1Amending the act of December 5, 1936 (2nd Sp.Sess., 1937 
2P.L.2897, No.1), entitled "An act establishing a system of 
3unemployment compensation to be administered by the 
4Department of Labor and Industry and its existing and newly 
5created agencies with personnel (with certain exceptions) 
6selected on a civil service basis; requiring employers to 
7keep records and make reports, and certain employers to pay 
8contributions based on payrolls to provide moneys for the 
9payment of compensation to certain unemployed persons; 
10providing procedure and administrative details for the 
11determination, payment and collection of such contributions 
12and the payment of such compensation; providing for 
13cooperation with the Federal Government and its agencies; 
14creating certain special funds in the custody of the State 
15Treasurer; and prescribing penalties," further providing for 
16contributions by employees <-and for trigger rate 
17redeterminations; and providing for regular contributions by 
18employees.;<- establishing the Service and Infrastructure 
19Improvement Fund; and further providing for the Unemployment 
20Compensation Fund.

21The General Assembly of the Commonwealth of Pennsylvania
22hereby enacts as follows:

<-23Section 1. Sections 301.4 and 301.8(b) of the act of
24December 5, 1936 (2nd Sp.Sess., 1937 P.L.2897, No.1), known as

1the Unemployment Compensation Law, amended June 12, 2012
2(P.L.577, No.60), are amended to read:

<-3Section 1. Section 301.4 of the act of December 5, 1936 (2nd
4Sp.Sess., 1937 P.L.2897, No.1), known as the Unemployment
5Compensation Law, amended June 12, 2012 (P.L.577, No.60), is
6amended to read:

7Section 301.4. Contributions by Employes.--(a)
8Notwithstanding any other provision of this act, each employe
9shall pay contributions at a rate of zero per centum (0.0%) for
10calendar year 1989 and at a rate as set forth in section 301.7
11for each calendar year thereafter of all wages paid for
12"employment" as defined by the act without regard to the
13limitation specified in section 4(x)(1) of this act.

14(b) Each employer subject to this act shall be responsible
15for withholding and shall withhold, in trust, such contributions
16from the wages of his employes at the time such wages are paid,
17and shall report and transmit such deductions to the department
18for deposit into the Unemployment Compensation Fund [and], the 
19Reemployment Fund and the <-Administration Service and 
20Infrastructure Improvement Fund pursuant to the allocation 
21prescribed in subsection (e), in accordance with rules and
22procedures established by the department.

23(c) Any employer who is an individual, or any officer or
24agent of any employer, who violates the trust provision of this
25section, fails to withhold, hold in trust or fails to transmit
26to the department all contributions withheld from the wages of
27his employes in accordance with the rules and procedure
28established by the department shall be subject to the provisions
29of clause (2) of subsection (a) of section 301 and sections 308,
30308.1, 308.2, 308.3 and 309 of this act.

1(d) This section shall not be deemed to affect or impair the
2operation of any State statute or ordinance or resolution of a
3political subdivision which levies or collects any wage tax or
4similar tax. Contributions made pursuant to this section are not
5intended to reduce or otherwise affect any tax on wages or
6similar tax.

7(e) Contributions paid under this section shall be allocated
8by the department [between<-] among the Unemployment Compensation
9Fund [and], the Reemployment Fund and the <-Administration Service 
10and Infrastructure Improvement Fund as follows:

11[(1) [Ninety-five per centum (95%)<-] Five per centum (5%) of
12the contributions on wages paid from January 1, 2013, through
13September 30, 2017, shall be deposited into the <-[Unemployment
14Compensation Fund and five per centum (5%) of such contributions
15shall be deposited into the<-] Reemployment Fund to the extent the
16contributions are paid on or before December 31, 2017.

