exceed the maximum which may be counted under cl. (A), but excluding that part of the average monthly payment per recipient in excess of $65, increased the average monthly payment to Puerto Rico and the Virgin Islands from $30 to $35, excluded Guam from the provisions which authorize an average monthly payment of $65 and included Guam within the provisions which authorize an average monthly payment of $35, and permitted the counting of individuals with respect to whom expenditures were made as old-age assistance in the form of medical or any other type of remedial care in determining the total number of recipients.

1956 Subsec. (a). Act Aug. 1, 1956, § 301, substituted "during such quarter as old-age assistance in the form of money payments under the State plan" for "during such quarter as old-age assistance under the State plan" in clauses (1) and (2), "who received oldage assistance in the form of money payments for such month" for "who received old-age assistance for such month" in par. (A) of clause (1), and inserted clause (4). Subsec. (a). Act Aug. 1, 1956, § 311 (c), eliminated ", which shall be used exclusively as old-age assistance," following "the Virgin Islands, an amount" in clauses (1) and (2), and substituted "including services which are provided by the staff of the State agency (or of the local agency administering the State plan in the political subdivision) to applicants for and recipients of old-age assistance to help them attain self-care" for "which amount shall be used for paying the costs of administering the State plan or for old-age assistance, or both, and for no other purpose" in clause (3).

Subsec. (a). Act Aug. 1, 1956, § 341, substituted "October 1, 1956" for "October 1, 1952", eliminated ", which shall be used exclusively as old-age assistance," following "the Virgin Islands, an amount", and substituted "$60" for "$55", in clause (1), substituted "the product of $30" for "the product of $25” in par. (A) of clause (1), and “including services which are provided by the staff of the State agency (or of the local agency administering the State plan in the political subdivision) to applicants for and recipients of old-age assistance to help them attain self-care" for "which amount shall be used for paying the costs of administering the State plan or for old-age assistance, or both, and for no other purpose" in clause (3).

1954 Subsec. (b). Act Sept. 1, 1954, § 303 (b), substituted "subsection (a)" for "clause (1) of subsection (a)", wherever appearing, substituted "such subsection" for "such clause" in par. (1), and struck out "increased by five per centum" at the end of par. (3).

Subsec. (b) (1). Act Sept. 1, 1954, § 303 (a), substituted the words "the State's proportionate share" for "onehalf."

1952-Subsec. (a). Act July 18, 1952, increased the Federal share of the State's average monthly payment to four-fifths of the first $25 plus one-half of the remainder within individual maximums of $55, and changed formulas for computing the Federal share of public assistance for Puerto Rico and Virgin Islands.

1950 Subsec. (a). Act Aug. 28, 1950, § 302 (a) changed the basis for computation of the Federal portion of oldage assistance.

1948 Subsec. (a). Act June 14, 1948. substituted $50 for $45 and $20 for $15.

1946 Subsec. (a). Act Aug. 10, 1946, § 501 (a), increased the maximum monthly State expenditure for an individual to which the Federal Government

will contribute from $40 to $45, increased the Federal contribution for assistance from one-half the State's expenditure to two-thirds the State's expenditure up to $15 monthly per individual plus one-half the State's expenditure over $15 and changed the Federal contribution for administration from 5 percent of the Federal contribution for assistance to one-half the State expenditure for administration.

Subsec. (b). Act Aug. 10, 1946, § 501 (b), changed references to clause (1) of subsec. (a) to refer to the entire subsection, substituted "the State's proportionate share" for "one-half" in par. (1) and struck out "increased by 5 per centum" at end of par. (3).

1939-Act Aug. 10, 1939, amended section generally, including the substitution of $40 for $30 in subsec. (a).

EFFECTIVE Date of 1962 AMENDMENT Section 202 (d) of Pub. L. 87-543 provided that: "The amendments made by sections 109 and 132 (other than subsections (d) and (e) thereof) [amending sections 303(a) (1), (2), 606(b), 1203(a) (1), (2) and 1353 (a) (1), (2) of this title] shall be applicable in the case of expenditures, under a State plan approved under title I, IV, X, or XIV of the Social Security Act [subchapter I, IV, X, or XIV of this chapter], as the case may be, made after September 30, 1962."

