Ante, p. 980. Pub. Law 86-778 74 STAT. 981. September 13, 1960 (ii) 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 10 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; "(B) in the case of a taxable year beginning with the third or fourth consecutive January 1 as of the beginning of which there is a balance of such advances, by the amount determined by multiplying the wages paid by such taxpayer during such taxable year which are attributable to such State by the percentage (if any) by which 66 "(1) 2.7 percent, exceeds "(ii) the average employer contribution rate for such State for the calendar year preceding such taxable year; and "(C) in the case of a taxable year beginning with the fifth or any succeeding consecutive January 1 as of the beginning of which there is a balance of such advances, by the amount determined by multiplying the wages paid by such taxpayer 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. "(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 3.1 percent. 66 '(2) WAGES ATTRIBUTABLE TO A PARTICULAR STATE..-For purposes of subsection (c), wages shall be attributable to a particular 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. ARE "(3) ADDITIONAL TAXES INAPPLICABLE WHERE ADVANCES 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. 66 "(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 increas September 13, 1960 Pub. Law 86-778 ing 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. "(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. "(8) CROSS REFERENCE.— "For reduction of total credits allowable under subsection (c), see section 104 of the Temporary Unemployment Compensation Act of 1958." Effective Date (c) The amendments made by subsection (a) shall apply only with respect to the calendar year 1961 and calendar years thereafter. CONFORMING AMENDMENTS SEC. 524. (a) Section 301 of the Social Security Act is amended to 42 USC 501. read as follows: "SEC. 301. The amounts made available pursuant to section 901 (c) Ante, p. 971. (1) (A) for the purpose of assisting the States in the administration of their unemployment compensation laws shall be used as hereinafter provided." (b) Section 104 of the Temporary Unemployment Compensation 42 USC 1400c. Act of 1958, as amended, is amended (1) by striking out subsection (b); and (2) by amending subsection (a) by striking out the heading and "(a)", and by striking out "by December 1" and inserting in lieu thereof "before November 10". 26 USC 3305. Infra. Post, p. 986. 26 USC 3306. Ante, p. 980. 26 USC 3308, 3309, 3307. SEC. 531. (a) Section 3305 (b) of the Internal Revenue Code of 1954 is amended to read as follows: "(b) FEDERAL INSTRUMENTALITIES IN GENERAL.-The legislature of any State may require any instrumentality of the United States (other than an instrumentality to which section 3306 (c) (6) applies), and the individuals in its employ, to make contributions to an unemployment fund under a State unemployment compensation law approved by the Secretary of Labor under section 3304 and (except as provided in section 5240 of the Revised Statutes, as amended (12 U.S.C., sec. 484), and as modified by subsection (c)), to comply otherwise with such law. The permission granted in this subsection shall apply (A) only to the extent that no discrimination is made against such instrumentality, so that if the rate of contribution is uniform upon all other persons subject to such law on account of having individuals in their employ, and upon all employees of such persons, respectively, the contributions required of such instrumentality or the individuals in its employ shall not be at a greater rate than is required of such other persons and such employees, and if the rates are determined separately for different persons or classes of persons having individuals in their employ or for different classes of employees, the determination shall be based solely upon unemployment experience and other factors bearing a direct relation to unemployment risk; (B) only if such State law makes provision for the refund of any contributions required under such law from an instrumentality of the United States or its employees for any year in the event such State is not certified by the Secretary of Labor under section 3304 with respect to such year; and (C) only if such State law makes provision for the payment of unemployment compensation to any employee of any such instrumentality of the United States in the same amount, on the same terms, and subject to the same conditions as unemployment compensation is payable to employees of other employers under the State unemployment compensation law." (b) The third sentence of section 3305 (g) of such Code is amended by striking out "not wholly" and inserting in lieu thereof "neither wholly nor partially". 66 (c) Section 3306(c) (6) of such Code is amended to read as follows: "(6) service performed in the employ of the United States Government or of an instrumentality of the United States which is "(A) wholly or partially owned by the United States, or "(B) exempt from the tax imposed by section 3301 by virtue of any provision of law which specifically refers to such section (or the corresponding section of prior law) in granting such exemption;". (d) (1) Chapter 23 of such Code is amended by renumbering section 3308 as section 3309 and by inserting after section 3307 the following new section: "SEC. 3308. INSTRUMENTALITIES OF THE UNITED STATES. "Notwithstanding any other provision of law (whether enacted before or after the enactment of this section) which grants to any instrumentality of the United States an exemption from taxation, such instrumentality shall not be exempt from the tax imposed by section 3301 unless such other provision of law grants a specific exemption, by reference to section 3301 (or the corresponding section of prior law), from the tax imposed by such section." September 13, 1960 Pub. Law 86-778 74 STAT. 984. (2) The table of sections for such chapter is amended by striking cut the last line and inserting in lieu thereof the following: "Sec. 3308. Instrumentalities of the United States. "Sec. 3309. Short title." (e) So much of the first sentence of section 1501 (a) of the Social 42 USC 1361. Security Act as precedes paragraph (1) is amended by striking out "wholly" and inserting in lieu thereof "wholly or partially". (f) The first sentence of section 1507 (a) of the Social Security Act 42 USC 1367. is amended by striking out "wholly" and inserting in lieu thereof "wholly or partially". (g) Notwithstanding section 203 (b) of the Farm Credit Act of 73 Stat. 390. 