17(2) <-[One hundred per centum (100%) of the contributions on
18wages paid from January 1, 2013, through September 30, 2017,
19shall be deposited into the Unemployment Compensation Fund to
20the extent the contributions are paid on or after January 1,
212018.<-] During each calendar year from 2013 through 2016 an 
22amount determined by the secretary with the approval of the 
23Governor shall be deposited into the Service and Infrastructure 
24Improvement Fund. For calendar year 2013, the amount determined 
25under this clause may not exceed forty million dollars 
26($40,000,000). For calendar year 2014, the amount determined 
27under this clause may not exceed thirty million dollars 
28($30,000,000). For calendar years 2015 and 2016, the amount 
29determined under this clause for each calendar year may not 
30exceed one hundred ninety million dollars ($190,000,000)
 

1adjusted by the increase in the Bureau of Labor Statistics 
2Consumer Price Index for the period from May 2013 through 
3January of the calendar year less the amount of Federal 
4administrative funding for the preceding Federal fiscal year.

5(3) <-[One hundred per centum (100%) of the contributions on
6wages paid on or after October 1, 2017, shall be deposited into
7the Unemployment Compensation Fund.] <-The remaining contributions 
8shall be deposited into the Unemployment Compensation Fund.

9(4) The department may deposit contributions in accordance
10with clause (2) before depositing contributions in accordance
11with clauses (1) and (3).

<-12(1) Ninety-five per centum (95%) of the contributions shall
13be deposited into the Unemployment Compensation Fund.

14(2) Five per centum (5%) of such contributions shall be
15deposited as follows:

16(i) Not less than ten million dollars ($10,000,000) shall
17annually be deposited into the Administration Fund with the
18remaining contributions deposited into the Reemployment Fund to
19the extent that contributions are paid on or before December 31,
202017.

21(ii) Commencing January 1, 2018, the contributions shall be
22deposited into the Administration Fund to the extent that such
23contributions are paid on or after January 1, 2018.

24(iii) Contributions deposited into the Administration Fund
25under subparagraphs (i) and (ii) shall be prioritized for costs
26to improve the efficiency of the unemployment compensation
27service center system, including costs of increased staffing,
28training for temporary or intermittent positions to ensure a
29ready work force as needed, and necessary upgrades to telephone
30and electronic service center and claims filing systems.

1Section 301.8. Trigger Rate Redeterminations.--* * *

2(b) (1) For calendar years 2013 through the year determined
3under paragraph (4), if the trigger percentage as of July 1 of
4the preceding calendar year is less than two hundred fifty per
5centum (250%), the rates determined under paragraph (2) shall
6apply. For calendar years following the year determined under
7paragraph (4), if the trigger percentage as of July 1 of the
8preceding calendar year is less than two hundred fifty per
9centum (250%), the rates determined under paragraph (3) shall
10apply.

11(2) (i) The secretary shall redetermine the rates such that
12the surcharge assessed under section 301.5 shall yield one
13hundred million dollars ($100,000,000), the additional
14contribution under section 301.2 shall yield two hundred twenty-
15five million dollars ($225,000,000), the employe tax under
16section 301.4 shall yield one hundred sixty-six million six
17hundred sixty-six thousand six hundred sixty-six dollars
18($166,666,666), and the benefit reduction under section 404(e)
19(4) shall yield fifty-two million dollars ($52,000,000).

20(ii) For calendar years 2018 through the year determined
21under paragraph (4), notwithstanding the dollar limitation in
22subparagraph (i), the employe tax rate applicable under section
23301.4 and redetermined under this paragraph shall not be set at
24a rate less than eight-hundredths of one per centum (0.08%).

25(3) (i) The secretary shall redetermine the rates such that
26the surcharge assessed under section 301.5 shall yield one
27hundred thirty-eight million dollars ($138,000,000), the
28additional contribution under section 301.2 shall yield the sum
29of three hundred ten million dollars ($310,000,000) plus the
30amount determined under paragraph (5), the employe tax under

1section 301.4 shall yield two hundred thirty million dollars
2($230,000,000), and the benefit reduction under section 404(e)
3(4) shall yield seventy-two million dollars ($72,000,000).

4(ii) Notwithstanding the dollar limitation in subparagraph
5(i), the employe tax rate applicable under section 301.4 and
6redetermined under this paragraph shall not be set at a rate
7less than eight-hundredths of one per centum (0.08%).

