-CITE- 26 USC CHAPTER 23 - FEDERAL UNEMPLOYMENT TAX ACT 01/02/2006 -EXPCITE- TITLE 26 - INTERNAL REVENUE CODE Subtitle C - Employment Taxes CHAPTER 23 - FEDERAL UNEMPLOYMENT TAX ACT -HEAD- CHAPTER 23 - FEDERAL UNEMPLOYMENT TAX ACT -MISC1- Sec. 3301. Rate of tax. 3302. Credits against tax. 3303. Conditions of additional credit allowance. 3304. Approval of State laws. 3305. Applicability of State law. 3306. Definitions. 3307. Deductions as constructive payments. 3308. Instrumentalities of the United States. 3309. State law coverage of services performed for nonprofit organizations or governmental entities. 3310. Judicial review. 3311. Short title. AMENDMENTS 1976 - Pub. L. 94-566, title I, Sec. 115(c)(4), Oct. 20, 1976, 90 Stat. 2671, substituted "services performed for nonprofit organizations or governmental entities" for "certain services performed for nonprofit organizations and for State hospitals and institutions of higher education" in item 3309. 1970 - Pub. L. 91-373, title I, Secs. 104(b)(2), 131(b)(3), Aug. 10, 1970, 84 Stat. 699, 705, added items 3309 and 3310 and redesignated former item 3309 as 3311. 1960 - Pub. L. 86-778, title V, Sec. 531(d)(2), Sept. 13, 1960, 74 Stat. 984, added item 3308 and redesignated former item 3308 as 3309. -End- -CITE- 26 USC Sec. 3301 01/02/2006 -EXPCITE- TITLE 26 - INTERNAL REVENUE CODE Subtitle C - Employment Taxes CHAPTER 23 - FEDERAL UNEMPLOYMENT TAX ACT -HEAD- Sec. 3301. Rate of tax -STATUTE- There is hereby imposed on every employer (as defined in section 3306(a)) for each calendar year an excise tax, with respect to having individuals in his employ, equal to - (1) 6.2 percent in the case of calendar years 1988 through 2007; or (2) 6.0 percent in the case of calendar year 2008 and each calendar year thereafter; of the total wages (as defined in section 3306(b)) paid by him during the calendar year with respect to employment (as defined in section 3306(c)). -SOURCE- (Aug. 16, 1954, ch. 736, 68A Stat. 439; Pub. L. 86-778, title V, Sec. 523(a), Sept. 13, 1960, 74 Stat. 980; Pub. L. 87-6, Sec. 14(a), Mar. 24, 1961, 75 Stat. 16; Pub. L. 88-31, Sec. 2(a), May 29, 1963, 77 Stat. 51; Pub. L. 91-373, title III, Sec. 301(a), Aug. 10, 1970, 84 Stat. 713; Pub. L. 92-329, Sec. 2(a), June 30, 1972, 86 Stat. 398; Pub. L. 94-455, title XIX, Sec. 1903(a)(11), Oct. 4, 1976, 90 Stat. 1808; Pub. L. 94-566, title II, Sec. 211(b), Oct. 20, 1976, 90 Stat. 2676; Pub. L. 97-248, title II, Sec. 271(b)(1), (c)(1), Sept. 3, 1982, 96 Stat. 554, 555; Pub. L. 99-514, title XVIII, Sec. 1899A(42), Oct. 22, 1986, 100 Stat. 2960; Pub. L. 100- 203, title IX, Sec. 9153(a), Dec. 22, 1987, 101 Stat. 1330-326; Pub. L. 101-508, title XI, Sec. 11333(a), Nov. 5, 1990, 104 Stat. 1388-470; Pub. L. 102-164, title IV, Sec. 402, Nov. 15, 1991, 105 Stat. 1061; Pub. L. 103-66, title XIII, Sec. 13751, Aug. 10, 1993, 107 Stat. 664; Pub. L. 105-34, title X, Sec. 1035, Aug. 5, 1997, 111 Stat. 937.) -MISC1- AMENDMENTS 1997 - Par. (1). Pub. L. 105-34, Sec. 1035(1), substituted "2007" for "1998". Par. (2). Pub. L. 105-34, Sec. 1035(2), substituted "2008" for "1999". 1993 - Par. (1). Pub. L. 103-66, Sec. 13751(1), substituted "1998" for "1996". Par. (2). Pub. L. 103-66, Sec. 13751(2), substituted "1999" for "1997". 1991 - Par. (1). Pub. L. 102-164, Sec. 402(1), substituted "1996" for "1995". Par. (2). Pub. L. 102-164, Sec. 402(2), substituted "1997" for "1996". 1990 - Par. (1). Pub. L. 101-508, Sec. 11333(a)(1), substituted "1988 through 1995" for "1988, 1989, and 1990". Par. (2). Pub. L. 101-508, Sec. 11333(a)(2), substituted "1996" for "1991". 1987 - Pars. (1), (2). Pub. L. 100-203 amended pars. (1) and (2) generally. Prior to amendment, pars. (1) and (2) read as follows: "(1) 6.2 percent, in the case of a calendar year beginning before the first calendar year after 1976, as of January 1 of which there is not a balance of repayable advances made to the extended unemployment compensation account (established by section 905(a) of the Social Security Act); or "(2) 6.0 percent, in the case of such first calendar year and each calendar year thereafter;". 1986 - Par. (1). Pub. L. 99-514 substituted "unemployment" for "unemployed". 1982 - Par. (1). Pub. L. 97-248, Sec. 271(c)(1)(A), substituted "6.2 percent" for "3.5 percent". Pub. L. 97-248, Sec. 271(b)(1), substituted "3.5 percent" for "3.4 percent". Par. (2). Pub. L. 97-248, Sec. 271(c)(1)(B), substituted "6.0 percent" for "3.2 percent". 1976 - Pub. L. 94-566 substituted provisions imposing an excise tax equal to 3.4 percent, in the case of a calendar year beginning before the first calendar year after 1976, as of January 1 of which there is not a balance of repayable advances made to the extended unemployed compensation account (established by section 905(a) of the Social Security Act), or 3.2 percent, in the case of such first calendar year and each calendar year thereafter, of the total wages (as defined in section 3306(b)) paid by him during the calendar year with respect to employment (as defined in section 3306(c)), for provisions imposing an excise tax for the calendar year 1970 and each calendar year thereafter, with respect to having individuals in his employ, equal to 3.2 percent of the total wages (as defined in section 3306(b)) paid by him during the calendar year with respect to employment (as defined in section 3306(c)) and provisions that, in the case of wages paid during the calendar year 1973, the rate of such tax should be 3.28 percent in lieu of 3.2 percent. Pub. L. 94-455 substituted "each calendar year" for "the calendar year 1970 and each calendar year thereafter" and struck out provisions relating to the rate of tax in the case of wages paid during the calendar year 1973. 1972 - Pub. L. 92-329 inserted provisions setting forth the rate of tax in the case of wages paid during the calendar year 1973. 1970 - Pub. L. 91-373 increased the rate from 3.1 percent to 3.2 percent and struck out provisions setting special rates for wages paid during 1962 and 1963. 1963 - Pub. L. 88-31 reduced the tax rate for the year 1963 from 3.5 percent to 3.35 percent. 1961 - Pub. L. 87-6 provided for a tax rate of 3.5 percent for calendar years 1962 and 1963. 1960 - Pub. L. 86-778 substituted "1961" for "1955" and "3.1 percent" for "3 percent". EFFECTIVE DATE OF 1990 AMENDMENT Section 11333(b) of Pub. L. 101-508 provided that: "The amendments made by this section [amending this section] shall apply to wages paid after December 31, 1990." EFFECTIVE DATE OF 1987 AMENDMENT Section 9153(b) of Pub. L. 100-203 provided that: "The amendment made by subsection (a) [amending this section] shall apply to wages paid on or after January 1, 1988." EFFECTIVE DATE OF 1982 AMENDMENT Section 271(d)(1), (2), formerly 271(b)(1), (2), of Pub. L. 97- 248, as redesignated by Pub. L. 98-601, Sec. 1(a), Oct. 30, 1984, 98 Stat. 3147, provided that: "(1) Subsections (a) and (b). - The amendments made by subsections (a) and (b) [amending this section, sections 3306 and 6157 of this title, and sections 1101 and 1105 of Title 42, The Public Health and Welfare] shall apply to remuneration paid after December 31, 1982. "(2) Subsection (c). - The amendments made by subsection (c) [amending this section, sections 3302 and 6157 of this title, and section 1101 of Title 42] shall apply to remuneration paid after December 31, 1984." EFFECTIVE DATE OF 1976 AMENDMENT Section 211(d)(2) of Pub. L. 94-566 provided that: "The amendment made by subsection (b) [amending this section] shall apply to remuneration paid after December 31, 1976." EFFECTIVE DATE OF 1970 AMENDMENT Section 301(a) of Pub. L. 91-373 provided that the amendment made by that section is effective with respect to remuneration paid after Dec. 31, 1969. EFFECTIVE DATE OF 1960 AMENDMENT Section 523(c) of Pub. L. 86-778 provided that: "The amendments made by subsection (a) [amending this section] shall apply only with respect to the calendar year 1961 and calendar years thereafter." PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989 For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or title XVIII [Secs. 1800-1899A] of Pub. L. 99-514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99-514, as amended, set out as a note under section 401 of this title. -End- -CITE- 26 USC Sec. 3302 01/02/2006 -EXPCITE- TITLE 26 - INTERNAL REVENUE CODE Subtitle C - Employment Taxes CHAPTER 23 - FEDERAL UNEMPLOYMENT TAX ACT -HEAD- Sec. 3302. Credits against tax -STATUTE- (a) Contributions to State unemployment funds (1) The taxpayer may, to the extent provided in this subsection and subsection (c), credit against the tax imposed by section 3301 the amount of contributions paid by him into an unemployment fund maintained during the taxable year under the unemployment compensation law of a State which is certified as provided in section 3304 for the 12-month period ending on October 31 of such year. (2) The credit shall be permitted against the tax for the taxable year only for the amount of contributions paid with respect to such taxable year. (3) The credit against the tax for any taxable year shall be permitted only for contributions paid on or before the last day upon which the taxpayer is required under section 6071 to file a return for such year; except that credit shall be permitted for contributions paid after such last day, but such credit shall not exceed 90 percent of the amount which would have been allowable as credit on account of such contributions had they been paid on or before such last day. (4) Upon the payment of contributions into the unemployment fund of a State which are required under the unemployment compensation law of that State with respect to remuneration on the basis of which, prior to such payment into the proper fund, the taxpayer erroneously paid an amount as contributions under another unemployment compensation law, the payment into the proper fund shall, for purposes of credit against the tax, be deemed to have been made at the time of the erroneous payment. If, by reason of such other law, the taxpayer was entitled to cease paying contributions with respect to services subject to such other law, the payment into the proper fund shall, for purposes of credit against the tax, be deemed to have been made on the date the return for the taxable year was filed under section 6071. (5) In the case of wages paid by the trustee of an estate under title 11 of the United States Code, if the failure to pay contributions on time was without fault by the trustee, paragraph (3) shall be applied by substituting "100 percent" for "90 percent". (b) Additional credit In addition to the credit allowed under subsection (a), a taxpayer may credit against the tax imposed by section 3301 for any taxable year an amount, with respect to the unemployment compensation law of each State certified as provided in section 3303 for the 12-month period ending on October 31 of such year, or with respect to any provisions thereof so certified, equal to the amount, if any, by which the contributions required to be paid by him with respect to the taxable year were less than the contributions such taxpayer would have been required to pay if throughout the taxable year he had been subject under such State law to the highest rate applied thereunder in such 12-month period to any person having individuals in his employ, or to a rate of 5.4 percent, whichever rate is lower. (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 unemployment account of a State under title XII of the Social Security Act, 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)(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 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 (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 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; (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), multiplied by a fraction, the numerator of which is the State's average annual wage in covered employment for the calendar year in which the determination is made and the denominator of which is the wage base under this chapter, by which - (i) 2.7 percent multiplied by a fraction, the numerator of which is the wage base under this chapter and the denominator of which is the estimated United States average annual wage in covered employment for the calendar year in which the determination is to be made, 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. 