Section 202(f) of Pub. L. 87-543 provided that: "The amendments made by section 101(a) [amending sections 303 (a) (4), 603 (a) (1)—(3), 1203 (a) (3) and 1353 (a) (3) of this title] shall be applicable in the case of expenditures, under a State plan approved under title I, IV. X, or XIV of the Social Security Act [subchapters I, IV, X, or XIV of this chapter], as the case may be, made after August 31, 1962. The amendments made by section 101(b) [adding sections 303 (a) (5), (c), 603 (a) (4), (c), 1203 (a) (4), (c) and 1353 (a) (4), (e) of this title and amending sections 303 (a) (4), 603 (a) (3), 608(d), 609 (b), 1203(a)(3) and 1353 (a)(3) of this title] shall be applicable in the case of expenditures, under a State plan approved under title I, IV, X, or XIV of the Social Security Act [subchapters I, IV, X, or XIV of this chapter], as the case may be, made after June 30, 1963."

EFFECTIVE DATE OF 1961 AMENDMENTS

Section 303 (e) of Pub. L. 87-64, as amended by Pub. L. 87-543, title I, §132(e), July 25, 1962, 76 Stat. 196, provided that: "The amendments made by subsections (a), (b), and (c) of this section [to subsec. (a) of this section and sections 1203 (a) and 1353 (a) of this title] shall apply only in the case of expenditures made after September 30, 1961, and before October 1, 1962, under a State plan approved under title I, X, or XIV, as the case may be, of the Social Security Act [subchapters I, X or XIV of this chapter]."

Section 5(c) of Pub. L. 87-31 provided that: "The amendments made by subsections (a) and (b) [to subsecs. (a) (1) (C) and (a) (2) (B) of this section] shall apply in the case of expenditures made after June 30, 1961, under a State plan approved under title I of the Social Security Act [this subchapter]."

EFFECTIVE DATE OF 1960 AMENDMENT Amendment of subsecs. (a) and (b) (2) (B) of this section by Pub. L. 86-778 effective Oct. 1, 1960, see section 604 of Pub. L. 86-778, set out as a note under section 301 of this title.

EFFECTIVE DATE OF 1958 AMENDMENT Section 512 of Pub. L. 85-840 provided that:

"Notwithstanding the provisions of sections 305 and 345 of the Social Security Amendments of 1956, as amended [set out as note under this section], the amendments made by sections 501, 502, 503, 504, 505, and 506 [to subsec. (a) of this section and sections 603 (a), 1203 (a), 1301 (a) (1), (8) and 1353 (a) of this title] shall be effective

"(1) in the case of money payments, under a State plan approved under title I, IV, X, or XIV of the Social Security Act, for months after September 1958, and

"(2) in the case of assistance in the form of medical or any other type of remedial care, under such a plan, with respect to expenditures made after September 1958. The amendment made by section 506 [to section 1301 (a) (1) of this title] shall also become effective, for purposes of title V of the Social Security Act [subchapter V of this chapter], for fiscal years ending after June 30, 1959. The amendments made by section 507 [to section 1308 of this title] shall be effective for fiscal years ending after June 30, 1958. The amendment made by section 508 [to section 1304 of this title] shall be effective for fiscal years ending after June 30, 1959. The amendment made by section 510 shall become effective October 1, 1958."

EFFECTIVE AND TERMINATION DATE OF 1956 AMENDMENT Section 345 of part V of title III of act Aug. 1, 1956, provided that: "The amendments made by this part [by sections 341-344 of act Aug. 1, 1956, to sections 303 (a). 603 (a), 1203 (a), and 1353 (a) of this title] shall be

effective for the period beginning October 1, 1956, and ending with the close of June 30, 1959, and after such amendments cease to be in effect any provision of law amended thereby shall be in full force and effect as though this part had not been enacted."

EFFECTIVE DATE OF 1956 AMENDMENT

Section 305 of part I of title III of act Aug. 1, 1956, as amended by Pub. L. 85-110, July 17, 1957, 71 Stat. 308, provided that:

"(a) Except as provided in subsection (b), the amendments made by this part [to subsec. (a) of this section and sections 603 (a), 1203 (a) and 1353 (a) of this title] shall become effective July 1, 1957.