8(4) The calendar year determined under this paragraph shall
9be the earliest calendar year subsequent to 2012 on December 31
10of which all of the following apply:

11(i) There is no unpaid balance of Federal advances under
12Title XII of the Social Security Act (58 Stat. 790, 42 U.S.C. §
131321, et seq.) or interest thereon.

14(ii) There are no outstanding bond obligations under Article
15XIV of this act and no bond administrative expenses under
16Article XIV of this act and no such obligations and no such
17expenses will be due in the following year.

18(5) The amount determined under this paragraph shall be the
19sum of:

20(i) twenty per centum (20%) of the amount paid from the
21Unemployment Compensation Fund pursuant to section 1407(c)
22during the sixty (60) consecutive calendar months ending on June
2330 of the year in which the redetermination occurs, plus

24(ii) twenty per centum (20%) of that portion of the amount
25paid from the Unemployment Compensation Fund pursuant to section
261407(c) during the immediately preceding sixty (60) consecutive
27calendar months that is not recovered by additional
28contributions paid for calendar years through the calendar year
29in which the redetermination occurs.

30* * *

1Section 2. The act is amended by adding a section to read:

2Section 301.9. Regular Contributions by Employes.--(a)
3Notwithstanding any other provision of this act, for every
4calendar year in which the employe tax under section 301.4 is
5not effective, each employe shall contribute eight-hundredths of
6one percent (0.08%) of all wages paid for employment without
7regard to the limitation specified in section 4(x)(1).

8(b) Each employer subject to this act shall be responsible
9for withholding and shall withhold, in trust, such contributions
10from the wages of his employes at the time such wages are paid,
11and shall report and transmit such deductions to the department
12for deposit into the Unemployment Compensation Fund and the
13Administration Fund pursuant to the allocation prescribed in
14subsection (e), in accordance with rules and procedures
15established by the department.

16(c) Any employer who is an individual, or any officer or
17agent of any employer, who violates the trust provision of this
18section, fails to withhold, hold in trust or fails to transmit
19to the department all contributions withheld from the wages of
20an employer's employes in accordance with the rules and
21procedure established by the department shall be subject to the
22provisions of sections 301(a)(2), 308, 308.1, 308.2, 308.3 and
23309.

24(d) This section shall not be deemed to affect or impair the
25operation of any State statute or ordinance or resolution of a
26political subdivision which levies or collects any wage tax or
27similar tax. Contributions made pursuant to this section are not
28intended to reduce or otherwise affect any tax on wages or
29similar tax.

30(e) Contributions paid under this section shall be allocated

1by the department between the Unemployment Compensation Fund and
2the Administration Fund as follows:

3(1) Sixty per centum (60%) of the contributions shall be
4deposited into the Unemployment Compensation Fund.

5(2) Forty per centum (40%) of such contributions shall be
6deposited into the Administration Fund. This money shall be
7prioritized for costs to improve the efficiency of the
8unemployment compensation service center system, including costs
9of increased staffing, training for temporary or intermittent
10positions to ensure a ready work force as needed, and necessary
11upgrades to telephone and electronic service center and claims
12filing systems.

13Section 3. This act applies as follows:

14(1) The amendment of section 301.4 of the act shall apply to
15contributions on wages paid on or after January 1, 2013.

16(2) The amendment of section 301.8(b) of the act shall apply
17to the redetermination of employee contribution rates to occur
18under section 301.8 beginning in 2017 and each fifth year
19thereafter for purposes of contribution rates for calendar year
202018 and thereafter, respectively.

<-21Section 2. The act is amended by adding a section to read:

22Section 301.9. Service and Infrastructure Improvement
23Fund.--(a) There is established a restricted account in the
24State Treasury to be known as the Service and Infrastructure
25Improvement Fund.

26(b) Moneys in the Service and Infrastructure Improvement
27Fund shall consist of contributions deposited into the fund
28pursuant to section 301.4(e)(2).