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, 1980; and, for purposes of such sentence, January 1, 1980, shall be deemed to be the first January 1 occurring after January 1, 1974, and consecutive taxable years in the period commencing January 1, 1980, shall be determined as if the taxable year which begins on January 1, 1980, were the taxable year immediately succeeding the taxable year which began on January 1, 1974. Subparagraph (C) shall not apply with respect to any taxable year to which it would otherwise apply (but subparagraph (B) shall apply to such taxable year) if the Secretary of Labor determines (on or before November 10 of such taxable year) that the State meets the requirements of subsection (f)(2)(B) for such taxable year. (3) 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) and (2) 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 7 1/2 percent of the tax imposed with respect to wages paid by such taxpayer during such year which are attributable to such State. (d) Definitions and special rules relating to subsection (c) (1) Rate of tax deemed to be 6 percent In applying subsection (c), the tax imposed by section 3301 shall be computed at the rate of 6 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 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) to be attributable to such State. (3) Additional taxes inapplicable where advances are repaid before November 10 of taxable year Paragraph (2) 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)(2), 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)(i) for purposes of subparagraph (B) of subsection (c)(2), the total of the wages (as determined without any limitation on amount) attributable to such State subject to contributions under this chapter with respect to such calendar year, and (ii) for purposes of subparagraph (C) of subsection (c)(2), 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)(2), 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)(2), 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)(2) 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)(2)(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. (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 contributions under the unemployment compensation law of a State paid by such other person to the individual or individuals described in paragraph (1). (f) Limitation on credit reduction (1) Limitation In the case of any State which meets the requirements of paragraph (2) with respect to any taxable year the reduction under subsection (c)(2) in credits otherwise applicable to taxpayers subject to the unemployment compensation law of such State shall not exceed the greater of - (A) the reduction which was in effect with respect to such State under subsection (c)(2) for the preceding taxable year, or (B) 0.6 percent of the wages paid by the taxpayer during such taxable year which are attributable to such State. (2) Requirements The requirements of this paragraph are met by any State with respect to any taxable year if the Secretary of Labor determines (on or before November 10 of such taxable year) that - (A) no State action was taken during the 12-month period ending on September 30 of such taxable year (excluding any action required under State law as in effect prior to the date of the enactment of this subsection) which has resulted or will result in a reduction in such State's unemployment tax effort (as defined by the Secretary of Labor in regulations), (B) no State action was taken during the 12-month period ending on September 30 of such taxable year (excluding any action required under State law as in effect prior to the date of the enactment of this subsection) which has resulted or will result in a net decrease in the solvency of the State unemployment compensation system (as defined by the Secretary of Labor in regulations), (C) the State unemployment tax rate for the taxable year equals or exceeds the average benefit cost ratio for calendar years in the 5-calendar year period ending with the last calendar year before the taxable year, and (D) the outstanding balance for such State of advances under title XII of the Social Security Act on September 30 of such taxable year was not greater than the outstanding balance for such State of such advances on September 30 of the third preceding taxable year (or, for purposes of applying this subparagraph to taxable year 1983, September 30, 1981). The requirements of subparagraphs (C) and (D) shall not apply to taxable years 1981 and 1982. (3) Credit reductions for subsequent years If the credit reduction under subsection (c)(2) is limited by reason of paragraph (1) of this subsection for any taxable year, for purposes of applying subsection (c)(2) to subsequent taxable years (including years after 1987), the taxable year for which the credit reduction was so limited (and January 1 thereof) shall not be taken into account. (4) State unemployment tax rate For purposes of this subsection - (A) In general The State unemployment tax rate for any taxable year is the percentage obtained by dividing - (i) the total amount of contributions paid into the State unemployment fund with respect to such taxable year, by (ii) the total amount of the remuneration subject to contributions under the State unemployment compensation law with respect to such taxable year (determined without regard to any limitation on the amount of wages subject to contribution under the State law). (B) Treatment of additional tax under this chapter (i) Taxable year 1983 In the case of taxable year 1983, any additional tax imposed under this chapter with respect to any State by reason of subsection (c)(2) shall be treated as contributions paid into the State unemployment fund with respect to such taxable year. (ii) Taxable year 1984 In the case of taxable year 1984, any additional tax imposed under this chapter with respect to any State by reason of subsection (c)(2) shall (to the extent such additional tax is attributable to a credit reduction in excess of 0.6 of wages attributable to such State) be treated as contributions paid into the State unemployment fund with respect to such taxable year. (5) Benefit cost ratio For purposes of this subsection - (A) In general The benefit cost ratio for any calendar year is the percentage determined by dividing - (i) the sum of the total of the compensation paid under the State unemployment compensation law during such calendar year and any interest paid during such calendar year on advances made to the State under title XII of the Social Security Act, by (ii) the total amount of the remuneration subject to contributions under the State unemployment compensation law with respect to such calendar year (determined without regard to any limitation on the amount of remuneration subject to contribution under the State law). (B) Reimbursable benefits not taken into account For purposes of subparagraph (A), compensation shall not be taken into account to the extent - (i) the State is entitled to reimbursement for such compensation under the provisions of any Federal law, or (ii) such compensation is attributable to services performed for a reimbursing employer. (C) Reimbursing employer The term "reimbursing employer" means any governmental entity or other organization (or group of governmental entities or any other organizations) which makes reimbursements in lieu of contributions to the State unemployment fund. (D) Special rules for years before 1985 (i) Taxable year 1983 For purposes of determining whether a State meets the requirements of paragraph (2)(C) for taxable year 1983, only regular compensation (as defined in section 205 of the Federal-State Extended Unemployment Compensation Act of 1970) shall be taken into account for purposes of determining the benefit ratio for any preceding calendar year before 1982. (ii) Taxable year 1984 For purposes of determining whether a State meets the requirements of paragraph (2)(C) for taxable year 1984, only regular compensation (as so defined) shall be taken into account for purposes of determining the benefit ratio for any preceding calendar year before 1981. (E) Rounding If any percentage determined under subparagraph (A) is not a multiple of .1 percent, such percentage shall be reduced to the nearest multiple of .1 percent. (6) Reports The Secretary of Labor may, by regulations, require a State to furnish such information at such time and in such manner as may be necessary for purposes of this subsection. (7) Definitions and special rules The definitions and special rules set forth in subsection (d) shall apply to this subsection in the same manner as they apply to subsection (c). (8) Partial limitation (A) In the case of a State which would meet the requirements of this subsection for a taxable year prior to 1986 but for its failure to meet one of the requirements contained in subparagraph (C) or (D) of paragraph (2), the reduction under subsection (c)(2) in credits otherwise applicable to taxpayers in such State for such taxable year and each subsequent year (in a period of consecutive years for each of which a credit reduction is in effect for taxpayers in such State) shall be reduced by 0.1 percentage point. (B) In the case of a State which does not meet the requirements of paragraph (2) but meets the requirements of subparagraphs (A) and (B) of paragraph (2) and which also meets the requirements of section 1202(b)(8)(B) of the Social Security Act with respect to such taxable year, the reduction under subsection (c)(2) in credits otherwise applicable to taxpayers in such State for such taxable year and each subsequent year (in a period of consecutive years for each of which a credit reduction is in effect for taxpayers in such State) shall be further reduced by an additional 0.1 percentage point. (C) In no case shall the application of subparagraphs (A) and (B) reduce the credit reduction otherwise applicable under subsection (c)(2) below the limitation under paragraph (1). (g) Credit reduction not to apply when State makes certain repayments (1) In general In the case of any State which meets requirements of paragraph (2) with respect to any taxable year, subsection (c)(2) shall not apply to such taxable year; except that such taxable year (and January 1 of such taxable year) shall (except as provided in subsection (f)(3)) be taken into account for purposes of applying subsection (c)(2) to succeeding taxable years. (2) Requirements The requirements of this paragraph are met by any State with respect to any taxable year if the Secretary of Labor determines that - (A) the repayments during the 1-year period ending on November 9 of such taxable year made by such State of advances under title XII of the Social Security Act are not less than the sum of - (i) the potential additional taxes for such taxable year, and (ii) any advances made