"(b) The amendments made by any section of this part shall not apply to any State (as defined in section 1101 of the Social Security Act [section 1301 of this title] for purposes of title I thereof [subchapter I of this chapter]) for any fiscal year for which there is in effect an election by it not to have the amendments made by such section apply to it. Any such election shall be in effect for a fiscal year only if notice of the election has been filed with the Secretary of Health, Education, and Welfare at some time prior to May 16 of the preceding fiscal year, except that any such election shall be in effect for the fiscal year beginning July 1, 1957, if notice of the election is filed with the Secretary prior to August 1, 1957. An election by a State under this subsection shall continue in effect until the close of any fiscal year designated in a notice of termination of such election which is filed with the Secretary of Health, Education, and Welfare prior to May 16 of such year. Elections hereunder shall be made, and notices thereof and notices of termination shall be filled, on such form or forms and in such manner as the Secretary of Health, Education, and Welfare may prescribe."

EFFECTIVE AND TERMINATION DATE OF 1952 AMENDMENT Section 8 (e) of act July 18, 1952, as amended by act Sept. 1, 1954, § 301, provided that: "The amendments made by this section [to sections 303 (a), 603 (a), 1203 (a), and 1353 (a) of this title] shall be effective for the period beginning October 1, 1952, and ending with the close of September 30, 1956, and after such amendments cease to be in effect any provision of law amended thereby shall be in full force and effect as though this Act [July 18, 1952] had not been enacted." See, also, effective and termination date note above.

EFFECTIVE DATE OF 1950 AMENDMENT Section 302 (a) of act Aug. 28, 1950, provided that the amendment of subsection (a) shall take effect as of Oct. 1, 1950.

EFFECTIVE DATE OF 1948 AMENDMENT

Section 3 (d) of act June 14, 1948, provided that the amendment of subsec. (a) of this section by section 3 (a) of act June 14, 1948, shall become effective on Oct. 1, 1948.

TERMINATION DATE OF 1946 AMENDMENTS Section 504 of act Aug. 10, 1946, as amended by act Aug. 6, 1947, ch. 510, §3, 61 Stat. 794, provided that amendments to this section and sections 603 and 1203 of this title by sections 501, 502, and 503 of that act shall be effective with respect to the period commencing Oct. 1, 1946, and ending on June 30, 1950.

EFFECTIVE DATE OF 1939 AMENDMENT Amendment of section by act Aug. 10, 1939, was made effective Jan. 1, 1940, by section 102 of act Aug. 10, 1939.

TRANSFER OF FUNCTIONS

All functions of the Federal Security Administrator were transferred to the Secretary of Health, Education, and Welfare and all agencies of the Federal Security Agency were transferred to the Department of Health, Education, and Welfare by section 5 of the 1953 Reorg. Plan No. 1, set out as a note under section 623 of Title 5, Executive Departments and Government Officers and Employees. The Federal Security Agency and the office of Administrator were abolished by section 8 of 1953 Reorg. Plan No. 1.

"Administrator" was substituted for "Board," and "he", "him", or "his" or "it" or "its" wherever appearing by act Aug. 28, 1950, § 361 (c), (d).

Identical changes were effected by 1946 Reorg. Plan No. 2, § 4. See note under section 902 of this title.

Division of Disbursement and certain other offices and agencies and their functions were consolidated into Fiscal Service of Treasury Department by 1940 Reorg. Plan No. III, § 1 (a), set out in note under section 133t of Title 5, Executive Departments and Government Officers and Employees.

ADVISORY COUNCIL ON PUBLIC ASSISTANCE

Section 704 of Pub. L. 85-840 established an Advisory Council on Public Assistance for the purpose of reviewing the status of the public assistance program in relation to the old-age, survivors, and disability insurance program, the fiscal capacities of the States and the Federal Government, and any other factors bearing on the amount and proportion of the Federal and State shares in the public assistance program. The Council was directed to make a report of its findings and recommendations to the Secretary and the Congress, not later than January 1, 1960, after which date such Council ceased to exist.

ELECTION OF PAYMENTS UNDER COMBINED STATE PLAN RATHER THAN SEPARATE PLANS

Payments to States under combined State plan under subchapter XVI of this chapter as precluding payment under State plan conforming to this subchapter, see section 141(b) of Pub. L. 87-543, set out as a note under section 1383 of this title.

CROSS REFERENCES

Navajo and Hopi Indians, additional Federal contributions in connection with rehabilitation program, see section 639 of Title 25, Indians.

