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; establishing the Service and 
17Infrastructure Improvement Fund; and further providing for 
18the Unemployment Compensation Fund.

19The General Assembly of the Commonwealth of Pennsylvania
20hereby enacts as follows:

21Section 1. Section 301.4 of the act of December 5, 1936 (2nd
22Sp.Sess., 1937 P.L.2897, No.1), known as the Unemployment
23Compensation Law, amended June 12, 2012 (P.L.577, No.60), is
24amended to read:

25Section 301.4. Contributions by Employes.--(a)
26Notwithstanding any other provision of this act, each employe

1shall pay contributions at a rate of zero per centum (0.0%) for
2calendar year 1989 and at a rate as set forth in section 301.7
3for each calendar year thereafter of all wages paid for
4"employment" as defined by the act without regard to the
5limitation specified in section 4(x)(1) of this act.

6(b) Each employer subject to this act shall be responsible
7for withholding and shall withhold, in trust, such contributions
8from the wages of his employes at the time such wages are paid,
9and shall report and transmit such deductions to the department
10for deposit into the Unemployment Compensation Fund [and], the 
11Reemployment Fund and the Service and Infrastructure Improvement 
12Fund pursuant to the allocation prescribed in subsection (e), in
13accordance with rules and procedures established by the
14department.

15(c) Any employer who is an individual, or any officer or
16agent of any employer, who violates the trust provision of this
17section, fails to withhold, hold in trust or fails to transmit
18to the department all contributions withheld from the wages of
19his employes in accordance with the rules and procedure
20established by the department shall be subject to the provisions
21of clause (2) of subsection (a) of section 301 and sections 308,
22308.1, 308.2, 308.3 and 309 of this act.

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

29(e) Contributions paid under this section shall be allocated
30by the department [between] among the Unemployment Compensation

1Fund [and], the Reemployment Fund and the Service and 
2Infrastructure Improvement Fund as follows:

3(1) [Ninety-five per centum (95%)] Five per centum (5%) of
4the contributions on wages paid from January 1, 2013, through
5September 30, 2017, shall be deposited into the [Unemployment
6Compensation Fund and five per centum (5%) of such contributions
7shall be deposited into the] Reemployment Fund to the extent the
8contributions are paid on or before December 31, 2017.

9(2) [One hundred per centum (100%) of the contributions on
10wages paid from January 1, 2013, through September 30, 2017,
11shall be deposited into the Unemployment Compensation Fund to
12the extent the contributions are paid on or after January 1,
132018.] During each calendar year from 2013 through 2016 an 
14amount determined by the secretary with the approval of the 
15Governor shall be deposited into the Service and Infrastructure 
16Improvement Fund. For calendar year 2013, the amount determined 
17under this clause may not exceed forty million dollars 
18($40,000,000). For calendar year 2014, the amount determined 
19under this clause may not exceed thirty million dollars 
20($30,000,000). <-For calendar year 2015, the amount determined 
21under this clause may not exceed twenty million dollars 
22($20,000,000). For calendar year 2016, the amount determined 
23under this clause may not exceed ten million dollars 
24($10,000,000). <-For calendar years 2015 and 2016, the amount 
25determined under this clause for each calendar year may not 
26exceed one hundred and ninety million dollars ($190,000,000) 
27adjusted by the increase in the Bureau of Labor Statistics 
28Consumer Price Index for the period from May 2013, through 
29January of the calendar year less the amount of Federal 
30administrative funding for the preceding fiscal year.

1(3) [One hundred per centum (100%) of the contributions on
2wages paid on or after October 1, 2017, shall be deposited into
3the Unemployment Compensation Fund.] The remaining contributions 
4shall be deposited into the Unemployment Compensation Fund.

5(4) The department may deposit contributions in accordance
6with clause (2) before depositing contributions in accordance
7with clauses (1) and (3).

8Section 2. The act is amended by adding a section to read:

9Section 301.9. Service and Infrastructure Improvement
10Fund.--(a) There is established a restricted account in the
11State Treasury to be known as the Service and Infrastructure
12Improvement Fund.

13(b) Moneys in the Service and Infrastructure Improvement
14Fund shall consist of contributions deposited into the fund
15pursuant to section 301.4(e)(2).