to such State during such 1-year period under such title XII, (B) there will be sufficient amounts in the State unemployment fund to pay all compensation during the 3-month period beginning on November 1 of such taxable year without receiving any advance under title XII of the Social Security Act, and (C) there is a net increase in the solvency of the State unemployment compensation system for the taxable year attributable to changes made in the State law after the date on which the first advance taken into account in determining the amount of the potential additional taxes was made (or, if later, after the date of the enactment of this subsection) and such net increase equals or exceeds the potential additional taxes for such taxable year. (3) Definitions For purposes of paragraph (2) - (A) Potential additional taxes The term "potential additional taxes" means, with respect to any State for any taxable year, the aggregate amount of the additional tax which would be payable under this chapter for such taxable year by all taxpayers subject to the unemployment compensation law of such State for such taxable year if paragraph (2) of subsection (c) had applied to such taxable year and any preceding taxable year without regard to this subsection but with regard to subsection (f). (B) Treatment of certain reductions Any reduction in the State's balance under section 901(d)(1) of the Social Security Act shall not be treated as a repayment made by such State. (4) Reports The Secretary of Labor may require a State to furnish such information at such time and in such manner as may be necessary for purposes of paragraph (2). -SOURCE- (Aug. 16, 1954, ch. 736, 68A Stat. 439; Pub. L. 86-778, title V, Sec. 523(b), Sept. 13, 1960, 74 Stat. 980; Pub. L. 87-6, Sec. 14(b), Mar. 24, 1961, 75 Stat. 16; Pub. L. 87-321, Sec. 1(a), Sept. 26, 1961, 75 Stat. 683; Pub. L. 88-31, Sec. 2(b), May 29, 1963, 77 Stat. 51; Pub. L. 88-173, Sec. 1(a)-(c), Nov. 7, 1963, 77 Stat. 305; Pub. L. 91-373, title I, Sec. 142(a), (b), Aug. 10, 1970, 84 Stat. 707; Pub. L. 93-618, title II, Sec. 239(e), Jan. 3, 1975, 88 Stat. 2025; Pub. L. 94-45, title I, Sec. 110(a), title III, Sec. 302, June 30, 1975, 89 Stat. 239, 243; Pub. L. 94-455, title XIX, Secs. 1903(a)(12), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1808, 1834; Pub. L. 95-19, title II, Sec. 201(a), Apr. 12, 1977, 91 Stat. 43; Pub. L. 96-589, Sec. 6(f), Dec. 24, 1980, 94 Stat. 3409; Pub. L. 97-35, title XXIV, Sec. 2406(a), Aug. 13, 1981, 95 Stat. 876; Pub. L. 97-248, title II, Secs. 271(c)(2), (3)(A), (B), 272(a), 273(a), Sept. 3, 1982, 96 Stat. 555-557; Pub. L. 98-21, title V, Secs. 512(a)(1), (b), 513(a)-(c), Apr. 20, 1983, 97 Stat. 146, 147; Pub. L. 99-514, title XVIII, Sec. 1884(1), (2), Oct. 22, 1986, 100 Stat. 2919.) -REFTEXT- REFERENCES IN TEXT The Social Security Act, referred to in subsecs. (c)(2), (f)(2)(D), (5)(A)(i), (8)(B), and (g)(2)(A), (B), (3)(B), is act Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Title XII of the Social Security Act is classified generally to subchapter XII (Sec. 1321 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. Sections 901(d)(1) and 1202(b)(8)(B) of the Social Security Act are classified to sections 1101(d)(1) and 1322(b)(8)(B), respectively, of Title 42. For complete classification of this act to the Code, see section 1305 of Title 42 and Tables. Section 239 of the Trade Act of 1974, referred to in subsec. (c)(3)(A), (B), is classified to subsec. (c)(3) of this section and to section 2311 of Title 19, Customs Duties. The date of the enactment of this subsection, referred to in subsec. (f)(2)(A), (B), means the date of the enactment of Pub. L. 97-35 which was approved Aug. 13, 1981. Section 205 of the Federal-State Extended Unemployment Compensation Act of 1970, referred to in subsec. (f)(5)(D)(i), is section 205 of Pub. L. 91-373, title II, Aug. 10, 1970, 84 Stat. 708, which is set out as a note under section 3304 of this title. The date of the enactment of this subsection, referred to in subsec. (g)(2)(C), means the date of the enactment of Pub. L. 97- 248, which was approved Sept. 3, 1982. -MISC1- AMENDMENTS 1986 - Subsec. (c)(2)(B). Pub. L. 99-514, Sec. 1884(1), substituted "denominator" for second reference to "determination", and in cl. (i) inserted "percent" after "2.7" and struck out "percent" after "is to be made". Subsec. (f)(8)(A). Pub. L. 99-514, Sec. 1884(2), substituted "1986" for "1987". 1983 - Subsec. (c)(2)(B). Pub. L. 98-21, Sec. 513(c), inserted ", multiplied by a fraction, the numerator of which is the State's average annual wage in covered employment for the calendar year in which the determination is made and the determination of which is the wage base under this chapter," in provisions preceding cl. (i). Subsec. (c)(2)(B)(i). Pub. L. 98-21, Sec. 513(b), inserted "multiplied by a fraction, the numerator of which is the wage base under this chapter and the denominator of which is the estimated United States average annual wage in covered employment for the calendar year in which the determination is to be made" after "2.7". Subsec. (d)(4)(B). Pub. L. 98-21, Sec. 513(a), amended subpar. (B) generally, adding cl. (i), designating existing provisions as cl. (ii), and inserting reference to purposes of subsec. (c)(2)(C). Subsec. (f)(1). Pub. L. 98-21, Sec. 512(b), struck out "beginning before January 1, 1988," after "any taxable year". Subsec. (f)(8). Pub. L. 98-21, Sec. 512(a)(1), added par. (8). 1982 - Subsec. (b). Pub. L. 97-248, Sec. 271(c)(2)(A), substituted "5.4 percent" for "2.7 percent". Subsec. (c)(2). Pub. L. 97-248, Sec. 273(a), inserted provision at end that subpar. (C) shall not apply with respect to any taxable year to which it would otherwise apply (but that subpar. (B) would apply to such taxable year) if the Secretary of Labor determines (on or before Nov. 10 of such taxable year) that the State meets the requirements of subsec. (f)(2)(B) of this section for such taxable year. Subsec. (c)(2)(A). Pub. L. 97-248, Sec. 271(c)(3)(A), substituted "5 percent" for "10 percent" in two places. Subsec. (c)(3). Pub. L. 97-248, Sec. 271(c)(3)(B), substituted "7 1/2 percent" for "15 percent" in provisions following subpar. (B). Subsec. (d)(1). Pub. L. 97-248, Sec. 271(c)(2)(B), substituted "6 percent" for "3 percent" in par. heading and text. Subsec. (g). Pub. L. 97-248, Sec. 272(a), added subsec. (g). 1981 - Subsec. (f). Pub. L. 97-35 added subsec. (f). 1980 - Subsec. (a)(5). Pub. L. 96-589 added par. (5). 1977 - Subsec. (c)(2). Pub. L. 95-19 substituted "January 1, 1980" for "January 1, 1978" wherever appearing. 1976 - Subsec. (a)(1). Pub. L. 94-455, Sec. 1903(a)(12)(A), struck out "(10-month period in the case of October 31, 1972)" after "ending on October 31 of such year". Subsec. (b). Pub. L. 94-455, Sec. 1903(a)(12)(B), struck out "(10- month period in the case of October 31, 1972)" after "ending on October 31, of such year" and substituted "12-month period" for "12 or 10-month period, as the case may be,". Subsec. (c)(2). Pub. L. 94-455, Sec. 1903(a)(12)(C)(i), (ii), redesignated par. (3) as (2), struck out "on or after the date of the enactment of the Employment Security Act of 1960" after "title XII of the Social Security Act", and substituted "paragraph (1)" for "paragraphs (1) and (2). Former par. (2), which related to the computation of the reduction of the total credits allowable to a taxpayer with respect to advances made to the unemployment account, was struck out. Subsec. (c)(3), (4). Pub. L. 94-455, Sec. 1903(a)(12)(C)(i), (iii), redesignated par. (4) as (3) and substituted "paragraphs (1) and (2)" for "paragraphs (1), (2), and (3)". Former par. (3) redesignated (2). Subsec. (d)(2). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out "or his delegate" after "Secretary". Subsec. (d)(3). Pub. L. 94-455, Sec. 1903(a)(12)(C)(iv), struck out "or (3)" after "Paragraph (2)". Subsec. (d)(4) to (6). Pub. L. 94-455, Sec. 1903(a)(12(C)(v), substituted "subsection (c)(2)" for "subsection (c)(3)". Subsec. (d)(7). Pub. L. 94-455, Sec. 1903(a)(12)(C)(vi), substituted "subsection (c)(2)(B) or (C)" for "subsection (c)(3)(B) or (C)". Subsec. (d)(8). Pub. L. 94-455, Sec. 1903(a)(12)(D), struck out par. (8) which provided for a cross reference to section 104 of the Temporary Unemployment Compensation Act of 1958 relating to the reduction of total credits allowable under subsec. (c) of this section. 1975 - Subsec. (c)(3). Pub. L. 94-45, Sec. 110(a), provided that par. (3) shall not be applicable with respect to the taxable year beginning Jan. 1, 1975, or any succeeding taxable year which begins before Jan. 1, 1978, and that, for the purposes of par. (3), Jan. 1, 1978, shall be deemed to be the first Jan. 1 occurring after Jan. 1, 1974, and consecutive taxable years in the period commencing Jan. 1, 1978, shall be determined as if the taxable year which begins Jan. 1, 1978, were the taxable year immediately succeeding the taxable year which began on Jan. 1, 1974. Subsec. (c)(4). Pub. L. 94-45, Sec. 302, substituted "July 15, 1975" for "July 1, 1975". Pub. L. 93-618 added par. (4). 1970 - Subsec. (a)(1). Pub. L. 91-373, Sec. 142(a), substituted "certified as provided in section 3304 for the 12-month period ending on October 31 of such year (10-month period in the case of October 31, 1972)" for "certified for the taxable year as provided in section 3304". Subsec. (b). Pub. L. 91-373, Sec. 142(b), changed the certification date from December 31 to October 31, with a provision for a 10-month period in the case of October 31, 1972, and provided for certification based on a 12-month period ending each October 31. 1963 - Subsec. (c). Pub. L. 88-173, in cl. (2), substituted "on January 1, 1963 (and in the case of any succeeding taxable year beginning before January 1, 1968)," for "with the fourth consecutive January 1", in subpar. (A), and "on or after January 1, 1968," for "with a consecutive January 1", in subpar. (B), and inserted paragraph following subpar. (B). Subsec. (d)(1). Pub. L. 88-31 substituted "the rate provided by such section" for "3.1 percent (or, in the case of the tax imposed with respect to the calendar years 1962 and 1963, in lieu of 3.5 percent)". 1961 - Subsec. (d)(1). Pub. L. 87-6 provided for computation of the tax at the rate of 3 percent in lieu of 3.5 percent for calendar years 1962 and 1968. Subsec. (e). Pub. L. 87-321 added subsec. (e). 