42 U.S.C. § 1104 — Unemployment Trust Fund

Page 2525 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1104 § 1104. Unemployment Trust Fund (a) Establishment 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 subchapter called the ‘‘Fund’’. The Sec- retary of the Treasury is authorized and di- rected to receive and hold in the Fund all mon- eys 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 rail- road 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 Re- serve Bank. (b) Investments 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 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 ac- quired (1) on original issue at the issue price, or (2) by purchase of outstanding obligations at the market price. The purposes for which obliga- tions of the United States may be issued under chapter 31 of title 31 are hereby extended to au- thorize the issuance at par of special obligations exclusively to the Fund. Such special obliga- tions 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 obliga- tions 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 cen- tum, the rate of interest of such special obliga- tions shall be the multiple of one-eighth of 1 per centum next lower than such average rate. Obli- gations 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 spe- cial obligations if issued to the Fund upon the date of such acquisition. Advances made to the Federal unemployment account pursuant to sec- tion 1323 of this title shall not be invested. (c) Sale or redemption of obligations 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. (d) Treatment of interest and proceeds 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. (e) Separate book accounts The Fund shall be invested as a single fund, but the Secretary of the Treasury shall main- tain a separate book account for each State agency, the employment security administra- tion account, the Federal unemployment ac- count, the railroad unemployment insurance ac- count, and the railroad unemployment insur- ance administration fund and shall credit quar- terly (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 ac- count, 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 re- ducing (but not below zero) the amount in the account by the balance of advances made to the State under section 1321 of this title, and (2) in the case of the Federal unemployment account— (A) by adding to the amount in the ac- count the aggregate of the reductions under paragraph (1), and (B) by subtracting from the sum so ob- tained the balance of advances made under section 1323 of this title to the account. (f) Payment to State agencies and Railroad Re- tirement Board 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 ac- count of such State agency at the time of such payment. The Secretary of the Treasury is au- thorized and directed to make such payments out of the railroad unemployment insurance ac- count for the payment of benefits, and out of the railroad unemployment insurance administra- tion fund for the payment of administrative ex- penses, 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. (g) Federal unemployment account; establish- ment There is hereby established in the Unemploy- ment Trust Fund a Federal unemployment ac- count. (Aug. 14, 1935, ch. 531, title IX, § 904, 49 Stat. 640; June 25, 1938, ch. 680, § 10(e)–(g), 52 Stat. 1104, 1105; Oct. 3, 1944, ch. 480, title IV, § 401, 58 Stat. 789; Aug. 6, 1947, ch. 510, § 5(a), 61 Stat. 794; Aug. 28, 1950, ch. 809, title IV, § 404(b), 64 Stat. 560; Aug. 5, 1954, ch. 657, § 5(b)–(f), 68 Stat. 673; Pub. L. 85–927, pt. II, § 204, Sept. 6, 1958, 72 Stat. 1782; Pub. L. 86–346, title I, § 104(3), Sept. 22, 1959, 73 Stat. 622; Pub. L. 86–778, title V, § 521, Sept. 13, 1960, 74 Stat. 976; Pub. L. 98–369, div. B, title VI, § 2663(d)(3), July 18, 1984, 98 Stat. 1167; Pub. L. 102–318, title V, § 531(d)(3), July 3, 1992, 106 Stat. 317.) Editorial Notes AMENDMENTS 1992—Subsec. (g). Pub. L. 102–318 struck out after the first sentence the following: ‘‘There is hereby author- ized 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 un- Page 2526 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1104 employment 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 ad- ministrative 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 subchapter III of this chapter, expenditures for the administration of that subchapter by the Secretary of Health and Human Services, or the Secretary of Labor, and expenditures for the administration of title IX of this Act, or of the Federal Unemployment Tax Act, by the Department of the Treasury, the Secretary of Health and Human Serv- ices, 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 Stat. 754), and the sum of $18,451,846 which was authorized to be appropriated by section 361(b) of title 45.’’ 