16(c) Moneys in the Service and Infrastructure Improvement
17Fund are appropriated on a continuing basis, upon approval of
18the Governor, to the department <-to be prioritized for the
19following purposes:

20(1) To improve the quality, efficiency and timeliness of
21services provided by the service center system to individuals
22claiming compensation under this act, including claim filing,
23claim administration and, adjudication services <-and staffing and
24training of system employes.

25(2) Expenditures for information management technology,
26communications technology and other infrastructure components
27that the secretary determines are likely to result in
28significant and lasting improvements to the unemployment
29compensation system.

30(3) To pay the costs of collecting the contributions

1deposited into the Service and Infrastructure Improvement Fund
2pursuant to section 301.4(e)(2).

<-3(d) No moneys in the Service and Infrastructure Improvement
4Fund may be expended or obligated for a purpose that would
5result in a violation of the merit staffing requirement of
6section 303(a)(1) of the Social Security Act (49 Stat. 620, 42
7U.S.C. § 503(a)(1)).

<-8(d) Consistent with the merit staffing requirement of
9section 303(a)(1) of the Social Security Act (49 Stat. 620, 42
10U.S.C. §503(a)(1)), no money in the Service and Infrastructure
11Improvement Fund may be expended or obligated to a third party
12to perform unemployment compensation services of the department,
13except for services relating to technology and infrastructure
14components deemed necessary by the secretary under subsection
15(c)(2).

16(e) Any moneys in the Service and Infrastructure Improvement
17Fund that are not expended or obligated as of December 31, 2018,
18shall be transferred to the Unemployment Compensation Fund under
19section 601.

20(f) Moneys in the Service and Infrastructure Improvement
21Fund shall not lapse at any time nor be transferred to any other
22fund except as provided in subsection (e).

23(g) No later than June 30 of each calendar year from 2014
24through 2019 the department shall provide a report to the
25Governor and the General Assembly, through the Secretary-
26Parliamentarian of the Senate and the Chief Clerk of the House
27of Representatives, regarding the Service and Infrastructure
28Improvement Fund, which report shall include an accounting for
29the contributions deposited into the fund, the expenditures and
30transfers from the fund during the prior year and a description

1of the purposes for which expenditures from the fund were made
2in the prior year.

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

5Section 601. Unemployment Compensation Fund.--(a) There is
6hereby created a special fund separate and apart from all public
7moneys or funds of this Commonwealth to be known as the
8Unemployment Compensation Fund. All contributions paid by
9employers and employes, together with penalties and interest
10thereon, received or collected by the department from employers
11under the provisions of this act, except contributions which are 
12to be paid into the Reemployment Fund and the Service and 
13Infrastructure Improvement Fund as provided in section 301.4(e),
14such penalties and interest which are to be paid into the
15Special Administration Fund as provided in section 601.1 and
16taxes collected under section 301.6 of this act which are to be
17paid into the Debt Service Fund as provided in section 601.2,
18shall be paid into the Unemployment Compensation Fund, and shall
19be credited by the department to a ledger account to be known as
20the Employers' Contribution Account. Contributions which are to 
21be paid into the Reemployment Fund and the Service and 
22Infrastructure Improvement Fund as provided in section 301.4(e), 
23interest and penalties which are to be credited to the Special
24Administration Fund and taxes collected under section 301.6 may
25be temporarily held in the Employers' Contribution Account
26solely for clearance purposes prior to transfer to the 
27Reemployment Fund, the Service and Infrastructure Improvement 
28Fund, the Special Administration Fund or the Debt Service Fund
29and while so held in the Employers' Contribution Account shall
30not be deemed a part of the Unemployment Compensation Fund. All

1moneys from time to time received and credited to the Employers'
2Contribution Account (exclusive of refunds made under section
3311, contributions transferred to the Reemployment Fund and the 
4Service and Infrastructure Improvement Fund pursuant to section 
5301.4(e) and interest and penalties transferred as herein
6provided to the Special Administration Fund and taxes
7transferred to the Debt Service Fund) shall be paid promptly by
8the department into the Unemployment Compensation Fund, except
9as otherwise provided in section 605 of this act. All moneys
10credited to this Commonwealth's account in the Unemployment
11Compensation Fund pursuant to section 903 of the Federal Social
12Security Act (42 U.S.C. § 1103) shall be included in the
13Unemployment Compensation Fund.

14* * *

15Section 4. This act shall take effect immediately.