1960 - Subsec. (c). Pub. L. 86-778 restricted cl. (2) to advances made before the date of the enactment of the Employment Security Act of 1960, added cl. (3), and struck out provisions which related to the attributing of wages to a particular State, which provisions are now covered by subsec. (d)(2). Subsec. (d). Pub. L. 86-778 added subsec. (d). EFFECTIVE DATE OF 1983 AMENDMENT Section 512(a)(2) of Pub. L. 98-21 provided that: "The amendment made by paragraph (1) [amending this section] shall apply with respect to taxable year 1983 and taxable years thereafter." Section 513(d) of Pub. L. 98-21 provided that: "The amendments made by this section [amending this section] shall be effective for taxable year 1983 and taxable years thereafter." EFFECTIVE DATE OF 1982 AMENDMENT Amendment by section 271(c)(2), (3)(A), (B) of Pub. L. 97-248 applicable to remuneration paid after Dec. 31, 1984, see section 271(d)(2) of Pub. L. 97-248, as amended, set out as a note under section 3301 of this title. Section 272(b) of Pub. L. 97-248 provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1982." Section 273(b) of Pub. L. 97-248 provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1982." EFFECTIVE DATE OF 1981 AMENDMENT Section 2406(b) of Pub. L. 97-35 provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1980." EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96-589 effective Oct. 1, 1979, but not to apply to proceedings under Title 11, Bankruptcy, commenced before Oct. 1, 1979, see section 7(e) of Pub. L. 96-589, set out as a note under section 108 of this title. EFFECTIVE DATE OF 1970 AMENDMENT Section 142(i) of Pub. L. 91-373 provided that: "The amendments made by this section [amending this section and sections 3303 and 3304 of this title] shall apply with respect to the taxable year 1972 and taxable years thereafter." EFFECTIVE DATE OF 1963 AMENDMENT Section 1(d) of Pub. L. 88-173 provided that: "The amendments made by subsections (a), (b), and (c) of this section [amending this section] shall apply only with respect to taxable years beginning on or after January 1, 1963." EFFECTIVE DATE OF 1961 AMENDMENT Section 1(b) of Pub. L. 87-321 provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to the calendar year 1961 and each calendar year thereafter." EXTENSION OF PERIOD FOR REPAYMENT OF FEDERAL LOANS TO STATE UNEMPLOYMENT FUNDS Pub. L. 102-318, title III, Sec. 304, July 3, 1992, 106 Stat. 298, provided that: "(a) General Rule. - If the Secretary of Labor determines that a State meets the requirements of subsection (b), paragraph (2) of section 3302(c) of the Internal Revenue Code of 1986 shall be applied with respect to such State for taxable years after 1991 - "(1) by substituting 'third' for 'second' in subparagraph (A)(i), "(2) by substituting 'fourth or fifth' for 'third or fourth' in subparagraph (B), and "(3) by substituting 'sixth' for 'fifth' in subparagraph (C). "(b) Requirements. - A State meets the requirements of this subsection if, during calendar year 1992 or 1993, the State amended its unemployment compensation law to increase estimated contributions required under such law by at least 25 percent. "(c) Special Rule. - This section shall not apply to any taxable year after 1994 unless - "(1) such taxable year is in a series of consecutive taxable years as of the beginning of each of which there was a balance referred to in section 3302(c)(2) of such Code, and "(2) such series includes a taxable year beginning in 1992, 1993, or 1994." PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989 For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or title XVIII [Secs. 1800-1899A] of Pub. L. 99-514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99-514, as amended, set out as a note under section 401 of this title. TRANSITIONAL RULE FOR CERTAIN EMPLOYEES AND SMALL BUSINESSES Section 271(d)(3), (4), formerly 271(b)(3), of Pub. L. 97-248, as redesignated and amended by Pub. L. 98-601, Sec. 1(a), Oct. 30, 1984, 98 Stat. 3147; Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "(3) Transitional rule for certain employees. - "(A) In general. - Notwithstanding section 3303 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], in the case of taxable years beginning after December 31, 1984, and before January 1, 1989, a taxpayer shall be allowed the additional credit under section 3302(b) of such Code with respect to any employee covered by a qualified specific industry provision if the requirements of subparagraph (B) are met with respect to such employee. "(B) Requirements. - The requirements of this subparagraph are met for any taxable year with respect to any employee covered by a specific industry provision if the amount of contributions required to be paid for the taxable year to the unemployment fund of the State with respect to such employee are not less than the product of the required rate multiplied by the wages paid by the employer during the taxable year. "(C) Required rate. - For purposes of subparagraph (B), the required rate for any taxable year is the sum of - "(i) the rate at which contributions were required to be made under the specific industry provision as in effect on August 10, 1982, and "(ii) the applicable percentage of the excess of 5.4 percent over the rate described in clause (i). "(D) Applicable percentage. - For purposes of subparagraph (C), the term 'applicable percentage' means - "(i) 20 percent in the case of taxable year 1985, "(ii) 40 percent in the case of taxable year 1986, "(iii) 60 percent in the case of taxable year 1987, and "(iv) 80 percent in the case of taxable year 1988. "(E) Qualified specific industry provision. - For purposes of this paragraph, the term, 'qualified specific industry provision' means a provision contained in a State unemployment compensation law (as in effect on August 10, 1982) - "(i) which applies to employees in a specific industry or to an otherwise defined type of employees, and "(ii) under which employers may elect to make contributions at a specified rate (without experience rating) which exceeds 2.7 percent. "(4) Transitional rule for certain small businesses. - "(A) In general. - Notwithstanding section 3303 of the Internal Revenue Code of 1986, in the case of taxable years beginning after December 31, 1984, and before January 1, 1989, a taxpayer shall be allowed the additional credit under section 3302(b) of such Code with respect to any employee covered by a qualified small business provision if the requirements of subparagraph (B) are met with respect to such employee. "(B) Requirements. - The requirements of this subparagraph are met for any taxable year with respect to any employee covered by a qualified small business provision if the amount of contributions required to be paid for the taxable year to the unemployment fund of the State with respect to such employee are not less than the product of the required rate multiplied by the wages paid by the employer during the taxable year. "(C) Required rate. - For purposes of subparagraph (B), the required rate for any taxable year is the sum of - "(i) 3.1 percent, plus "(ii) the applicable percentage (as defined in paragraph (3)(D)) of the excess of 5.4 percent over the rate described in clause (i). "(D) Qualified small business provision. - For purposes of this paragraph, the term 'qualified small business provision' means a provision contained in a State unemployment compensation law (as in effect on the date of the enactment of this paragraph [Oct. 30, 1984]) which provides a maximum rate at which an employer is subject to contribution for wages paid during a calendar quarter if the total wages paid by such employer during such calendar quarter are less than $50,000. "(E) Definition. - For purposes of this paragraph, the term 'wages' means the remuneration subject to contributions under the State unemployment compensation law, except that for purposes of subparagraph (D) the amount of total wages paid by an employer shall be determined without regard to any limitation on the amount subject to contribution." [Section 1(b) of Pub. L. 98-601 provided that: "The amendment made by subsection (a) [amending section 271(d) of Pub. L. 97-248, set out above] shall apply to remuneration paid after December 31, 1984."] FINDINGS OF SECRETARY OF LABOR CONCERNING STEPS TAKEN BY STATES AS PREREQUISITE TO SUSPENSION UNTIL JANUARY 1, 1980, OF AUTOMATIC INCREASES IN FEDERAL UNEMPLOYMENT TAX Section 201(b) of Pub. L. 95-19 provided that extension under section 201(a) of Pub. L. 95-19 (amending this section) from Jan. 1, 1978, to Jan. 1, 1980, not to apply to any State unless the Secretary of Labor finds that such State meets the requirement of section 110(b) of Emergency Compensation and Special Unemployment Assistance Extension Act of 1975. FISCAL SOUNDNESS OF STATE UNEMPLOYMENT ACCOUNT IN UNEMPLOYMENT TRUST FUND; UNPAID LOANS TO STATES; FINDINGS OF SECRETARY OF LABOR CONCERNING STEPS TAKEN BY STATES AS PREREQUISITE TO 1975-1977 SUSPENSION OF AUTOMATIC INCREASES IN FEDERAL UNEMPLOYMENT TAX Section 110(b) of Pub. L. 94-45 provided that: "(1) The amendment made by subsection (a) [amending this section] shall not be applicable in the case of any State unless the Secretary of Labor finds that such State has studied and taken appropriate action with respect to the financing of its unemployment programs so as substantially to accomplish the purpose of restoring the fiscal soundness of the State's unemployment account in the Unemployment Trust Fund and permitting the repayment within a reasonable time of any advances made to such account under title XII of the Social Security Act [section 1321 et seq. of Title 42, The Public Health and Welfare]. For purposes of the preceding sentence, appropriate action with respect to the financing of a State's unemployment programs means an increase in the State's unemployment tax rate, an increase in the State's unemployment tax base, a change in the experience rating formulas, or a combination thereof. "(2) The Secretary of Labor shall promptly prescribe and publish in the Federal Register regulations setting forth the criteria according to which he will determine the requirements of the preceding paragraph. "(3) Immediately after he makes a determination with respect to any State under paragraph (1), the Secretary of Labor shall publish such determination, together with his reasons therefor, in the Federal Register." -End- -CITE- 26 USC Sec. 3303 01/02/2006 -EXPCITE- TITLE 26 - INTERNAL REVENUE CODE Subtitle C - Employment Taxes CHAPTER 23 - FEDERAL UNEMPLOYMENT TAX ACT -HEAD- Sec. 3303. Conditions of additional credit allowance -STATUTE- (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 2 1/2 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 2 1/2 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. For any person (or group of persons) who has (or have) not been subject to the State law for a period of time sufficient to compute the reduced rates permitted by paragraphs (1), (2), and (3) of this subsection on a 3-year basis (i) the period of time required may be reduced to the amount of time the person (or group of persons) has (or have) had experience under or has (or have) been subject to the State law, whichever is appropriate, but in no case less than 1 year immediately preceding the computation date, or (ii) a reduced rate (not less than 1 percent) may be permitted by the State law on a reasonable basis other than as permitted by paragraph (1), (2), or (3). (b) Certification by the Secretary of Labor with respect to additional credit allowance (1) On October 31 of each calendar year, the Secretary of Labor shall certify to the Secretary of the Treasury the law of each State (certified by the Secretary of Labor as provided in section 3304 for the 12-month period ending on such October 31), with respect to which he finds that reduced rates of contributions were allowable with respect to such 12-month period only in accordance with the provisions of subsection (a). (2) If the Secretary of Labor finds that under the law of a single State (certified by the Secretary of Labor as provided in section 3304) more than one type of fund or account is maintained, and reduced rates of contributions to more than one type of fund or account were allowable with respect to any 12-month period ending on October 31, and one or more of such reduced rates were allowable under conditions not fulfilling the requirements of subsection (a), the Secretary of Labor shall, on such October 31, certify to the Secretary of the Treasury only those provisions of the State law pursuant to which reduced rates of contributions were allowable with respect to such 12-month period under conditions fulfilling the requirements of subsection (a), and shall, in connection therewith, designate the kind of fund or account, as defined in subsection (c), established by the provisions so certified. If the Secretary of Labor finds that a part of any reduced rate of contributions payable under such law or under such provisions is required to be paid into one fund or account and a part into another fund or account, the Secretary of Labor shall make such certification pursuant to this paragraph as he finds will assure the allowance of additional credits only with respect to that part of the reduced rate of contributions which is allowed under provisions which do fulfill the requirements of subsection (a). (3) The Secretary of Labor shall, within 30 days after any State law is submitted to him for such purpose, certify to the State agency his findings with respect to reduced rates of contributions to a type of fund or account, as defined in subsection (c), which are allowable under such State law only in accordance with the provisions of subsection (a). After making such findings, the Secretary of Labor shall not withhold his certification to the Secretary of the Treasury of such State law, or of the provisions thereof with respect to which such findings were made, for any 12- month period ending on October 31 pursuant to paragraph (1) or (2) unless, after reasonable notice and opportunity for hearing to the State agency, the Secretary of Labor finds the State law no longer contains the provisions specified in subsection (a) or the State has, with respect to such 12-month period, failed to comply substantially with any such provision. (c) Definitions As used in this section - (1) Reserve account The term "reserve account" means a separate account in an unemployment fund, maintained with respect to a person (or group of persons) having individuals in his (or their) employ, from which account, unless such account is exhausted, is paid all and only compensation payable on the basis of services performed for such person (or for one or more of the persons comprising the group). (2) Pooled fund The term "pooled fund" means an unemployment fund or any part thereof (other than a reserve account or a guaranteed employment account) into which the total contributions of persons contributing thereto are payable, in which all contributions are mingled and undivided, and from which compensation is payable to all individuals eligible for compensation from such fund. (3) Partially pooled account The term "partially pooled account" means a part of an unemployment fund in which part of the fund all contributions thereto are mingled and undivided, and from which part of the fund compensation is payable only to individuals to whom compensation would be payable from a reserve account or from a guaranteed employment account but for the exhaustion or termination of such reserve account or of such guaranteed employment account. Payments from a reserve account or guaranteed employment account into a partially pooled account shall not be construed to be inconsistent with the provisions of paragraph (1) or (4). (4) Guaranteed employment account The term "guaranteed employment account" means a separate account, in an unemployment fund, maintained with respect to a person (or group of persons) having individuals in his (or their) employ who, in accordance with the provisions of the State law or of a plan thereunder approved by the State agency, (A) guarantees in advance at least 30 hours of work, for which remuneration will be paid at not less than stated rates, for each of 40 weeks (or if more, 1 weekly hour may be deducted for each added week guaranteed) in a year, to all the individuals who are in his (or their) employ in, and who continue to be available for suitable work in, one or more distinct establishments, except that any such individual's guaranty may commence after a probationary period (included within the 11 or less consecutive weeks immediately following the first week in which the individual renders services), and (B) gives security or assurance, satisfactory to the State agency, for the fulfillment of such guaranties, from which account, unless such account is exhausted or terminated, is paid all and only compensation, payable on the basis of services performed for such person (or for one or more of the persons comprising the group), to any such individual whose guaranteed remuneration has not been paid (either pursuant to the guaranty or from the security or assurance provided for the fulfillment of the guaranty), or whose guaranty is not renewed and who is otherwise eligible for compensation under the State law. (5) Year The term "year" means any 12 consecutive calendar months. (6) Balance The term "balance", with respect to a reserve account or a guaranteed employment account, means the amount standing to the credit of the account as of the computation date; except that, if subsequent to January 1, 1940, any moneys have been paid into or credited to such account other than payments thereto by persons having individuals in their employ, such term shall mean the amount in such account as of the computation date less the total of such other moneys paid into or credited to such account subsequent to January 1, 1940. (7) Computation date The term "computation date" means the date, occurring at least once in each calendar year and within 27 weeks prior to the effective date of new rates of contributions, as of which such rates are computed. (8) Reduced rate The term "reduced rate" means a rate of contributions lower than the standard rate applicable under the State law, and the term "standard rate" means the rate on the basis of which variations therefrom are computed. (d) Voluntary contributions A State law may, without being deemed to violate the standards set forth in subsection (a), permit voluntary contributions to be used in the computation of reduced rates if such contributions are paid prior to the expiration of 120 days after the beginning of the year for which such rates are effective. (e) Payments by certain nonprofit organizations A State may, without being deemed to violate the standards set forth in subsection (a), permit an organization (or a group of organizations) described in section 501(c)(3) which is exempt from income tax under section 501(a) to elect (in lieu of paying contributions) to pay into the State unemployment fund amounts equal to the amounts of compensation attributable under the State law to service performed in the employ of such organization (or group). (f) Transition To facilitate the orderly transition to coverage of service to which section 3309(a)(1)(A) applies, a State law may provide that an organization (or group of organizations) which elects before April 1, 1972, to make payments (in lieu of contributions) into the State unemployment fund as provided in section 3309(a)(2), and which had paid contributions into such fund under the State law with respect to such service performed in its employ before January 1, 1969, is not required to make any such payment (in lieu of contributions) on account of compensation paid after its election as heretofore described which is attributable under the State law to service performed in its employ, until the total of such compensation equals the amount - (1) by which the contributions paid by such organization (or group) with respect to a period before the election provided by section 3309(a)(2), exceed (2) the unemployment compensation for the same period which was charged to the experience-rating account of such organization (or group) or paid under the State law on the basis of wages paid by it or service performed in its employ, whichever is appropriate. (g) Transitional rule for Unemployment Compensation Amendments of 1976 To facilitate the orderly transition to coverage of service to which section 3309(a)(1)(A) applies by reason of the enactment of the Unemployment Compensation Amendments of 1976, a State law may provide that an organization (or group of organizations) which elects, when such election first becomes available under the State law with respect to such service, to make payments (in lieu of contributions) into the State unemployment fund as provided in section 3309(a)(2), and which had paid contributions into such fund under the State law with respect to such service performed in its employ before the date of the enactment of this subsection, is not required to make any such payment (in lieu of contributions) on account of compensation paid after its election as heretofore described which is attributable under the State law to such service performed in its employ, until the total of such compensation equals the amount - (1) by which the contributions paid by such organization (or group) on the basis of wages for such service with respect to a period before the election provided by section 3309(a)(2), exceed (2) the unemployment compensation for the same period which was charged to the experience-rating account of such organization (or group) or paid under the State law on the basis of such service performed in its employ or wages paid for such service, whichever is appropriate. -SOURCE- (Aug. 16, 1954, ch. 736, 68A Stat. 440; Sept. 1, 1954, ch. 1212, Sec. 2, 68 Stat. 1130; Pub. L. 91-373, title I, Secs. 104(c), 122(a), 142(c)-(e), Aug. 10, 1970, 84 Stat. 699, 702, 707; Pub. L. 94-455, title XIX, Secs. 1903(a)(13), 1906(b)(13)(C), Oct. 4, 1976, 90 Stat. 1809, 1834; Pub. L. 94-566, title I, Sec. 122(a), (b), Oct. 20, 1976, 90 Stat. 2675, 2676.) -REFTEXT- REFERENCES IN TEXT The Unemployment Compensation Amendments of 1976, referred to in subsec. (g), is Pub. L. 94-566, Oct. 20, 1976, 90 Stat. 2667, as amended. For complete classification of this Act to the Code, see Short Title of 1976 Amendment note set out under section 3311 of this title and Tables. The date of enactment of this subsection, referred to in subsec. (g), is the date of enactment of Pub. L. 94-566, which was approved Oct. 20, 1976. -MISC1- AMENDMENTS 1976 - Subsec. (b)(1) to (3). Pub. L. 94-455 substituted reference to Secretary of the Treasury for reference to Secretary and reference to 12-month period for reference to 12 or 10-month period, as the case may be, and struck out reference to (10-month period in the case of Oct. 31, 1972) following provisions relating to 12-month period ending Oct. 31. Subsec. (f). Pub. L. 94-566, Sec. 122(b), substituted "which elects before April 1, 1972," for "which elects, when such election first becomes available under the State law,". Subsec. (g). Pub. L. 94-566, Sec. 122(a), added subsec. (g). 1970 - Subsec. (a). Pub. L. 91-373, Sec. 122(a), added to provision following par. (3) the authorization for the allowance of a reduced rate by State law (but not less than 1 percent) on a reasonable basis other than as permitted by par. (1), (2), or (3). Subsec. (b). Pub. L. 91-373, Sec. 142(c)-(e), changed the certification date referred to in pars. (1) to (3) from Dec. 31 to Oct. 31, with provision for a 10-month period in the case of Oct. 31, 1972, and, except for Oct. 31, 1972, provided for a 12-month period ending on Oct. 31 each year. Subsecs. (e), (f). Pub. L. 91-373, Sec. 104(c), added subsecs. (e) and (f). 