1984—Subsec. (b). Pub. L. 98–369 substituted ‘‘chapter 31 of title 31’’ for ‘‘the Second Liberty Bond Act, as amended’’. 1960—Subsec. (a). Pub. L. 86–778 substituted ‘‘with any depositary designated by him for such purpose, or with any Federal Reserve Bank’’ for ‘‘or with any Federal Reserve bank or member bank of the Federal Reserve System designated by him for such purpose’’. Subsec. (b). Pub. L. 86–778 substituted ‘‘Second Lib- erty Bond Act, as amended’’ and ‘‘section 1323’’ for ‘‘section 752 of title 31’’ and ‘‘section 1322(c)’’, respec- tively, and inserted ‘‘made’’ after ‘‘Advances’’. Subsec. (e). Pub. L. 86–778 provided for the mainte- nance of a separate book account for the employment security administration account and substituted ‘‘bal- ance of advances made to the State under section 1321 of this title’’ for ‘‘aggregate of the outstanding ad- vances under section 1321 of this title from the Federal unemployment account’’ in par. (1) and ‘‘balance of ad- vances made under section 1323 of this title to the ac- count’’ for ‘‘aggregate of the outstanding advances from the Treasury to the account pursuant to section 1322(c) of this title’’. Subsec. (g). Pub. L. 86–778 redesignated former subsec. (h) as (g). 1959—Subsec. (b). Pub. L. 86–346 substituted ‘‘on origi- nal issue at the issue price’’ for ‘‘on original issue at par’’. 1958—Subsec. (a). Pub. L. 85–927, § 204(a), inserted ‘‘or the railroad unemployment insurance administration fund’’. Subsec. (e). Pub. L. 85–927, § 204(b), substituted ‘‘the railroad unemployment insurance account, and the railroad unemployment insurance administration fund’’ for ‘‘and the railroad unemployment insurance account’’. Subsec. (f). Pub. L. 85–927, § 204(c), substituted ‘‘rail- road unemployment insurance account for the payment of benefits, and out of the railroad unemployment in- surance administration fund for the payment of admin- istrative 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’’ for ‘‘fund as the Railroad Retirement Board may duly certify, not ex- ceeding the amount standing to the railroad unemploy- ment insurance account at the time of such payment’’. 1954—Subsec. (a). Act Aug. 5, 1954, § 5(b), substituted ‘‘or otherwise deposited in or credited to the Fund or any account therein’’ for ‘‘or deposited pursuant to ap- propriations to the Federal unemployment account’’. Subsec. (b). Act Aug. 5, 1954, § 5(c), inserted provision that advances to the Federal unemployment account pursuant to section 1323 of this title shall not be in- vested. Subsec. (e). Act Aug. 5, 1954, § 5(d), inserted ‘‘For the purposes 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 aggregate of the outstanding advances under sec- tion 1201 from the Federal unemployment account, and ‘‘(2) in the case of the Federal unemployment ac- count, (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 aggregate of the outstanding advances from the Treasury to the account pursuant to section 1202(c).’’ Subsec. (g). Act Aug. 5, 1954, § 5(e), repealed subsec. (g) which authorized Secretary of Treasury to make trans- fers from Federal unemployment account to account of any State in Unemployment Trust Fund. Subsec. (h). Act Aug. 5, 1954, § 5(f), substituted a new cl. (2) in second sentence and repealed the third sen- tence: ‘‘Any amounts in the Federal unemployment ac- count on April 1952, and any amounts repaid to such ac- count after such date, shall be covered into the general fund of the Treasury.’’ 