September 13, 1960 Pub. Law 86-778 "(C) the money is withdrawn and the expenses are incurred after such date of enactment, and "(D) the appropriation law limits the total amount which may be obligated during a fiscal year to an amount which does not exceed the amount by which (i) the aggregate of the amounts transferred to the account of such State pursuant to subsections (a) and (b) during such fiscal year and the four preceding fiscal years, exceeds (ii) the aggregate of the amounts used by the State pursuant to this subsection and charged against the amounts transferred to the account of such State during such five fiscal years. For the purposes of subparagraph (D), amounts used by a State during any fiscal year shall be charged against equivalent amounts which were first transferred and which have not previously been so charged; except that no amount obligated for administration during any fiscal year may be charged against any amount transferred during a fiscal year earlier than the fourth preceding fiscal year. "UNEMPLOYMENT TRUST FUND "Establishment, etc. "SEC. 904. (a) There is hereby established in the Treasury of the United States a trust fund to be known as the 'Unemployment Trust Fund', hereinafter in this title called the 'Fund'. The Secretary of the Treasury is authorized and directed to receive and hold in the Fund all moneys deposited therein by a State agency from a State unemployment fund, or by the Railroad Retirement Board to the credit of the railroad unemployment insurance account or the railroad unemployment insurance administration fund, or otherwise deposited in or credited to the Fund or any account therein. Such deposit may be made directly with the Secretary of the Treasury, with any depositary designated by him for such purpose, or with any Federal Reserve Bank. "Investments "(b) It shall be the duty of the Secretary of the Treasury to invest such portion of the Fund as is not, in his judgment, required to meet current withdrawals. Such investment may be made only in interestbearing 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, 40 Stat. 288. are hereby extended to authorize the issuance at par of special obliga- 31 USC 774. tions exclusively to the Fund. Such special obligations shall bear interest at a rate equal to the average rate of interest, computed as of the end of the calendar month next preceding the date of such issue, borne by all interest-bearing obligations of the United States then forming part of the public debt; except that where such average rate is not a multiple of one-eighth of 1 per centum, the rate of interest of such special obligations shall be the multiple of one-eighth of 1 per centum next lower than such average rate. Obligations other than such special obligations may be acquired for the Fund only on such terms as to provide an investment yield not less than the yield which would be required in the case of special obligations if issued to the Fund upon the date of such acquisition. Advances made to the Federal unemployment account pursuant to section 1203 shall Post, p. 979. not be invested. Post, pp. 978, 979. Ante, p. 970. 42 USC 501-503. Pub. Law 86-778 74 STAT. 977. September 13, 1960 "Sale or Redemption of Obligations "(c) Any obligations acquired by the Fund (except special obligations issued exclusively to the Fund) may be sold at the market price, and such special obligations may be redeemed at par plus accrued interest. "Treatment of Interest and Proceeds "(d) The interest on, and the proceeds from the sale or redemption of, any obligations held in the Fund shall be credited to and form a part of the Fund. "Separate Book Accounts "(e) The Fund shall be invested as a single fund, but the Secretary of the Treasury shall maintain a separate book account for each State agency, the employment security administration account, the Federal unemployment account, the railroad unemployment insurance account, and the railroad unemployment insurance administration fund and shall credit quarterly (on March 31, June 30, September 30, and December 31, of each year) to each account, on the basis of the average daily balance of such account, a proportionate part of the earnings of the Fund for the quarter ending on such date. For the purpose of this subsection, the average daily balance shall be computed "(1) in the case of any State account, by reducing (but not below zero) the amount in the account by the balance of advances made to the State under section 1201, and "(2) in the case of the Federal unemployment account "(A) by adding to the amount in the account the aggregate of the reductions under paragraph (1), and "(B) by subtracting from the sum so obtained the balance of advances made under section 1203 to the account. "Payments to State Agencies and Railroad Retirement Board "(f) The Secretary of the Treasury is authorized and directed to pay out of the Fund to any State agency such amount as it may duly requisition, not exceeding the amount standing to the account of such State agency at the time of such payment. The Secretary of the Treasury is authorized and directed to make such payments out of the railroad unemployment insurance account for the payment of benefits, and out of the railroad unemployment