1954 - Subsec. (a). Act Sept. 1, 1954, inserted sentence relating to reduced rates for new employers. EFFECTIVE DATE OF 1976 AMENDMENTS Section 122(c) of Pub. L. 94-566 provided that: "The amendment made by subsection (a) [amending this section] shall take effect on the date of the enactment of this Act [Oct. 20, 1976]. The amendment made by subsection (b) [amending this section] shall take effect on January 1, 1970." Amendment by section 1903(a)(13) of Pub. L. 94-455 applicable with respect to wages paid after Dec. 31, 1976, see section 1903(d) of Pub. L. 94-455, set out as a note under section 3101 of this title. EFFECTIVE DATE OF 1970 AMENDMENT Amendment by section 104(c) of Pub. L. 91-373 [amending this section] to take effect Jan. 1, 1970, see section 104(d)(1) of Pub. L. 91-373, set out as a note under section 3304 of this title. Section 122(b) of Pub. L. 91-373 provided that: "The amendments made by subsection (a) [amending this section] shall apply with respect to taxable years beginning after December 31, 1971." Amendment by section 142(c)-(e) of Pub. L. 91-373 applicable with respect to taxable year 1972 and taxable years thereafter, see section 142(i) of Pub. L. 91-373, set out as a note under section 3302 of this title. EFFECTIVE DATE OF 1954 AMENDMENT Section 2 of act Sept. 1, 1954, provided that the amendment made by that section is effective after Dec. 31, 1954. TREATMENT OF CERTAIN CHARITABLE ORGANIZATIONS RETROACTIVELY DETERMINED TO BE DESCRIBED IN SECTION 501(C)(3) OF THIS TITLE Pub. L. 98-21, title V, Sec. 524, Apr. 20, 1983, 97 Stat. 149, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "If - "(1) an organization did not make an election to make payments (in lieu of contributions) as provided in section 3309(a)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] before April 1, 1972, because such organization, as of such date, was treated as an organization described in section 501(c)(4) of such Code, "(2) the Internal Revenue Service subsequently determined that such organization was described in section 501(c)(3) of such Code, and "(3) such organization made such an election before the earlier of - "(A) the date 18 months after such election was first available to it under the State law, or "(B) January 1, 1984, then section 3303(f) of such Code shall be applied with respect to such organization as if it did not contain the requirement that the election be made before April 1, 1972, and by substituting 'January 1, 1982' for 'January 1, 1969'." -End- -CITE- 26 USC Sec. 3304 01/02/2006 -EXPCITE- TITLE 26 - INTERNAL REVENUE CODE Subtitle C - Employment Taxes CHAPTER 23 - FEDERAL UNEMPLOYMENT TAX ACT -HEAD- Sec. 3304. Approval of State laws -STATUTE- (a) Requirements The Secretary of Labor shall approve any State law submitted to him, within 30 days of such submission, which he finds provides that - (1) all compensation is to be paid through public employment offices or such other agencies as the Secretary of Labor may approve; (2) no compensation shall be payable with respect to any day of unemployment occurring within 2 years after the first day of the first period with respect to which contributions are required; (3) all money received in the unemployment fund shall (except for refunds of sums erroneously paid into such fund and except for refunds paid in accordance with the provisions of section 3305(b)) immediately upon such receipt be paid over to the Secretary of the Treasury to the credit of the Unemployment Trust Fund established by section 904 of the Social Security Act (42 U.S.C. 1104); (4) all money withdrawn from the unemployment fund of the State shall be used solely in the payment of unemployment compensation, exclusive of expenses of administration, and for refunds of sums erroneously paid into such fund and refunds paid in accordance with the provisions of section 3305(b); except that - (A) an amount equal to the amount of employee payments into the unemployment fund of a State may be used in the payment of cash benefits to individuals with respect to their disability, exclusive of expenses of administration; (B) the amounts specified by section 903 (c)(2) or 903(d)(4) of the Social Security Act may, subject to the conditions prescribed in such section, be used for expenses incurred by the State for administration of its unemployment compensation law and public employment offices; (C) nothing in this paragraph shall be construed to prohibit deducting an amount from unemployment compensation otherwise payable to an individual and using the amount so deducted to pay for health insurance, or the withholding of Federal, State, or local individual income tax, if the individual elected to have such deduction made and such deduction was made under a program approved by the Secretary of Labor; (D) amounts may be deducted from unemployment benefits and used to repay overpayments as provided in section 303(g) of the Social Security Act; (E) amounts may be withdrawn for the payment of short-time compensation under a plan approved by the Secretary of Labor; and (F) amounts may be withdrawn for the payment of allowances under a self-employment assistance program (as defined in section 3306(t)); (5) compensation shall not be denied in such State to any otherwise eligible individual for refusing to accept new work under any of the following conditions: (A) if the position offered is vacant due directly to a strike, lockout, or other labor dispute; (B) if the wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality; (C) if as a condition of being employed the individual would be required to join a company union or to resign from or refrain from joining any bona fide labor organization; (6)(A) compensation is payable on the basis of service to which section 3309(a)(1) applies, in the same amount, on the same terms, and subject to the same conditions as compensation payable on the basis of other service subject to such law; except that - (i) with respect to services in an instructional, research, or principal administrative capacity for an educational institution to which section 3309(a)(1) applies, compensation shall not be payable based on such services for any week commencing during the period between two successive academic years or terms (or, when an agreement provides instead for a similar period between two regular but not successive terms, during such period) to any individual if such individual performs such services in the first of such academic years (or terms) and if there is a contract or reasonable assurance that such individual will perform services in any such capacity for any educational institution in the second of such academic years or terms, (ii) with respect to services in any other capacity for an educational institution to which section 3309(a)(1) applies - (I) compensation payable on the basis of such services may be denied to any individual for any week which commences during a period between 2 successive academic years or terms if such individual performs such services in the first of such academic years or terms and there is a reasonable assurance that such individual will perform such services in the second of such academic years or terms, except that (II) if compensation is denied to any individual for any week under subclause (I) and such individual was not offered an opportunity to perform such services for the educational institution for the second of such academic years or terms, such individual shall be entitled to a retroactive payment of the compensation for each week for which the individual filed a timely claim for compensation and for which compensation was denied solely by reason of subclause (I), (iii) with respect to any services described in clause (i) or (ii), compensation payable on the basis of such services shall be denied to any individual for any week which commences during an established and customary vacation period or holiday recess if such individual performs such services in the period immediately before such vacation period or holiday recess, and there is a reasonable assurance that such individual will perform such services in the period immediately following such vacation period or holiday recess, (iv) with respect to any services described in clause (i) or (ii), compensation payable on the basis of services in any such capacity shall be denied as specified in clauses (i), (ii), and (iii) to any individual who performed such services in an educational institution while in the employ of an educational service agency, and for this purpose the term "educational service agency" means a governmental agency or governmental entity which is established and operated exclusively for the purpose of providing such services to one or more educational institutions, (v) with respect to services to which section 3309(a)(1) applies, if such services are provided to or on behalf of an educational institution, compensation may be denied under the same circumstances as described in clauses (i) through (iv), and (vi) with respect to services described in clause (ii), clauses (iii) and (iv) shall be applied by substituting "may be denied" for "shall be denied", and (B) payments (in lieu of contributions) with respect to service to which section 3309(a)(1) applies may be made into the State unemployment fund on the basis set forth in section 3309(a)(2); (7) an individual who has received compensation during his benefit year is required to have had work since the beginning of such year in order to qualify for compensation in his next benefit year; (8) compensation shall not be denied to an individual for any week because he is in training with the approval of the State agency (or because of the application, to any such week in training, of State law provisions relating to availability for work, active search for work, or refusal to accept work); (9)(A) compensation shall not be denied or reduced to an individual solely because he files a claim in another State (or a contiguous country with which the United States has an agreement with respect to unemployment compensation) or because he resides in another State (or such a contiguous country) at the time he files a claim for unemployment compensation; (B) the State shall participate in any arrangements for the payment of compensation on the basis of combining an individual's wages and employment covered under the State law with his wages and employment covered under the unemployment compensation law of other States which are approved by the Secretary of Labor in consultation with the State unemployment compensation agencies as reasonably calculated to assure the prompt and full payment of compensation in such situations. Any such arrangement shall include provisions for (i) applying the base period of a single State law to a claim involving the combining of an individual's wages and employment covered under two or more State laws, and (ii) avoiding duplicate use of wages and employment by reason of such combining; (10) compensation shall not be denied to any individual by reason of cancellation of wage credits or total reduction of his benefit rights for any cause other than discharge for misconduct connected with his work, fraud in connection with a claim for compensation, or receipt of disqualifying income; (11) extended compensation shall be payable as provided by the Federal-State Extended Unemployment Compensation Act of 1970; (12) no person shall be denied compensation under such State law solely on the basis of pregnancy or termination of pregnancy; (13) compensation shall not be payable to any individual on the basis of any services, substantially all of which consist of participating in sports or athletic events or training or preparing to so participate, for any week which commences during the period between two successive sport seasons (or similar periods) if such individual performed such services in the first of such seasons (or similar periods) and there is a reasonable assurance that such individual will perform such services in the later of such seasons (or similar periods); (14)(A) compensation shall not be payable on the basis of services performed by an alien unless