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ministrative financing -Continued

B. Unemployment Trust Fund-Continued

Receipts from the net Federal unemployment tax (0.3 percent) are used to pay the cost of administering Federal and State operations of the employment security program. At the end of each fiscal year,

after Federal and State administrative expenses have been paid, any excess net Federal unemployment tax receipts are earmarked and placed in the Federal unemployment account to maintain a balance of $200,000,000 in that account. This account is used to make advances to the States with depleted reserve accounts. Any excess receipts not required to maintain the $200,000,000 balance in the Federal unemployment account is allocated to the trust accounts of the various States in the proportion that their covered payrolls bear to the aggregate of all the States. These excess receipts may, under certain conditions, be used by a State to supplement Federal grants in financing administrative operations.

A new account, called the employment security administration account, will be established in the Unemployment Trust Fund. All receipts from the net Federal unemployment tax (0.4 percent) will be credited initially to this new account. Federal and State administrative expenses will be paid out of this account with a maximum of $350,000,000 per year allowable for State administrative expenses.

the

At the end of a fiscal year, excess receipts after administrative expenses will be credited to Federal unemployment account to build up and maintain a maximum balance of $550,000,000 or 0.4 percent of covered payrolls, whichever is greater, for use in making advances to States.

After the Federal unemployment account reaches its statutory limit, any remaining excess of net Federal unemployment taxes over administrative expenses will be retained in the employment security administration account until that account shows a net balance at the close of the fiscal year of $250,000,000. This net balance is to be used to provide funds out of which administrative expenses may be paid during each fiscal year prior to the receipt of the bulk of Federal unemployment taxes in January and February.

Pending the building up of the $250,000,000 balance in the employment security administration account, advances to the account are authorized from a revolving fund which would be financed by a continuing appropriation from the general fund of the Treasury. These advances will be repaid with interest. After the Federal unemployment account is built up to its statutory limit, and the yearend net balance of the employment security administration account reaches $250,000,000, and after any advances from the general fund of the Treasury have been repaid, any excess in the employment security administration account will be distributed to the accounts of the various States in the same manner as is provided under present law, except that if any State has outstanding advances from the Federal unemployment account its share of the surplus funds will be used to reduce these outstanding advances. Effective date: Fiscal year 1961.

Bill: Sec. 521.

House report, pp. 51-53, 108, 116.

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A State's eligibility for advances (applied for after enactment) may be determined at any time. Advances will be made only if in the account of the State requesting an advance the sum of reserves on hand plus expected tax receipts will be inadequate to meet the expected level of benefit payments during the current or following month. Bill: Sec. 522(a).

House report, pp. 53-54, 116-117.
Advances will be made in amounts which the
Secretary of Labor estimates will be re-
quired to pay compensation during the cur-
rent or following month, including amounts
to cover unexpected contingencies. The
aggregate amount of loans approved by the
Secretary of Labor may not exceed the
amount available for advances in the Fed-
eral unemployment account.
Bill: Sec. 522(a).

House report, pp. 53-54, 116-117.
Same as present law.

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C. Advances to the States-Continued

3. Repayment of
advances-Con.

If an advance to any State has been outstanding at the beginning of four consecutive years, the employers' credit in that State against the Federal tax is reduced from 2.7% to 2.55%. This increase in the net Federal tax is used to pay off the advance. During successive years in which the advance is outstanding the employers' credit is reduced by an additional 0.15% a year. If a State repays outstanding advances by Dec. 1 of any year the reduced credit provisions do not come into operation for that year.

If an advance to any State made after enactment is outstanding at the beginning of two consecutive years, the employers' credit in that State against the Federal tax is reduced from 2.7% to 2.4%. During successive years in which the advance is outstanding the employers' credit is reduced by an additional 0.3% a year. If a State repays outstanding advances by Nov. 10 of any year the reduced credit provisions do not come into operation for that year.

In addition to the reduction of 0.3% a year in the employers' tax credit against the Federal tax two other possible credit reductions are provided. The first provides that beginning in the third year in which an advance is outstanding the maximum employers' credit is reduced by the amount, if any, by which the average employer contribution rate in the preceding year was less than 2.7%. The second credit reduction provides that in the fifth year in which an advance is outstanding if the State's benefit-cost rate over the preceding five years is higher than 2.7% then the employers' credit shall be reduced by the amount, if any, by which the State's average contribution rate in the preceding year is less than such benefit-cost rate.

Bill: Sec. 522(a), 523(b).

House report, pp. 54-55, 118-124.

TABLES ON PUBLIC ASSISTANCE MEDICAL PROGRAMS

TABLE 1.-Summary information on medical care available to old-age assistance recipients through federally aided public assistance vendor payments, and other resources (based on information supplied by Bureau of Public Assistance, June 1960)

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District of Columbia.

Yes.

Yes.

All essential surgical

No 3.

No..

Yes

and medical care

and treatment.

No limitation on

number of days.

Florida

Yes.

No..

Limited to acute injuries and illness. Maximum: 30 days a year.

Yes.

No.

No.

Georgia.

No. No....

No.

No.

No.

No..

1 Applicable only if surgery is authorized by remedial eye services section for cooperating ophthalmologist.

Some drugs provided by vendor payment when dispensed by hospital
for continuation of treatment after discharge of a patient who has received
inpatient care for the same condition.

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Vendor payments may be made for drugs, appliances, dental services, and optical supplies recommended by physician, hospital, or clinic when such are not available without cost to the agency through other services.

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