1950—Subsec. (h). Act Aug. 28, 1950, substituted ‘‘prior to July 1, 1951’’ for ‘‘prior to July 1, 1949’’, ‘‘on July 1, 1951, and ending on December 31, 1951’’ for ‘‘on July 1, 1949, and ending on December 31, 1949’’ in cl. (2) of sec- ond sentence, and ‘‘April 1, 1952’’ for ‘‘April 1, 1950’’ in third sentence. 1947—Subsec. (h). Act Aug. 6, 1947, amended subsec. (h) generally, and, among other changes, changed the periods for which excess of tax collections over admin- istrative expenditures could be appropriated to the un- employment account, limited authorized appropria- tions for the unemployment account to the excess col- lections for the period ending Dec. 31, 1949, provided for amounts in such account on Apr. 1, 1950, and any repay- ments to the account after such date be covered into the general fund of the Treasury, and provided for an additional deduction of $18,451,846 from the total amount of taxes collected prior to July 1, 1943. 1944—Subsec. (a). Act Oct. 3, 1944, § 401(a), inserted ‘‘, or deposited pursuant to appropriations to the Fed- eral unemployment account’’ after ‘‘unemployment in- surance account’’ in second sentence. Subsec. (e). Act Oct. 3, 1944, § 401(b), inserted ‘‘, the Federal unemployment account’’ after ‘‘a separate book account for each State agency’’. Subsecs. (g), (h). Act Oct. 3, 1944, § 401(c), added sub- secs. (g) and (h). 1938—Subsec. (a). Act June 25, 1938, § 10(e), inserted ‘‘or by the Railroad Retirement Board to the credit of the railroad unemployment insurance account’’. Subsec. (e). Act June 25, 1938, § 10(f), inserted ‘‘and the railroad unemployment insurance account’’. Subsec. (f). Act June 25, 1938, § 10(g), inserted second sentence. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–369 effective July 18, 1984, but not to be construed as changing or affecting any right, liability, status, or interpretation which existed (under the provisions of law involved) before that date, see section 2664(b) of Pub. L. 98–369, set out as a note under section 401 of this title. EFFECTIVE DATE OF 1958 AMENDMENT Amendment by Pub. L. 85–927 effective Sept. 6, 1958, except as otherwise indicated, see section 207(c) of Pub. L. 85–927, set out as a note under section 351 of Title 45, Railroads. EFFECTIVE DATE OF 1950 AMENDMENT Act Aug. 28, 1950, ch. 809, title IV, § 404(c), 64 Stat. 560, provided that: ‘‘The amendments made by subsections (a) and (b) of this section [amending this section and section 1321 of this title] shall be effective January 1, 1950.’’ TERMINATION DATE Act Aug. 6, 1947, ch. 510, § 4, 61 Stat. 794, provided that: ‘‘Section 603 of the War Mobilization and Recon- Page 2527 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1105 version Act of 1944 [section 603 of act Oct. 3, 1944, ch. 480, former 50 U.S.C. App. 1651 note] (terminating the provisions of such Act [former 50 U.S.C. App. 1651 et seq.] on June 30, 1947) shall not be applicable in the case of the amendments made by title IV of such Act to the Social Security Act [amending this section and section 1321 of this title].’’ PAYMENTS TO STATES Act Aug. 24, 1937, ch. 755, 50 Stat. 754, provided for payments to States of 90 per cent of proceeds of the un- employment tax collected prior to Jan. 31, 1938, where State had enacted an approved unemployment-com- pensation law during 1937. § 1105. Extended unemployment compensation account (a) Establishment There is hereby established in the Unemploy- ment Trust Fund an extended unemployment compensation account. For the purposes pro- vided for in section 1104(e) of this title, such ac- count shall be maintained as a separate book ac- count. (b) Transfers to account (1) Except as provided in paragraph (3), the Secretary of the Treasury shall transfer (as of the close of each month) from the employment security administration account to the extended unemployment compensation account estab- lished by subsection (a), an amount (determined by such Secretary) equal to 20 percent of the amount by which— (A) the transfers to the employment secu- rity administration account pursuant to sec- tion 1101(b)(2) of this title during such month, exceed (B) the payments during such month from the employment security administration ac- count pursuant to section 1101(b)(3) and (d) of this title. If for any such month the payments referred to in subparagraph (B) exceed the transfers