such alien is an individual who was lawfully admitted for permanent residence at the time such services were performed, was lawfully present for purposes of performing such services, or was permanently residing in the United States under color of law at the time such services were performed (including an alien who was lawfully present in the United States as a result of the application of the provisions of section 212(d)(5) of the Immigration and Nationality Act), (B) any data or information required of individuals applying for compensation to determine whether compensation is not payable to them because of their alien status shall be uniformly required from all applicants for compensation, and (C) in the case of an individual whose application for compensation would otherwise be approved, no determination by the State agency that compensation to such individual is not payable because of his alien status shall be made except upon a preponderance of the evidence; (15) the amount of compensation payable to an individual for any week which begins after March 31, 1980, and which begins in a period with respect to which such individual is receiving a governmental or other pension, retirement or retired pay, annuity, or any other similar periodic payment which is based on the previous work of such individual shall be reduced (but not below zero) by an amount equal to the amount of such pension, retirement or retired pay, annuity, or other payment, which is reasonably attributable to such week except that - (A) the requirements of this paragraph shall apply to any pension, retirement or retired pay, annuity, or other similar periodic payment only if - (i) such pension, retirement or retired pay, annuity, or similar payment is under a plan maintained (or contributed to) by a base period employer or chargeable employer (as determined under applicable law), and (ii) in the case of such a payment not made under the Social Security Act or the Railroad Retirement Act of 1974 (or the corresponding provisions of prior law), services performed for such employer by the individual after the beginning of the base period (or remuneration for such services) affect eligibility for, or increase the amount of, such pension, retirement or retired pay, annuity, or similar payment, and (B) the State law may provide for limitations on the amount of any such a reduction to take into account contributions made by the individual for the pension, retirement or retired pay, annuity, or other similar periodic payment; (16)(A) wage information contained in the records of the agency administering the State law which is necessary (as determined by the Secretary of Health and Human Services in regulations) for purposes of determining an individual's eligibility for assistance, or the amount of such assistance, under a State program funded under part A of title IV of the Social Security Act, shall be made available to a State or political subdivision thereof when such information is specifically requested by such State or political subdivision for such purposes, (B) wage and unemployment compensation information contained in the records of such agency shall be furnished to the Secretary of Health and Human Services (in accordance with regulations promulgated by such Secretary) as necessary for the purposes of the National Directory of New Hires established under section 453(i) of the Social Security Act, and (C) such safeguards are established as are necessary (as determined by the Secretary of Health and Human Services in regulations) to insure that information furnished under subparagraph (A) or (B) is used only for the purposes authorized under such subparagraph; (17) any interest required to be paid on advances under title XII of the Social Security Act shall be paid in a timely manner and shall not be paid, directly or indirectly (by an equivalent reduction in State unemployment taxes or otherwise) by such State from amounts in such State's unemployment fund; (18) Federal individual income tax from unemployment compensation is to be deducted and withheld if an individual receiving such compensation voluntarily requests such deduction and withholding; and (19) all the rights, privileges, or immunities conferred by such law or by acts done pursuant thereto shall exist subject to the power of the legislature to amend or repeal such law at any time. (b) Notification The Secretary of Labor shall, upon approving such law, notify the governor of the State of his approval. (c) Certification On October 31 of each taxable year the Secretary of Labor shall certify to the Secretary of the Treasury each State whose law he has previously approved, except that he shall not certify any State which, after reasonable notice and opportunity for hearing to the State agency, the Secretary of Labor finds has amended its law so that it no longer contains the provisions specified in subsection (a) or has with respect to the 12-month period ending on such October 31 failed to comply substantially with any such provision in such subsection. No finding of a failure to comply substantially with any provision in paragraph (5) of subsection (a) shall be based on an application or interpretation of State law (1) until all administrative review provided for under the laws of the State has been exhausted, or (2) with respect to which the time for judicial review provided by the laws of the State has not expired, or (3) with respect to which any judicial review is pending. On October 31 of any taxable year, the Secretary of Labor shall not certify any State which, after reasonable notice and opportunity for hearing to the State agency, the Secretary of Labor finds has failed to amend its law so that it contains each of the provisions required by law to be included therein (including provisions relating to the Federal-State Extended Unemployment Compensation Act of 1970 (or any amendments thereto) as required under subsection (a)(11)), or has, with respect to the twelve-month period ending on such October 31, failed to comply substantially with any such provision. (d) Notice of noncertification If at any time the Secretary of Labor has reason to believe that a State whose law he has previously approved may not be certified under subsection (c), he shall promptly so notify the governor of such State. (e) Change of law during 12-month period Whenever - (1) any provision of this section, section 3302, or section 3303 refers to a 12-month period ending on October 31 of a year, and (2) the law applicable to one portion of such period differs from the law applicable to another portion of such period, then such provision shall be applied by taking into account for each such portion the law applicable to such portion. (f) Definition of institution of higher education For purposes of subsection (a)(6), the term "institution of higher education" means an educational institution in any State which - (1) admits as regular students only individuals having a certificate of graduation from a high school, or the recognized equivalent of such a certificate; (2) is legally authorized within such State to provide a program of education beyond high school; (3) provides an educational program for it which awards a bachelor's or higher degree, or provides a program which is acceptable for full credit toward such a degree, or offers a program of training to prepare students for gainful employment in a recognized occupation; and (4) is a public or other nonprofit institution. -SOURCE- (Aug. 16, 1954, ch. 736, 68A Stat. 443; Pub. L. 91-373, title I, Secs. 104(a), 108(a), 121(a), 131(b)(2), 142(f)-(h), title II, Sec. 206, Aug. 10, 1970, 84 Stat. 697, 701, 704, 707, 708, 712; Pub. L. 94-455, title XIX, Secs. 1903(a)(14), 1906(b)(13)(C), (E), Oct. 4, 1976, 90 Stat. 1809, 1834; Pub. L. 94-566, title I, Sec. 115(c)(1), (5), title III, Secs. 312(a), (b), 314(a), title V, Sec. 506(b), Oct. 20, 1976, 90 Stat. 2670, 2671, 2679, 2680, 2687; Pub. L. 95- 19, title III, Sec. 302(a), (c), (e), Apr. 12, 1977, 91 Stat. 44, 45; Pub. L. 95-171, Sec. 2(a), Nov. 12, 1977, 91 Stat. 1353; Pub. L. 95-216, title IV, Sec. 403(b), Dec. 20, 1977, 91 Stat. 1561; Pub. L. 96-364, title IV, Sec. 414(a), Sept. 26, 1980, 94 Stat. 1310; Pub. L. 97-35, title XXIV, Sec. 2408(a), Aug. 13, 1981, 95 Stat. 880; Pub. L. 97-248, title I, Sec. 193(a), Sept. 3, 1982, 96 Stat. 408; Pub. L. 98-21, title V, Secs. 515(b), 521(a), 523(a), Apr. 20, 1983, 97 Stat. 147, 148; Pub. L. 99-272, title XII, Sec. 12401(b)(1), Apr. 7, 1986, 100 Stat. 297; Pub. L. 99-514, title XVIII, Sec. 1899A(43), Oct. 22, 1986, 100 Stat. 2960; Pub. L. 101- 649, title I, Sec. 162(e)(4), Nov. 29, 1990, 104 Stat. 5011; Pub. L. 102-164, title III, Sec. 302(a), Nov. 15, 1991, 105 Stat. 1059; Pub. L. 102-318, title IV, Sec. 401(a)(1), July 3, 1992, 106 Stat. 298; Pub. L. 103-182, title V, Sec. 507(b)(1), Dec. 8, 1993, 107 Stat. 2154; Pub. L. 103-465, title VII, Sec. 702(b), (c)(1), Dec. 8, 1994, 108 Stat. 4997; Pub. L. 104-193, title I, Sec. 110(l)(1), formerly Sec. 110(l)(2), title III, Sec. 316(g)(2), Aug. 22, 1996, 110 Stat. 2173, 2218, renumbered Pub. L. 105-33, title V, Sec. 5514(a)(2), Aug. 5, 1997, 111 Stat. 620; Pub. L. 107-147, title II, Sec. 209(d)(1), Mar. 9, 2002, 116 Stat. 33.) -REFTEXT- REFERENCES IN TEXT The Social Security Act, referred to in subsec. (a)(4)(B), (D), (15)(A)(ii), (16)(A), (B), (17), is act Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended, which is classified generally to chapter 7 (Sec. 301 et seq.) of Title 42, The Public Health and Welfare. Part A of title IV and title XII of the Act are classified generally to part A (Sec. 601 et seq.) of subchapter IV and subchapter XII (Sec. 1321 et seq.), respectively, of chapter 7 of Title 42. Sections 303(g), 453(i), and 903(c)(2), (d)(4) of the Act are classified to sections 503(g), 653(i), and 1103(c)(2), (d)(4), respectively, of Title 42. For complete classification of this Act to the Code, see Short Title note set out under section 1305 of Title 42 and Tables. The Federal-State Extended Unemployment Compensation Act of 1970, referred to in subsecs. (a)(11) and (c), is Pub. L. 91-373, title II, Aug. 10, 1970, 84 Stat. 708, as amended, which is set out as a note below. Section 212(d)(5) of the Immigration and Nationality Act, referred to in subsec. (a)(14)(A), is classified to section 1182(d)(5) of Title 8, Aliens and Nationality. The Railroad Retirement Act of 1974, referred to in subsec. (a)(15)(A)(ii), is act Aug. 29, 1935, ch. 812, as amended generally by Pub. L. 93-445, title I, Sec. 101, Oct. 16, 1974, 88 Stat. 1305, which is classified generally to subchapter IV (Sec. 231 et seq.) of chapter 9 of Title 45, Railroads. For further details and complete classification of this Act to the Code, see Codification note set out preceding section 231 of Title 45, section 231t of Title 45, and Tables. -MISC1- AMENDMENTS 2002 - Subsec. (a)(4)(B). Pub. L. 107-147 inserted "or 903(d)(4)" before "of the Social Security Act". 1996 - Subsec. (a)(16)(A). Pub. L. 104-193, Sec. 316(g)(2)(C), struck out "and" at end. Pub. L. 104-193, Sec. 316(g)(2)(A), substituted "Secretary of Health and Human Services" for "Secretary of Health, Education, and Welfare". Pub. L. 104-193, Sec. 110(l)(1), formerly Sec. 110(l)(2), as renumbered by Pub. L. 105-33, substituted "eligibility for assistance, or the amount of such assistance, under a State program funded" for "eligibility for aid or services, or the amount of such aid or services, under a State plan for aid and services to needy families with children approved". Subsec. (a)(16)(B). Pub. L. 104-193, Sec. 316(g)(2)(E), added subpar. (B). Former subpar. (B) redesignated (C). Pub. L. 104-193, Sec. 316(g)(2)(B), substituted "information furnished under subparagraph (A) or (B) is used only for the purposes authorized under such subparagraph;" for "such information is used only for the purposes authorized under subparagraph (A);". Pub. L. 104-193, Sec. 316(g)(2)(A), substituted "Secretary of Health and Human Services" for "Secretary of Health, Education, and Welfare". Subsec. (a)(16)(C). Pub. L. 104-193, Sec. 316(g)(2)(D), redesignated subpar. (B) as (C). 