expiring provision.
SUTA taxes are not directly affected by the expiring provision.
H.R. 3920 (Rangel), although primarily a bill to expand and extend the TAA
program, also would allow up to $7 billion in UC modernization incentive payments
in FY2008-2012 if state law meets certain conditions. The bill would also extend the
surtax through CY2010. The House of Representatives passed H.R. 3920 on October
31, 2007.
S. 1871 (Baucus) and H.R. 2233 (Kennedy) would offer a similar package of up
to $7 billion in UC modernization incentive payments to the states as in H.R. 3920.
Both bills would extend the surtax through CY2012.
Expiring TAA Authorization. The 110th Congress is considering the
expiring authorization of the TAA and ATAA programs. The Trade Adjustment
Assistance Reform Act of 2002 (P.L. 107-210) reauthorized the TAA and ATAA

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CRS-15
programs through FY2007; P.L. 110-89 (Herger, H.R. 3375) extends the Trade Act
of 1974, through CY2007.
H.R. 3920 (Rangel) would extend eligibility to service and public sector
workers, allow for automatic approval of firms within an industry, increase the
deadline to enroll in training to 26 weeks, allow participants to work part-time while
enrolled in training, increase the training cap to $440 million, increase the HCTC
from 65% to 85%, extend the HCTC through CY2009, and establish 24
manufacturing redevelopment zones that would be eligible for redevelopment tax
incentives. The bill would extend the TAA program through FY2012. The House
of Representatives passed H.R. 3920 on October 31, 2007.
H.R. 910 (English) would extend certification to an entire industry after three
or more certifications within a six-month period and allow certifications for
production shifts to any foreign country. The bill would extend authorization for the
TAA program through FY2012.
H.R. 1729 (Hayes) and S. 1652 (Dole) would allow for eligibility for affected
workers regardless of the country of the production shift and would extend TAA to
textile and apparel workers without regard to the group eligibility requirements.
Similarly, H.R. 3589 (King) would extend TAA benefits to service industry workers
that provide information technology or other high technology services. S. 122
(Baucus) would extend benefits to workers in service industries and the public sector
and expand certification to include workers within an entire industry or occupation;
it would also lower the age requirement for ATAA from 50 to 40. Only S. 122
would extend authorization for the TAA program through FY2012.
H.R. 3801 (Adam Smith) and S. 1848 (Baucus) would, in addition to provisions
mentioned in S. 122 above, allow training funds to be used for higher education
expenses and waive the training requirement for post-graduate degree holders. The
bills would also increase the HCTC from 65% to 85%. The bills would double the
training funding cap from $220 million to $440 million. Both bills would extend
authorization for the TAA program through FY2012.
H.R. 3943 (Herger) would expand eligibility to include workers who make an
intangible product such as software, allow participants to simultaneously work and
receive training, and to continue to receive the HCTC. The bill would extend
authorization for the TAA program through FY2012.
Other Proposed Legislation. The Compensation Improvement Act of
2007, H.R. 1513 (Weller), would authorize the Secretary of Labor to allow states to
conduct two-year demonstration projects to test and evaluate a wage insurance
program.
The Trade Adjustment Assistance Reform Act, H.R. 1729 (Hayes), would
expand eligibility for TAA to textile and apparel workers, would double the funds
available for TAA training purposes to $440 million, and would increase the HCTC
to 80%.

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CRS-16
S. 592 (Collins) would provide a tax credit to manufacturers that employ
displaced workers who are receiving benefits under the TAA, as well as those who
are receiving benefits under the ATAA. H.R. 3843 (Reynolds) would expand the
New Markets Tax Credit to spur investments into businesses that receive TAA
benefits or employ TAA-eligible workers.
S. 1739 (Rockefeller) would increase the HCTC to 95% and offer TAA-eligible
workers enrollment in the Federal Employees Health Benefit Program.
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