29(c) Moneys in the Service and Infrastructure Improvement
30Fund are appropriated on a continuing basis, upon approval of

1the Governor, to the department to be prioritized for the
2following purposes:

3(1) To improve the quality, efficiency and timeliness of
4services provided by the service center system to individuals
5claiming compensation under this act, including claim filing,
6claim administration, adjudication services and staffing and
7training of system employes.

8(2) Expenditures for information management technology,
9communications technology and other infrastructure components
10that, in the judgment of the secretary, are likely to result in
11significant and lasting improvements to the unemployment
12compensation system.

13(3) To pay the costs of collecting the contributions
14deposited into the Service and Infrastructure Improvement Fund
15pursuant to section 301.4(e)(2).

16(d) No moneys in the Service and Infrastructure Improvement
17Fund may be expended or obligated to a third party to perform
18unemployment compensation services of the department, except
19services relating to technology and infrastructure components
20deemed necessary by the secretary under subsection (c)(2).

21(e) Any moneys in the Service and Infrastructure Improvement
22Fund that are not expended or obligated as of December 31, 2018,
23shall be transferred to the Unemployment Compensation Fund under
24section 601.

25(f) Moneys in the Service and Infrastructure Improvement
26Fund shall not lapse at any time nor be transferred to any other
27fund except as provided in subsection (e).

28(g) No later than June 30 of each calendar year from 2014
29through 2019 the department shall provide a report to the
30Governor and the General Assembly regarding the Service and

1Infrastructure Improvement Fund, which report shall include an
2accounting for the contributions deposited into the fund, the
3expenditures and transfers from the fund during the prior year
4and a description of the purposes for which expenditures from
5the fund were made in the prior year.

6Section 3. Section 601(a) of the act, amended June 12, 2012
7(P.L.577, No.60), is amended to read:

8Section 601. Unemployment Compensation Fund.--(a) There is
9hereby created a special fund separate and apart from all public
10moneys or funds of this Commonwealth to be known as the
11Unemployment Compensation Fund. All contributions paid by
12employers and employes, together with penalties and interest
13thereon, received or collected by the department from employers
14under the provisions of this act, except contributions which are 
15to be paid into the Reemployment Fund and the Service and 
16Infrastructure Improvement Fund as provided in section 301.4(e),
17such penalties and interest which are to be paid into the
18Special Administration Fund as provided in section 601.1 and
19taxes collected under section 301.6 of this act which are to be
20paid into the Debt Service Fund as provided in section 601.2,
21shall be paid into the Unemployment Compensation Fund, and shall
22be credited by the department to a ledger account to be known as
23the Employers' Contribution Account. Contributions which are to 
24be paid into the Reemployment Fund and the Service and 
25Infrastructure Improvement Fund as provided in section 301.4(e), 
26interest and penalties which are to be credited to the Special
27Administration Fund and taxes collected under section 301.6 may
28be temporarily held in the Employers' Contribution Account
29solely for clearance purposes prior to transfer to the 
30Reemployment Fund, the Service and Infrastructure Improvement
 

1Fund, the Special Administration Fund or the Debt Service Fund
2and while so held in the Employers' Contribution Account shall
3not be deemed a part of the Unemployment Compensation Fund. All
4moneys from time to time received and credited to the Employers'
5Contribution Account (exclusive of refunds made under section
6311, contributions transferred to the Reemployment Fund and the 
7Service and Infrastructure Improvement Fund pursuant to section 
8301.4(e) and interest and penalties transferred as herein
9provided to the Special Administration Fund and taxes
10transferred to the Debt Service Fund) shall be paid promptly by
11the department into the Unemployment Compensation Fund, except
12as otherwise provided in section 605 of this act. All moneys
13credited to this Commonwealth's account in the Unemployment
14Compensation Fund pursuant to section 903 of the Federal Social
15Security Act (42 U.S.C. § 1103) shall be included in the
16Unemployment Compensation Fund.

17* * *

18Section 4. This act shall take effect immediately.