insurance administration fund for the payment of administrative expenses, as the Railroad Retirement Board may duly certify, not exceeding the amount standing to the credit of such account or such fund, as the case may be, at the time of such payment. "Federal Unemployment Account "(g) There is hereby established in the Unemployment Trust Fund a Federal unemployment account. There is hereby authorized to be appropriated to such Federal unemployment account a sum equal to (1) the excess of taxes collected prior to July 1, 1946, under title IX of this Act or under the Federal Unemployment Tax Act, over the total unemployment administrative expenditures made prior to July 1, 1946, plus (2) the excess of taxes collected under the Federal Unemployment Tax Act after June 30, 1946, and prior to July 1, 1953, over the unemployment administrative expenditures made after June 30, 1946, and prior to July 1, 1953. As used in this subsection, the term 'unemployment administrative expenditures' means expenditures for grants under title III of this Act, expenditures for the September 13, 1960 Pub. Law 86-778 74 STAT. 978, administration of that title by the Social Security Board, the Federal Security Administrator, or the Secretary of Labor, and expenditures for the administration of title IX of this Act, or of the Federal Ante, p. 970. Unemployment Tax Act, by the Department of the Treasury, the Post, p. 980. Social Security Board, the Federal Security Administrator, or the Secretary of Labor. For the purposes of this subsection, there shall be deducted from the total amount of taxes collected prior to July 1, 1943, under title IX of this Act, the sum of $40,561,886.43 which was authorized to be appropriated by the Act of August 24, 1937 (50 42 USC 1103 Stat. 754), and the sum of $18,451,846 which was authorized to be note. appropriated by section 11(b) of the Railroad Unemployment 52 Stat. 1105. Insurance Act." AMENDMENT OF TITLE XII OF THE SOCIAL SECURITY ACT SEC. 522. (a) Title XII of the Social Security Act (42 U.S.C., sec. 1321 and following) is amended to read as follows: "TITLE XII-ADVANCES TO STATE UNEMPLOYMENT FUNDS "ADVANCES TO STATE UNEMPLOYMENT FUNDS 45 USC 361. "SEC. 1201. (a) (1) Advances shall be made to the States from the Federal unemployment account in the Unemployment Trust Fund as provided in this section, and shall be repayable, without interest, in the manner provided in sections 901(d) (1), 903(b)(2), and 1202. Ante, pp. 972, An advance to a State for the payment of compensation in any month 975. may be made if— "(A) the Governor of the State applies therefor no earlier than the first day of the preceding month, and "(B) he furnishes to the Secretary of Labor his estimate of the amount of an advance which will be required by the State for the payment of compensation in such month. "(2) In the case of any application for an advance under this section to any State for any month, the Secretary of Labor shall "(A) determine the amount (if any) which he finds will be required by such State for the payment of compensation in such month, and "(B) certify to the Secretary of the Treasury the amount (not greater than the amount estimated by the Governor of the State) determined under subparagraph (A). The aggregate of the amounts certified by the Secretary of Labor with respect to any month shall not exceed the amount which the Secretary of the Treasury reports to the Secretary of Labor is available in the Federal unemployment account for advances with respect to such month. "(3) For purposes of this subsection "(A) an application for an advance shall be made on such forms, and shall contain such information and data (fiscal and otherwise) concerning the operation and administration of the State unemployment compensation law, as the Secretary of Labor deems necessary or relevant to the performance of his duties under this title, "(B) the amount required by any State for the payment of compensation in any month shall be determined with due allowance for contingencies and taking into account all other amounts that will be available in the State's unemployment fund for the payment of compensation in such month, and Ante, p. 975. Ante, p. 973. Post, p. 980. Ante, pp. 970, Pub. Law 86-778 74 STAT. 979. September 13, 1960 "(C) the term 'compensation' means cash benefits payable to individuals with respect to their unemployment, exclusive of expenses of administration. "(b) The Secretary of the Treasury shall, prior to audit or settlement by the General Accounting Office, transfer from the Federal unemployment account to the account of the State in the Unemployment Trust Fund the amount certified under subsection (a) by the Secretary of Labor (but not exceeding that portion of the balance in the Federal unemployment account at the time of the transfer which is not restricted as to use pursuant to section 903 (b)(1)). "REPAYMENT BY STATES OF ADVANCES TO STATE UNEMPLOYMENT FUNDS "SEC. 1202. The Governor of any State may at any time request that funds be transferred from the account of such State to the Federal unemployment account in repayment of part or all of that balance of advances, made to such State under section 1201, specified in the request. The Secretary of