§ 304. Stopping payment on deviation from required provisions of plan or failure to comply therewith. In the case of any State plan which has been approved under this subchapter by the Secretary of Health, Education, and Welfare, if the Secretary, after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of such plan, finds

(1) that the plan has been so changed as to impose any age, residence, or citizenship requirement prohibited by section 302 (b) of this title, or that in the administration of the plan any such prohibited requirement is imposed, with the knowledge of such State agency, in a substantial number of cases; or

(2) that in the administration of the plan there is a failure to comply substantially with any provision required by section 302 (a) of this title to be included in the plan;

the Secretary of Health, Education, and Welfare shall notify such State agency that further payments will not be made to the State until the Secretary is satisfied that such prohibited requirement is no longer so imposed, and that there is no longer any such failure to comply. Until he is so satisfied he shall make no further certification to the Secretary of the Treasury with respect to such State. (Aug. 14, 1935, ch. 531, title I, § 4, 49 Stat. 622; 1946 Reorg. Plan No. 2, § 4, eff. July 16, 1946, 11 F. R. 7873, 60 Stat. 1095; Aug. 28, 1950, ch. 809, title III, pt. 6, § 361 (c), (d), 64 Stat. 558; 1953 Reorg. Plan No. 1, §§ 5, 8, eff. Apr. 11, 1953, 18 F. R. 2053, 67 Stat. 631; Sept. 13, 1960, Pub. L. 86-778, title VI, § 601(e), 74 Stat. 991.)

AMENDMENTS 1960-Pub. L. 86-778 substituted "State plan which has been approved under this subchapter" for "State plan for old-age assistance which has been approved."

EFFECTIVE DATE OF 1960 AMENDMENT Amendment of section by Pub. L. 86-778 effective Oct. 1, 1960, see section 604 of Pub. L. 86-778, set out as a note under section 301 of this title.

TRANSFER OF FUNCTIONS

All functions of the Federal Security Administrator were transferred to the Secretary of Health, Education, and Welfare and all agencies of the Federal Security Agency were transferred to the Department of Health, Education, and Welfare by section 5 of 1953 Reorg. Plan No. 1, set out as a note under section 623 of Title 5, Executive Departments and Government Officers and Employees. The Federal Security Agency and the office of Administrator were abolished by section 8 of 1953 Reorg. Plan No. 1.

"Administrator" was substituted for "Board", and "he", "him", or "his" for "it" or "its" wherever appearing by act Aug. 28, 1950.

Identical changes were effected by 1946 Reorg. Plan. No. 2. See note under section 902 of this title.

§ 305. Appropriation.

CODIFICATION

Section, act Aug. 14, 1935, ch. 531, Title I, § 5, 49 Stat. 622, made an appropriation for the fiscal year ending June 30, 1936.

$306. Definitions.

(a) For the purposes of this subchapter, the term "old-age assistance" means money payments to, or (if provided in or after the third month before the month in which the recipient makes application for assistance) medical care in behalf of or any type of remedial care recognized under State law in behalf of, needy individuals who are sixty-five years of age or older, but does not include

(1) any such payments to or care in behalf of any individual who is an inmate of a public institution (except as a patient in a medical institution) or any individual who is a patient in an institution for tuberculosis or mental diseases, or (2) any such payments to any individual who has been diagnosed as having tuberculosis or psychosis and is a patient in a medical institution as a result thereof, or

(3) any such care in behalf of any individual, who is a patient in a medical institution as a result of a diagnosis that he has tuberculosis or psychosis, with respect to any period after the individual has been a patient in such an institution, as a result of such diagnosis, for forty-two days.

(b) For purposes of this subchapter, the term "medical assistance for the aged" means payment of part or all of the cost of the following care and services (if provided in or after the third month before the month in which the recipient makes application for assistance) for individuals sixty-five years of age or older who are not recipients of old-age assistance but whose income and resources are insufficient to meet all of such cost

(1) inpatient hospital services;

(2) skilled nursing-home services;

(3) physicians' services;

(4) outpatient hospital or clinic services;

(5) home health care services;

(6) private duty nursing services;

(7) physical therapy and related services;
(8) dental services;

(9) laboratory and X-ray services;

(10) prescribed drugs, eyeglasses, dentures, and prosthetic devices;

(11) diagnostic, screening, and preventive services; and

(12) any other medical care or remedial care recognized under State law;

except that such term does not include any such payments with respect to

(A) care or services for any individual who is an inmate of a public institution (except as a patient in a medical institution) or any individual who is a patient in an institution for tuberculosis or mental diseases; or

(B) care or services for any individual, who is a patient in a medical institution as a result of a diagnosis of tuberculosis or psychosis, with respect to any period after the individual has been a patient in such an institution, as a result of such diagnosis, for forty-two days.

