[Revised July 1975] IRC Sec. 3302(d) during such taxable year which are attributable to such State by the percentage (if any) by which— (i) the 5-year benefit cost rate applicable to such State for such taxable year or (if higher) 2.7 percent, exceeds (ii) the average employer contribution rate for such State for the calendar year preceding such taxable year. The provisions of the preceding sentence shall not be applicable with respect to the taxable year beginning January 1, 1975, or any succeeding taxable year which begins before January 1, 1978; and, for purposes of such sentence, January 1, 1978, shall be deemed to be the first January 1 occurring after January 1, 1974, and consecutive taxable years in the period commencing January 1, 1978, shall be determined as if the taxable year which begins on January 1, 1978, were the taxable year immediately succeeding the taxable year which began on January 1, 1974.1 (4) If the Secretary of Labor determines that a State, or State agency, has not (A) entered into the agreement described in section 239 of the Trade Act of 1974, with the Secretary of Labor before July 15, 1975, or (B) fulfilled its commitments under an agreement with the Secretary of Labor as described in section 239 of the Trade Act of 1974, then, in the case of a taxpayer subject to the unemployment compensation law of such State, the total credits (after applying subsections (a) and (b) and paragraphs (1), (2), and (3) of this section) otherwise allowable under this section for a year during which such State or agency does not enter into or fulfill such an agreement shall be reduced by 15 percent of the tax imposed with respect to wages paid by such taxpayer during such year which are attributable to such State.2 (d) DEFINITIONS AND SPECIAL RULES RELATING TO SUBSECTION (c). (1) RATE OF TAX DEEMED TO BE 3 PERCENT.—In applying subsection (c), the tax imposed by section 3301 shall be computed at the rate of 3 percent in lieu of the rate provided by such section. (2) WAGES ATTRIBUTABLE TO A PARTICULAR STATE.-For purposes of subsection (c), wages shall be attributable to a particu 1 This sentence was added to paragraph (3) by Public Law 94-45 subject to the conditions specified in section 110 (b) of such Public Law. Paragraph (4) was amended by Public Law 94-45. IRC Sec. 3302(d) [Revised July 1975] lar State if they are subject to the unemployment compensation law of the State, or (if not subject to the unemployment compensation law of any State) if they are determined (under rules or regulations prescribed by the Secretary or his delegate) to be attributable to such State. (3) ADDITIONAL TAXES INAPPLICABLE WHERE ADVANCES ARE REPAID BEFORE NOVEMBER 10 OF TAXABLE YEAR.-Paragraph (2) or (3) of subsection (c) shall not apply with respect to any State for the taxable year if (as of the beginning of November 10 of such year) there is no balance of advances referred to in such paragraph. (4) AVERAGE EMPLOYER CONTRIBUTION RATE.-For purposes of subparagraphs (B) and (C) of subsection (c) (3), the average employer contribution rate for any State for any calendar year is that percentage obtained by dividing— (A) the total of the contributions paid into the State unemployment fund with respect to such calendar year, by (B) the total of the remuneration subject to contributions under the State unemployment compensation law with respect to such calendar year. For purposes of subparagraph (C) of subsection (c) (3), if the average employer contribution rate for any State for any calendar year (determined without regard to this sentence) equals or exceeds 2.7 percent, such rate shall be determined by increasing the amount taken into account under subparagraph (A) of the preceding sentence by the aggregate amount of employee payments (if any) into the unemployment fund of such State with respect to such calendar year which are to be used solely in the payment of unemployment compensation. (5) 5-YEAR BENEFIT COST RATE.-For purposes of subparagraph (C) of subsection (c) (3), the 5-year benefit cost rate applicable to any State for any taxable year is that percentage obtained by dividing (A) one-fifth of the total of the compensation paid under the State unemployment compensation law during the 5-year period ending at the close of the second calendar year preceding such taxable year, by (B) the total of the remuneration subject to contributions under the State unemployment compensation law with respect to the first calendar year preceding such taxable year. (6) ROUNDING.-If any percentage referred to in either subparagraph (B) or (C) of subsection (c) (3) is not a multiple of .1 percent, it shall be rounded to the nearest multiple of .1 percent. [Revised July 1975] IRC Sec. 3302(d) (7) DETERMINATION AND CERTIFICATION OF PERCENTAGES.-The percentage referred to in subsection (c) (3) (B) or (C) for any taxable year for any State having a balance referred to therein shall be determined by the Secretary of Labor, and shall be certified by him to the Secretary of the Treasury before June 1 of such year, on the basis of a report furnished by such State to the Secretary of Labor before May 1 of such year. Any such State report shall be made as of the close of March 31 of the taxable year, and shall be made on such forms, and shall contain such information, as the Secretary of Labor deems necessary to the performance of his duties under this section. IRC Sec. 3302(e) For reduction of total credits allowable under subsection (c), see section 104 of the Temporary Unemployment Compensation Act of 1958.1 (e) SUCCESSOR EMPLOYER.