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
 

1amended to read:

2Section 301.4. Contributions by Employes.--(a)
3Notwithstanding any other provision of this act, each employe
4shall pay contributions at a rate of zero per centum (0.0%) for
5calendar year 1989 and at a rate as set forth in section 301.7
6for each calendar year thereafter of all wages paid for
7"employment" as defined by the act without regard to the
8limitation specified in section 4(x)(1) of this act.

9(b) Each employer subject to this act shall be responsible
10for withholding and shall withhold, in trust, such contributions
11from the wages of his employes at the time such wages are paid,
12and shall report and transmit such deductions to the department
13for deposit into the Unemployment Compensation Fund [and], the 
14Reemployment Fund and the Service and Infrastructure Improvement 
15Fund pursuant to the allocation prescribed in subsection (e), in
16accordance with rules and procedures established by the
17department.

18(c) Any employer who is an individual, or any officer or
19agent of any employer, who violates the trust provision of this
20section, fails to withhold, hold in trust or fails to transmit
21to the department all contributions withheld from the wages of
22his employes in accordance with the rules and procedure
23established by the department shall be subject to the provisions
24of clause (2) of subsection (a) of section 301 and sections 308,
25308.1, 308.2, 308.3 and 309 of this act.

26(d) This section shall not be deemed to affect or impair the
27operation of any State statute or ordinance or resolution of a
28political subdivision which levies or collects any wage tax or
29similar tax. Contributions made pursuant to this section are not
30intended to reduce or otherwise affect any tax on wages or

1similar tax.

2(e) Contributions paid under this section shall be allocated
3by the department [between] among the Unemployment Compensation
4Fund [and], the Reemployment Fund and the Service and 
5Infrastructure Improvement Fund as follows:

6(1) [Ninety-five per centum (95%)] Five per centum (5%) of
7the contributions on wages paid from January 1, 2013, through
8September 30, 2017, shall be deposited into the [Unemployment
9Compensation Fund and five per centum (5%) of such contributions
10shall be deposited into the] Reemployment Fund to the extent the
11contributions are paid on or before December 31, 2017.

12(2) [One hundred per centum (100%) of the contributions on
13wages paid from January 1, 2013, through September 30, 2017,
14shall be deposited into the Unemployment Compensation Fund to
15the extent the contributions are paid on or after January 1,
162018.] During each calendar year from 2013 through 2016 an 
17amount determined by the secretary with the approval of the 
18Governor shall be deposited into the Service and Infrastructure 
19Improvement Fund. For calendar year 2013, the amount determined 
20under this clause may not exceed forty million dollars 
21($40,000,000). For calendar year 2014, the amount determined 
22under this clause may not exceed thirty million dollars 
23($30,000,000). For calendar years 2015 and 2016, the amount 
24determined under this clause for each calendar year may not 
25exceed one hundred ninety million dollars ($190,000,000) 
26adjusted by the increase in the Bureau of Labor Statistics 
27Consumer Price Index for the period from May 2013 through 
28January of the calendar year less the amount of Federal 
29administrative funding for the preceding Federal fiscal year.

30(3) [One hundred per centum (100%) of the contributions on

1wages paid on or after October 1, 2017, shall be deposited into
2the Unemployment Compensation Fund.] The remaining contributions 
3shall be deposited into the Unemployment Compensation Fund.

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

7Section 2. The act is amended by adding a section to read:

8Section 301.9. Service and Infrastructure Improvement
9Fund.--(a) There is established a restricted account in the
10State Treasury to be known as the Service and Infrastructure
11Improvement Fund.

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

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

19(1) To improve the quality, efficiency and timeliness of
20services provided by the service center system to individuals
21claiming compensation under this act, including claim filing,
22claim administration, adjudication services and staffing and
23training of system employes.

24(2) Expenditures for information management technology,
25communications technology and other infrastructure components
26that<-, in the judgment of the secretary, <-the secretary determines
27are likely to result in significant and lasting improvements to
28the unemployment compensation system.

29(3) To pay the costs of collecting the contributions
30deposited into the Service and Infrastructure Improvement Fund

1pursuant to section 301.4(e)(2).

2(d) <-No <-Consistent with the merit staffing requirement of
3section 303(a)(1) of the Social Security Act (49 Stat. 620, 42
4U.S.C. § 503(a)(1)), no moneys in the Service and Infrastructure
5Improvement Fund may be expended or obligated to a third party
6to perform unemployment compensation services of the department,
7except services relating to technology and infrastructure
8components deemed necessary by the secretary under subsection
9(c)(2).

10(e) Any moneys in the Service and Infrastructure Improvement
11Fund that are not expended or obligated as of December 31, 2018,
12shall be transferred to the Unemployment Compensation Fund under
13section 601.

14(f) Moneys in the Service and Infrastructure Improvement
15Fund shall not lapse at any time nor be transferred to any other
16fund except as provided in subsection (e).

17(g) No later than June 30 of each calendar year from 2014
18through 2019 the department shall provide a report to the
19Governor and the General Assembly<-, through the Secretary-
20Parliamentarian of the Senate and the Chief Clerk of the House 
21of Representatives, regarding the Service and Infrastructure
22Improvement Fund, which report shall include an accounting for
23the contributions deposited into the fund, the expenditures and
24transfers from the fund during the prior year and a description
25of the purposes for which expenditures from the fund were made
26in the prior year.

27Section 3. Section 601(a) of the act, amended June 12, 2012
28(P.L.577, No.60), is amended to read:

29Section 601. Unemployment Compensation Fund.--(a) There is
30hereby created a special fund separate and apart from all public

1moneys or funds of this Commonwealth to be known as the
2Unemployment Compensation Fund. All contributions paid by
3employers and employes, together with penalties and interest
4thereon, received or collected by the department from employers
5under the provisions of this act, except contributions which are 
6to be paid into the Reemployment Fund and the Service and 
7Infrastructure Improvement Fund as provided in section 301.4(e),
8such penalties and interest which are to be paid into the
9Special Administration Fund as provided in section 601.1 and
10taxes collected under section 301.6 of this act which are to be
11paid into the Debt Service Fund as provided in section 601.2,
12shall be paid into the Unemployment Compensation Fund, and shall
13be credited by the department to a ledger account to be known as
14the Employers' Contribution Account. Contributions which are to 
15be paid into the Reemployment Fund and the Service and 
16Infrastructure Improvement Fund as provided in section 301.4(e), 
17interest and penalties which are to be credited to the Special
18Administration Fund and taxes collected under section 301.6 may
19be temporarily held in the Employers' Contribution Account
20solely for clearance purposes prior to transfer to the 
21Reemployment Fund, the Service and Infrastructure Improvement 
22Fund, the Special Administration Fund or the Debt Service Fund
23and while so held in the Employers' Contribution Account shall
24not be deemed a part of the Unemployment Compensation Fund. All
25moneys from time to time received and credited to the Employers'
26Contribution Account (exclusive of refunds made under section
27311, contributions transferred to the Reemployment Fund and the 
28Service and Infrastructure Improvement Fund pursuant to section 
29301.4(e) and interest and penalties transferred as herein
30provided to the Special Administration Fund and taxes

1transferred to the Debt Service Fund) shall be paid promptly by
2the department into the Unemployment Compensation Fund, except
3as otherwise provided in section 605 of this act. All moneys
4credited to this Commonwealth's account in the Unemployment
5Compensation Fund pursuant to section 903 of the Federal Social
6Security Act (42 U.S.C. § 1103) shall be included in the
7Unemployment Compensation Fund.

8* * *

9Section 4. This act shall take effect immediately.