Labor shall certify to the Secretary of the Treasury the amount and balance specified in the request; and the Secretary of the Treasury shall promptly transfer such amount in reduction of such balance. "ADVANCES TO FEDERAL UNEMPLOYMENT ACCOUNT "SEC. 1203. There are hereby authorized to be appropriated to the Federal unemployment account, as repayable advances (without interest), such sums as may be necessary to carry out the purposes of this title. Whenever, after the application of section 901(f) (3) with respect to the excess in the employment security administration account as of the close of any fiscal year, there remains any portion of such excess, so much of such remainder as does not exceed the balance of advances made pursuant to this section shall be transferred to the general fund of the Treasury and shall be credited against, and shall operate to reduce, such balance of advances. "DEFINITION OF GOVERNOR "SEC. 1204. When used in this title, the term 'Governor' includes the Commissioners of the District of Columbia." (b) (1) No amount shall be transferred on or after the date of the enactment of this Act from the Federal unemployment account to the account of any State in the Unemployment Trust Fund pursuant to any application made under section 1201 (a) of the Social Security Act as in effect before such date; except that, if— (A) some but not all of an amount certified by the Secretary of Labor to the Secretary of the Treasury for transfer to the account of any State was transferred to such account before such date, and (B) the Governor of such State, after the date of the enactment of this Act, requests the Secretary of the Treasury to transfer all or any part of the remainder to such account, the Secretary of the Treasury shall, prior to audit or settlement by the General Accounting Office, transfer from the Federal unemployment account to the account of such State in the Unemployment Trust Fund the amount so requested or (if smaller) the amount available in the Federal unemployment account at the time of the transfer. No such amount shall be transferred under this paragraph after the oneyear period beginning on the date of the enactment of this Act. (2) For purposes of section 3302 (c) of the Federal Unemployment Tax Act and titles IX and XII of the Social Security Act, if any September 13, 1960 Pub. Law 86-778 amount is transferred pursuant to paragraph (1) to the unemployment account of any State, such amount shall be treated as an advance made before the date of the enactment of this Act. AMENDMENTS TO THE FEDERAL UNEMPLOYMENT TAX ACT Increase in Tax Rate SEC. 523. (a) Section 3301 of the Internal Revenue Code of 1954 26 USC 3301. (relating to rate of tax under Federal Unemployment Tax Act) is amended (1) by striking out "1955" and inserting in lieu thereof "1961", and (2) by striking out "3 percent" and inserting in lieu thereof "3.1 percent". Computation of Credits Against Tax (b) Section 3302 of such Code (relating to credits against tax) is 26 USC 3302. amended by striking out subsection (c) and inserting in lieu thereof the following new subsections: "(c) LIMIT ON TOTAL CREDITS.— "(1) The total credits allowed to a taxpayer under this section shall not exceed 90 percent of the tax against which such credits are allowable. "(2) If an advance or advances have been made to the unem ployment account of a State under title XII of the Social Se- Ante, pp. 978, curity Act before the date of the enactment of the Employment 970. Security Act of 1960, then the total credits (after applying subsections (a) and (b) and paragraph (1) of this subsection) otherwise allowable under this section for the taxable year in the case of a taxpayer subject to the unemployment compensation law of such State shall be reduced "(A) in the case of a taxable year beginning with the fourth consecutive January 1 as of the beginning of which there is a balance of such advances, by 5 percent of the tax imposed by section 3301 with respect to the wages paid by such taxpayer during such taxable year which are attributable to such State; and "(B) in the case of any succeeding taxable year beginning with a consecutive January 1 as of the beginning of which there is a balance of such advances, by an additional 5 percent, for each such succeeding taxable year, of the tax imposed by section 3301 with respect to the wages paid by such taxpayer during such taxable year which are attributable to such State. "(3) If an advance or advances have been made to the unemployment account of a State under title XII of the Social Security Act on or after the date of the enactment of the Employment Security Act of 1960, then the total credits (after applying subsections (a) and (b) and paragraphs (1) and (2) of this subsection) otherwise allowable under this section for the taxable year in the case of a taxpayer subject to the unemployment compensation law of such State shall be reduced "(A) (i) in the case of a taxable year beginning with the second consecutive January 1 as of the beginning of which there is a balance of such advances, by 10 percent of the tax imposed by section 3301 with respect to the wages paid by such taxpayer during such taxable year which are attributable to such State; and |