(c) For purposes of this subchapter, the term "Federal medical percentage" for any State shall be 100 per centum less the State percentage; and the State percentage shall be that percentage which bears the same ratio to 50 per centum as the square of the per capita income of such State bears to the square of the per capita income of the continental United States (including Alaska) and Hawaii; except that (i) the Federal medical percentage shall in no case be less than 50 per centum or more than 80 per centum, and (ii) the Federal medical percentage for Puerto Rico, the Virgin Islands, and Guam shall be 50 per centum. The Federal medical percentage for any State shall be determined and promulgated in accordance with the provisions of subparagraph (B) of section 1301 (a) (8) of this title (other than the proviso at the end thereof); except that the Secretary shall, as soon as possible after September 13, 1960, determine and promulgate the Federal medical percentage for each State

(1) for the period beginning October 1, 1960, and ending with the close of June 30, 1961, which promulgation shall be based on the same data with respect to per capita income as the data used by the Secretary in promulgating the Federal percentage (under section 1301(a) (8) of this title) for such State for the fiscal year ending June 30, 1961 (which promulgation of the Federal medical percentage shall be conclusive for such period), and

(2) for the period beginning July 1, 1961, and ending with the close of June 30, 1963, which promulgation shall be based on the same data with respect to per capita income as the data used by the Secretary in promulgating the Federal percentage (under section 1301 (a) (8) of this title) for such State for such period (which promulgation of the Federal medical percentage shall be conclusive for such period).

(Aug. 14, 1935, ch. 531, title I, § 6, 49 Stat. 622; Aug. 10, 1939, ch. 666, title I, § 103, 53 Stat. 1362; Aug. 28, 1950, ch. 809, title III, pt. 1, § 303 (a), 64 Stat. 549; Sept. 13, 1960, Pub. L. 86-778, title VI, § 601(f), 74

Stat. 991; July 25, 1962, Pub. L. 87-543, title I, $156 (a), 76 Stat. 207.)

AMENDMENTS

1962 Subsec. (a). Pub. L. 87-543, § 156 (a) (1), inserted "(if provided in or after the third month before the month in which the recipient makes application for assistance)" preceding "medical care."

Subsec. (b). Pub. L. 87-543, § 156(a)(2), inserted "(if provided in or after the third month before the month in which the recipient makes application for assistance)" following "care and services."

1960 Subsec. (a). Pub. L. 86-778, § 601 (f) (1), (2), designated existing provisions as subsec. (a), and inserted provisions therein excluding from the definition "old-age assistance" any care in behalf of any individual, who is a patient in a medical institution as a result of a diagnosis that he has tuberculosis or psychosis, with respect to any period after the individual has been a patient in an institution, as a result of such diagnosis, for forty-two days.

Subsecs. (b), (c). Pub. L. 86-778, § 601(f) (2), added subsecs. (b) and (c).

1950-Act Aug. 28, 1950, redefined "old-age assistance". 1939-Act Aug. 10, 1939, inserted "needy" preceding "individuals who".

EFFECTIVE DATE OF 1962 AMENDMENT

Section 156(e) of Pub. L. 87-543 provided that: "The amendments made by this section [to sections 306 (a), (b), 606(b), 1206 and 1355 of this title] shall apply in the case of applications made after September 30, 1962, under a State plan approved under title I, IV, X, or XIV of the Social Security Act [subchapter I, IV, X, or XIV of this chapter]."

EFFECTIVE DATE OF 1960 AMENDMENT Amendment of section by Pub. L. 86-778 effective Oct. 1, 1960, see section 604 of Pub. L. 88-778, set out as a note under section 301 of this title.

EFFECTIVE DATE OF 1950 AMENDMENT

Section 303 (b) of act Aug. 28, 1950, provided that: "The amendment made by subsection (a) [to this section] shall take effect October 1, 1950, except that the exclusion of money payments to needy individuals described in clause (a) or (b) of section 6 of the Social Security Act as so amended [clauses (a) or (b) of this section] shall, in the case of any of such individuals who are not patients in a public institution, be effective July 1, 1952."