1959, sections 3305 (b), 3306 (c) (6), and 3308 of the Internal Revenue 12 USC 6401 note. Code of 1954 and sections 1501(a) and 1507(a) of the Social Security Ante, p. 983. Act shall be applicable, according to their terms, to the Federal land banks, Federal intermediate credit banks, and banks for cooperatives. AMERICAN AIRCRAFT SEC. 532. (a) So much of section 3306 (c) of the Internal Revenue 26 USC 3306. Code of 1954 as precedes paragraph (1) thereof is amended by striking out "or (B) on or in connection with an American vessel" and all that follows down through the phrase "outside the United States," and by inserting in lieu thereof the following: "or (B) on or in connection with an American vessel or American aircraft under a contract of service which is entered into within the United States or during the performance of which and while the employee is employed on the vessel or aircraft it touches at a port in the United States, if the employee is employed on and in connection with such vessel or aircraft when outside the United States,". (b) Section 3306 (c) (4) of such Code is amended to read as follows: "(4) service performed on or in connection with a vessel or aircraft not an American vessel or American aircraft, if the employee is employed on and in connection with such vessel or aircraft when outside the United States;". (c) Section 3306 (m) of such Code is amended— (1) by striking out the heading and inserting in lieu thereof the following: "(m) AMERICAN VESSEL AND AIRCRAFT.-"; and (2) by striking out the period at the end thereof and inserting in lieu thereof a semicolon and the following: "and the term 'American aircraft' means an aircraft registered under the laws of the United States." FEEDER ORGANIZATIONS, ETC. SEC. 533. Section 3306 (c) (8) of the Internal Revenue Code of 1954 is amended to read as follows: "(8) service performed in the employ of a religious, charitable, educational, or other organization described in section 501 (c) (3) 26 USC 501. which is exempt from income tax under section 501 (a);". FRATERNAL BENEFICIARY SOCIETIES, AGRICULTURAL ORGANIZATIONS, VOL- SEC. 534. Section 3306 (c) (10) of the Internal Revenue Code of 1954 is amended to read as follows: "(10) (A) service performed in any calendar quarter in the employ of any organization exempt from income tax under section 501 (a) (other than an organization described in section 26 USC 401, 521. 42 USC 1301. Post, p.987. 42 USC 1363. 42 USC 1364. 42 USC 1362. Pub. Law 86-778 74 STAT. 985. September 13, 1960 401(a)) or under section 521, if the remuneration for such service is less than $50, or "(B) service performed in the employ of a school, college, or university, if such service is performed by a student who is enrolled and is regularly attending classes at such school, college, or university;". EFFECTIVE DATE SEC. 535. The amendments made by this part (other than the amendments made by subsections (e) and (f) of section 531) shall apply with respect to remuneration paid after 1961 for services performed after 1961. The amendments made by subsections (e) and (f) of section 531 shall apply with respect to any week of unemployment which begins after December 31, 1960. PART 4-EXTENSION OF FEDERAL-STATE UNEMPLOYMENT COMPENSA- EXTENSION OF TITLES III, IX, AND XII OF THE SOCIAL SECURITY ACT SEC. 541. Effective on and after January 1, 1961, paragraphs (1) and (2) of section 1101 (a) of the Social Security Act are amended to read as follows: "(1) The term 'State', except where otherwise provided, includes the District of Columbia and the Commonwealth of Puerto Rico, and when used in titles I, IV, V, VII, X, and XIV includes the Virgin Islands and Guam. "(2) The term 'United States' when used in a geographical sense means, except where otherwise provided, the States, the District of Columbia, and the Commonwealth of Puerto Rico." FEDERAL EMPLOYEES AND EX-SERVICEMEN SEC. 542. (a) (1) Effective with respect to weeks of unemployment beginning after December 31, 1965, section 1503 (b) of such Act is amended by striking out "Puerto Rico or". (2) Effective with respect to first claims filed after December 31, 1965, paragraph (3) of section 1504 of such Act is amended by striking out "Puerto Rico or" wherever appearing therein. (b) (1) Effective on and after January 1, 1961 (but only in the case of weeks of unemployment beginning before January 1, 1966) (A) Section 1502(b) of such Act is amended by striking out "(b) Any" and inserting in lieu thereof "(b) (1) Except as provided in paragraph (2), any", and by adding at the end thereof the following new paragraph: "(2) In the case of the Commonwealth of Puerto Rico, the agreement shall provide that compensation will be paid by the Commonwealth of Puerto Rico to any Federal employee whose Federal service and Federal wages are assigned under section 1504 to such Commonwealth, with respect to unemployment after December 31, 1960 (but only in the case of weeks of unemployment beginning before January 1, 1966), in the same amount, on the same terms, and subject to the same conditions as the compensation which would be payable to such employee under the unemployment compensation law of the District of Columbia if such employee's Federal service and Federal wages had been included as employment and wages under such law, except that if such employee, without regard to his Federal service and Federal wages, has employment or wages sufficient to qualify for any compensation during the benefit year under such law, then payments of compensation under this subsection shall be marle only on the basis |