re- ferred to in subparagraph (A), proper adjust- ments shall be made in the amounts subse- quently transferred. (2) Whenever the Secretary of the Treasury de- termines pursuant to section 1101(f) of this title that there is an excess in the employment secu- rity administration account as of the close of any fiscal year beginning after June 30, 1972, there shall be transferred (as of the beginning of the succeeding fiscal year) to the extended un- employment compensation account the total amount of such excess or so much thereof as is required to increase the amount in the extended unemployment compensation account to which- ever of the following is the greater: (A) $750,000,000, or (B) the amount (determined by the Sec- retary of Labor and certified by him to the Secretary of the Treasury) equal to 0.5 percent of the total wages subject (determined without any limitation on amount) to contributions under all State unemployment compensation laws for the calendar year ending during the fiscal year for which the excess is determined. (3) The Secretary of the Treasury shall make no transfer pursuant to paragraph (1) as of the close of any month if he determines that the amount in the extended unemployment com- pensation account is equal to (or in excess of) the limitation provided in paragraph (2). (c) Transfers to State accounts Amounts in the extended unemployment com- pensation account shall be available for transfer to the accounts of the States in the Unemploy- ment Trust Fund as provided in section 204(e) of the Federal-State Extended Unemployment Compensation Act of 1970. (d) Advances to account; repayment There are hereby authorized to be appro- priated, without fiscal year limitation, to the extended unemployment compensation account, as repayable advances, such sums as may be nec- essary to carry out the purposes of the Federal- State Extended Unemployment Compensation Act of 1970. Amounts appropriated as repayable advances shall be repaid by transfers from the extended unemployment compensation account to the general fund of the Treasury, at such times as the amount in the extended unemploy- ment compensation account is determined by the Secretary of the Treasury, in consultation with the Secretary of Labor, to be adequate for such purpose. Repayments under the preceding sentence shall be made whenever the Secretary of the Treasury (after consultation with the Secretary of Labor) determines that the amount then in the account exceeds the amount nec- essary to meet the anticipated payments from the account during the next 3 months. Any amount transferred as a repayment under this subsection shall be credited against, and shall operate to reduce, any balance of advances re- payable under this subsection. Amounts appro- priated as repayable advances for purposes of this subsection shall bear interest at a rate equal to the average rate of interest, computed as of the end of the calendar month next pre- ceding the date of such advance, borne by all in- terest bearing obligations of the United States then forming part of the public debt; except that in cases in which such average rate is not a mul- tiple of one-eighth of 1 percent, the rate of inter- est shall be the multiple of one-eighth of 1 per- cent next lower than such average rate. (Aug. 14, 1935, ch. 531, title IX, § 905, as added Pub. L. 91–373, title III, § 305(a), Aug. 10, 1970, 84 Stat. 716; amended Pub. L. 92–329, § 2(c), June 30, 1972, 86 Stat. 398; Pub. L. 94–566, title II, § 211(e)(2) [(c)(2)], Oct. 20, 1976, 90 Stat. 2677; Pub. L. 97–248, title II, §§ 271(b)(2)(B), 275, Sept. 3, 1982, 96 Stat. 555, 558; Pub. L. 100–203, title IX, §§ 9154(b)(2), (c)(1), 9155(a), Dec. 22, 1987, 101 Stat. 1330–326; Pub. L. 102–318, title V, § 531(a), July 3, 1992, 106 Stat. 315; Pub. L. 103–152, § 5, Nov. 24, 1993, 107 Stat. 1518.) Editorial Notes REFERENCES IN TEXT The Federal-State Extended Unemployment Com- pensation Act of 1970, referred to in subsecs. (c) and (d), is Pub. L. 91–373, title II, Aug. 10, 1970, 84 Stat. 708, which is set out as a note under section 3304 of Title 26, Internal Revenue Code. Section 204(e) of that Act is part of that note. For complete classification of this Act to the Code, see Tables.