SUBCHAPTER II.-FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE BENEFITS

AMENDMENTS

1956-Act Aug. 1, 1956, ch. 836, title I, § 103 (1), 70 Stat. 824, included disability insurance benefits in subchapter heading.

§ 401. Federal old-age and survivors insurance trust fund and Federal disability insurance trust fund. (a) There is created on the books of the Treasury of the United States a trust fund to be known as the "Federal Old-Age and Survivors Insurance Trust Fund." The Federal Old-Age and Survivors Insurance Trust Fund shall consist of the securities held by the Secretary of the Treasury for the Old-Age Reserve Account and the amount standing to the credit of the Old-Age Reserve Acccunt on the books of the Treasury on January 1, 1940, which securities and amount the Secretary of the Treasury is authorized and directed to transfer to the Federal Old-Age and Survivors Insurance Trust Fund, and, in addition, such amounts as may be appropriated to, or deposited in, the Federal Old-Age and Survivors Insurance Trust Fund as hereinafter provided. There is appropriated to the Federal Old-Age and

Survivors Insurance Trust Fund for the fiscal year ending June 30, 1941, and for each fiscal year thereafter, out of any moneys in the Treasury not otherwise appropriated, amounts equivalent to 100 per centum of

(1) the taxes (including interest, penalties, and additions to the taxes) received under subchapter A of chapter 9 of Title 26, Internal Revenue Code of 1939, (and covered into the Treasury) which are deposited into the Treasury by collectors of internal revenue before January 1, 1951; and

(2) the taxes certified each month by the Commissioner of Internal Revenue as taxes received under subchapter A of chapter 9 of Title 26, Internal Revenue Code of 1939 which are deposited into the Treasury by collectors of internal revenue after December 31, 1950, and before January 1, 1953, with respect to assessments of such taxes made before January 1, 1951; and

(3) the taxes imposed by subchapter A of chapter 9 of Title 26, Internal Revenue Code of 1939 with respect to wages (as defined in section 1426 of Title 26, Internal Revenue Code of 1939), and by chapter 21 of Title 26, Internal Revenue Code of 1954 with respect to wages (as defined in section 3121 of Title 26, Internal Revenue Code of 1954), reported to the Commissioner of Internal Revenue pursuant to section 1420 (c) of Title 26, Internal Revenue Code of 1939, after December 31, 1950, or to the Secretary of the Treasury or his delegates pursuant to subtitle F of Title 26, Internal Revenue Code of 1954, after December 31, 1954, as determined by the Secretary of the Treasury by applying the applicable rates of tax under such subchapter or chapter 21 to such wages, which wages shall be certified by the Secretary of Health, Education, and Welfare on the basis of the records of wages established and maintained by such Secretary in accordance with such reports, less the amounts specified in clause (1) of subsection (b) of this section; and

(4) the taxes imposed by subchapter E of chapter 1 of Title 26, Internal Revenue Code of 1939, with respect to self-employment income (as defined in section 481 of Title 26, Internal Revenue Code of 1939), and by chapter 2 of Title 26, Internal Revenue Code of 1954, with respect to self-employment income (as defined in section 1402 of Title 26, Internal Revenue Code of 1954) reported to the Commissioner of Internal Revenue on tax returns under such subchapter or to the Secretary of the Treasury or his delegate on tax returns under subtitle F of Title 26, Internal Revenue Code of 1954, as determined by the Secretary of the Treasury by applying the applicable rate of tax under such subchapter or chapter to such self-employment income, which selfemployment income shall be certified by the Secretary of Health, Education, and Welfare on the basis of the records of self-employment income established and maintained by the Secretary of Health, Education, and Welfare in accordance with such returns, less the amounts specified in clause (2) of subsection (b) of this section.

The amounts appropriated by clauses (3) and (4) of this subsection shall be transferred from time to time from the general fund in the Treasury to the Federal Old-Age and Survivors Insurance Trust Fund, and the amounts appropriated by clauses (1) and (2) of subsection (b) of this section shall be transferred from time to time from the general fund in the Treasury to the Federal Disability Insurance Trust Fund, such amounts to be determined on the basis of estimates by the Secretary of the Treasury of the taxes, specified in clauses (3) and (4) of this subsection, paid to or deposited into the Treasury; and proper adjustments shall be made in amounts subsequently transferred to the extent prior estimates were in excess of or were less than the taxes specified in such clauses (3) and (4) of this subsection.

