A bill to amend the Federal Unemployment Tax Act to provide for an additional limitation on the reduction in the credit applicable to employers in certain States which have outstanding loan balances but have a high rate of unemployment.

Amends the Internal Revenue Code to limit the reduction in the credit against the unemployment tax for employers in States which have outstanding loans from the Federal unemployment insurance trust fund and which have a specified rate of unemployment.

Allows such limitation only in States which: (1) have not decreased unemployment tax efforts; (2) have not taken any action to reduce the solvency of unemployment compensation programs; and (3) have an unemployment rate of at least eight percent and 25 percent or more above the national average unemployment rate.