—Subject to the limits provided by subsection (c), if (1) an employer acquires during any calendar year substantially all the property used in the trade or business of another person, or used in a separate unit of a trade or business of such other person, and immediately after the acquisition employs in his trade or business one or more individuals who immediately prior to the acquisition were employed in the trade or business of such other person, and (2) such other person is not an employer for the calendar year in which the acquisition takes place, then, for the calendar year in which the acquisition takes place, in addition to the credits allowed under subsections (a) and (b), such employer may credit against the tax imposed by section 3301 for such year an amount equal to the credits which (without regard to subsection (c)) would have been allowable to such other person under subsections (a) and (b) and this subsection for such year, if such other person had been an employer, with respect to remuneration subject to 1 Sec. 104 of the Temporary Unemployment Compensation Act of 1958 reads: Repayment Sec. 104. The total credits allowed under section 3302(c) of the Federal Unemployment Tax Act (26 U.S.C. 3302(c)) to taxpayers with respect to wages attributable to a State shall be reduced (1) for the taxable year beginning on January 1, 1963, by 5 percent of the tax imposed by section 3301 of the Federal Unemployment Tax Act, and (2) for any succeeding taxable year, by 10 percent of the tax imposed by said section 3301. unless and until the Secretary of the Treasury finds that before November 10 of the taxable year there have been restored to the Treasury the amounts of temporary unemployment compensation paid in the State under this Act (except amounts paid to individuals who exhausted their unemployment compensation under title XV of the Social Security Act and the title IV of the Veterans' Readjustment Assistance Act of 1952 prior to their making their first claims under this Act), the amount of costs incurred in the administration of this Act with respect to the State, and the amount estimated by the Secretary of Labor as the State's proportionate share of other costs incurred in the administration of this Act. In applying clauses (1) and (2) of the preceding sentence, the tax imposed by section 3303 of the Federal Unemployment Tax Act shall be computed at the rate of 3 percent in lieu of the rate provided by such section. At the request (made before November 1 of the taxable year) of the Governor of any State, the Secretary of Labor shall, as soon as practicable after June 30 or (if later) the date of the receipt of such request, certify to such Governor and to the Secretary of the Treasury the amount he estimates for the taxable year beginning on January 1, 1963, equals .15 percent (and for any succeeding taxable year equals .3 percent) of the total of the remuneration which would have been subject to contribution under the State unemployment compensation law with respect to the calendar year pr ceding such certification if the dollar limit on remuneration subject to contributions under such law were equal to the dollar limit under section 3306 (b) (1) of the Federal Unemployment Tax Act for such calendar year. If, after receiving such certification and before November 10 of the taxable year, the State restores to the general fund of the Treasury the amount so certified (and designates such restoration as being made for purposes of this sentence), the reduction provided by the first sentence of this section shall not apply for such taxable year. IRC Sec. 3303(a) contributions under the unemployment compensation law of a State paid by such other person to the individual or individuals described in paragraph (1). SEC. 3303. CONDITIONS OF ADDITIONAL CREDIT ALLOWANCE. (a) STATE STANDARDS.-A taxpayer shall be allowed an additional credit under section 3302(b) with respect to any reduced rate of contributions permitted by a State law, only if the Secretary of Labor finds that under such law (1) no reduced rate of contributions to a pooled fund or to a partially pooled account is permitted to a person (or group of persons) having individuals in his (or their) employ except on the basis of his (or their) experience with respect to unemployment or other factors bearing a direct relation to unemployment risk during not less than the 3 consecutive years immediately preceding the computation date; (2) no reduced rate of contributions to a guaranteed employment account is permitted to a person (or a group of persons) having individuals in his (or their) employ unless— (A) the guaranty of remuneration was fulfilled in the year preceding the computation date; and (B) the balance of such account amounts to not less than 212 percent of that part of the payroll or payrolls for the 3 years preceding the computation date by which contributions to such account were measured; and (C) such contributions were payable to such account with respect to 3 years preceding the computation date; (3) no reduced rate of contributions to a reserve account is permitted to a person (or group of persons) having individuals in his (or their) employ unless— (A) compensation has been payable from such account throughout the year preceding the computation date, and (B) the balance of such account amounts to not less than five times the largest amount of compensation paid from such account within any 1 of the 3 years preceding such date, and (C) the balance of such account amounts to not less than 212 percent of that part of the payroll or payrolls for the 3 years preceding such date by which contributions to such account were measured, and (D) such contributions were payable to such account with respect to the 3 years preceding the computation date. 59-191 O 76 7 |