(b) There is created on the books of the Treasury of the United States a trust fund to be known as the "Federal Disability Insurance Trust Fund". The Federal Disability Insurance Trust Fund shall consist of such amounts as may be appropriated to, or deposited in, such fund as provided in this section. There is appropriated to the Federal Disability Insurance Trust Fund for the fiscal year ending June 30, 1957, and for each fiscal year thereafter, out of any moneys in the Treasury not otherwise appropriated, amounts equivalent to 100 per centum of

(1) one-half of 1 per centum of the wages (as defined in section 3121 of Title 26, Internal Revenue Code of 1954) paid after December 31, 1956, and reported to the Secretary of the Treasury or his delegate pursuant to subtitle F of Title 26, Internal Revenue Code of 1954, which wages shall be certified by the Secretary of Health, Education, and Welfare on the basis of the records of wages established and maintained by such Secretary in accordance with such reports; and

(2) three-eighths of 1 per centum of the amount of self-employment income (as defined in section 1402 of Title 26, Internal Revenue Code of 1954) reported to the Secretary of the Treasury or his delegate on tax returns under subtitle F of Title 26, Internal Revenue Code of 1954 for any taxable year beginning after December 31, 1956, which self-employment income shall be certified by the Secretary of Health, Education, and Welfare on the basis of the records of self-employment income established and maintained by the Secretary of Health, Education, and Welfare in accordance with such returns. (c) With respect to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund (hereinafter in this subchapter called the "Trust Funds") there is created a body to be known as the Board of Trustees of the Trust Funds (hereinafter in this subchapter called the "Board of Trustees") which Board of Trustees shall be composed of the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health, Education, and Welfare, all ex officio. The Secretary of the Treasury shall be the Managing Trustee of the Board of Trustees (hereinafter in this subchapter called the "Managing Trustee"). The Commissioner of Social Security shall serve as Secretary of the Board of Trustees. The Board of

Trustees shall meet not less frequently than once each six months. It shall be the duty of the Board of Trustees to

(1) Hold the Trust Funds;

(2) Report to the Congress not later than the first day of March of each year on the operation and status of the Trust Funds during the preceding fiscal year and on their expected operation and status during the next ensuing five fiscal years;

(3) Report immediately to the Congress whenever the Board of Trustees is of the opinion that the amount of either of the Trust Funds is unduly small;

(4) Recommend improvements in administrative procedures and policies designed to effectuate the proper coordination of the old-age and survivors insurance and Federal-State unemployment compensation program; and

(5) Review the general policies followed in managing the Trust Funds, and recommend changes in such policies, including necessary changes in the provisions of the law which govern the way in which the Trust Funds are to be managed.

The report provided for in paragraph (2) of this subsection shall include a statement of the assets of, and the disbursements made from, the Trust Funds during the preceding fiscal year, an estimate of the expected future income to, and disbursements to be made from, the Trust Funds during each of the next ensuing five fiscal years, and a statement of the actuarial status of the Trust Funds. Such report shall be printed as a House document of the session of the Congress to which the report is made. (d) It shall be the duty of the Managing Trustee to invest such portion of the Trust Funds as is not, in his judgment, required to meet current withdrawals. Such investments may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. For such purpose such obligations may be acquired (1) on original issue at the issue price, or (2) by purchase of outstanding obligations at the market price. The purposes for which obligations of the United States may be issued under the Second Liberty Bond Act, as amended, are extended to authorize the issuance at par of public-debt obligation for purchase by the Trust Funds. Such obligations issued for purchase by the Trust Funds shall have maturities fixed with due regard for the needs of the Trust Funds and shall bear interest at a rate equal to the average market yield (computed by the Managing Trustee on the basis of market quotations as of the end of the calendar month next preceding the date of such issue) on all marketable interest-bearing obligations of the United States then forming a part of the public debt which are not due or callable until after the expiration of four years from the end of such calendar month; except that where such average market yield is not a multiple of one-eighth of 1 per centum, the rate of interest of such obligations shall be the multiple of one-eighth of 1 per