1994 - Subsec. (a)(4)(C). Pub. L. 103-465, Sec. 702(c)(1), inserted ", or the withholding of Federal, State, or local individual income tax," after "health insurance". Subsec. (a)(17) to (19). Pub. L. 103-465, Sec. 702(b), struck out "and" at end of par. (17), added par. (18), and redesignated former par. (18) as (19). 1993 - Subsec. (a)(4)(F). Pub. L. 103-182 added subpar. (F). 1992 - Subsec. (a)(4)(E). Pub. L. 102-318 added subpar. (E). 1991 - Subsec. (a)(6)(A)(ii)(I). Pub. L. 102-164, Sec. 302(a)(1), substituted "may be denied" for "shall be denied". Subsec. (a)(6)(A)(iii), (iv). Pub. L. 102-164, Sec. 302(a)(2), which directed that "and" be struck out at end of cls. (iii) and (iv), could be executed only to cl. (iv) because "and" did not appear at end of cl. (iii). Subsec. (a)(6)(A)(vi). Pub. L. 102-164, Sec. 302(a)(2), added cl. (vi). 1990 - Subsec. (a)(14)(A). Pub. L. 101-649 struck out reference to section 203(a)(7) of Immigration and Nationality Act. 1986 - Subsec. (a)(4)(D). Pub. L. 99-272 added subpar. (D). Subsec. (a)(6)(A)(iii). Pub. L. 99-514 struck out "and" at end. 1983 - Subsec. (a)(4)(C). Pub. L. 98-21, Sec. 523(a), added subpar. (C). Subsec. (a)(6)(A)(ii)(I), (iii), (iv). Pub. L. 98-21, Sec. 521(a)(2), substituted "shall be denied" for "may be denied". Subsec. (a)(6)(A)(v). Pub. L. 98-21, Sec. 521(a)(1), added cl. (v). Subsec. (a)(17), (18). Pub. L. 98-21, Sec. 515(b), added par. (17) and redesignated former par. (17) as (18). 1982 - Subsec. (a)(6)(A)(ii). Pub. L. 97-248 redesignated existing provisions as provisions preceding subcl. (I) and subcl. (I), and in such provisions as so redesignated, struck out "(other than an institution of higher education)" after "capacity for an educational institution", substituted "2" for "two", and inserted "except that" at end of subcl. (I), and added subcl. (II). 1981 - Subsec. (c). Pub. L. 97-35 substituted provisions relating to limitations on certification on Oct. 31 of any taxable year, for provisions relating to limitations on certification on Oct. 31 of any taxable year after 1971, and on Oct. 31 of any taxable year after 1977. 1980 - Subsec. (a)(15). Pub. L. 96-364 inserted provisions relating to applicability to any pension, retirement or retired pay, annuity, or other similar periodic payment. 1977 - Subsec. (a)(6)(A)(i). Pub. L. 95-19, Sec. 302(c)(1), (2), inserted a comma between "instructional" and "research", substituted "two successive academic years or terms" for "two successive academic years", and struck out "and" after "the second of such academic years or terms,". Subsec. (a)(6)(A)(iii). Pub. L. 95-19, Sec. 302(c)(3), added cl. (iii). Subsec. (a)(6)(A)(iv). Pub. L. 95-171 added cl. (iv). Subsec. (a)(14)(A). Pub. L. 95-19, Sec. 302(a), substituted "who was lawfully admitted for permanent residence at the time such services were performed, was lawfully present for purposes of performing such services, or was permanently residing in the United States under color of law at the time such services were performed (including an alien who was" for "who has been lawfully admitted for permanent residence or otherwise is permanently residing in the United States under color of law (including an alien who is". Subsec. (a)(15). Pub. L. 95-19, Sec. 302(e), substituted "March 31, 1980" for "September 30, 1979". Subsec. (a)(16), (17). Pub. L. 95-216 added par. (16). Former par. (16) redesignated (17). 1976 - Subsec. (a)(3). Pub. L. 94-455, Secs. 1903(a)(14)(A), 1906(b)(13)(C), inserted "of the Treasury" after "to the Secretary" and struck out "49 Stat. 640; 52 Stat. 1104, 1105;" before "42 U.S.C. 1104". Subsec. (a)(6)(A). Pub. L. 94-566, Sec. 115(c)(1), designated existing provisions as cl. (i), added cl. (ii), and in cl. (i) as so designated substituted "educational institution" for "institution of higher education", "an agreement provides" for "the contract provides", and "if such individual performs such services in the first of such academic years (or terms) and if there is a contract or reasonable assurance that such individual will perform services in any such capacity for any educational institution in the second of such academic years or terms, and" for "who has a contract to perform services in any such capacity for any institution or institutions of higher education for both of such academic years or both of such terms, and". Subsec. (a)(6)(B). Pub. L. 94-566, Sec. 506(b), substituted "section 3309(a)(1)" for "section 3309(a)(1)(A)". Subsec. (a)(12). Pub. L. 94-566, Sec. 312(a), substituted provisions that no person shall be denied compensation under such State law solely on the basis of pregnancy or termination of pregnancy for provisions that each political subdivision of the State should have the right to elect to have compensation payable to employees thereof (whose services were not otherwise subject to such law) based on service performed by such employees in the hospitals and institutions of higher education (as defined in section 3309(d)) operated by such political subdivision; and, if any such political subdivision did elect to have compensation payable to such employees thereof (A) the political subdivision elected should pay into the State unemployment fund, with respect to the service of such employees, payments (in lieu of contributions), and (B) such employees would be entitled to receive, on the basis of such service, compensation payable on the same conditions as compensation which was payable on the basis of similar service for the State which was subject to such law. Subsec. (a)(13) to (16). Pub. L. 94-566, Sec. 314(a), added pars. (13) to (15) and redesignated former par. (13) as (16). Subsec. (c). Pub. L. 94-566, Sec. 312(b), provided that on Oct. 31 of any taxable year after 1977, the Secretary shall not certify any State which, after reasonable notice and opportunity for a hearing to the State agency, the Secretary of Labor finds has failed to amend its law so that it contains each of the provisions required by reason of the enactment of the Unemployment Compensation Amendments of 1976 to be included therein, or has with respect to the 12-month period ending on such Oct. 31, failed to comply substantially with any such provision. Pub. L. 94-455, Secs. 1903(a)(14)(B), 1906(b)(13)(C), (E), inserted "of the Treasury" after "certify to the Secretary", substituted "the Secretary of Labor shall" for "the Secretary shall" and struck out "(10-month period in the case of October 31, 1972)" after "to the 12-month period". Subsec. (f). Pub. L. 94-566, Sec. 115(c)(5), added subsec. (f). 1970 - Subsec. (a)(6) to (13). Pub. L. 91-373, Secs. 104(a), 108(a), 121(a), 206, added pars. (6) to (12) and redesignated former par. (6) as (13). Subsec. (c). Pub. L. 91-373, Sec. 131(b)(2), clarified provisions governing procedure to be followed with respect to a finding of the Secretary of Labor that a state has failed to comply substantially with any of the provisions of subsec. (a)(5). Pub. L. 91-373, Sec. 142(f), substituted "October 31" for "December 31" as certification date and "12-month period ending on such October 31" for "taxable year" and prohibited certifications for failure to amend State laws to contain provisions required by reason of enactment of the Employment Security Amendments of 1970. Subsec. (d). Pub. L. 91-373, Sec. 142(g), substituted "If at any time" for "If, at any time during the taxable year,". Subsec. (e). Pub. L. 91-373, Sec. 142(h), added subsec. (e). EFFECTIVE DATE OF 1996 AMENDMENT Amendment by section 110(l)(1) of Pub. L. 104-193 effective July 1, 1997, with transition rules relating to State options to accelerate such date, rules relating to claims, actions, and proceedings commenced before such date, rules relating to closing out of accounts for terminated or substantially modified programs and continuance in office of Assistant Secretary for Family Support, and provisions relating to termination of entitlement under AFDC program, see section 116 of Pub. L. 104-193, as amended, set out as an Effective Date note under section 601 of Title 42, The Public Health and Welfare. For effective date of amendment by section 316(g)(2) of Pub. L. 104-193, see section 395(a)-(c) of Pub. L. 104-193, set out as a note under section 654 of Title 42. EFFECTIVE DATE OF 1994 AMENDMENT Section 702(d) of Pub. L. 103-465 provided that: "The amendments made by this section [amending this section, sections 3306 and 3402 of this title, and section 503 of Title 42, The Public Health and Welfare] shall apply to payments made after December 31, 1996." EFFECTIVE DATE OF 1991 AMENDMENT Section 302(b) of Pub. L. 102-164 provided that: "The amendments made by this section [amending this section] section shall apply in the case of compensation paid for weeks beginning on or after the date of the enactment of this Act [Nov. 15, 1991]." EFFECTIVE DATE OF 1990 AMENDMENT Amendment by Pub. L. 101-649 effective Oct. 1, 1991, and applicable beginning with fiscal year 1992, see section 161(a) of Pub. L. 101-649, set out as a note under section 1101 of Title 8, Aliens and Nationality. EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99-272 applicable to recoveries made on or after Apr. 7, 1986, and applicable with respect to overpayments made before, on, or after such date, see section 12401(c) of Pub. L. 99-272, set out as a note under section 503 of Title 42, The Public Health and Welfare. EFFECTIVE DATE OF 1983 AMENDMENT Section 521(b) of Pub. L. 98-21 provided that: "(1) Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply in the case of compensation paid for weeks beginning on or after April 1, 1984. "(2) In the case of a State with respect to which the Secretary of Labor has determined that State legislation is required in order to comply with the amendment made by this section, the amendment made by this section shall apply in the case of compensation paid for weeks which begin on or after April 1, 1984, and after the end of the first session of the State legislature which begins after the date of the enactment of this Act [Apr. 20, 1983], or which began prior to the date of the enactment of this Act and remained in session for at least twenty-five calendar days after such date of enactment. For purposes of the preceding sentence, the term 'session' means a regular, special, budget, or other session of a State legislature." Section 523(c) of Pub. L. 98-21 provided that: "The amendments made by this section [amending this section and section 503 of Title 42, The Public Health and Welfare] shall take effect on the date of the enactment of this Act [Apr. 20, 1983]." EFFECTIVE DATE OF 1982 AMENDMENT Section 193(b) of Pub. L. 97-248, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "(1) The amendment made by subsection (a) [amending this section] shall apply to weeks of unemployment beginning after the date of the enactment of this Act [Sept. 3, 1982]. "(2) The amendment made by subsection (a) [amending this section], insofar as it requires retroactive payments of compensation to employees of educational institutions other than institutions of higher education (as defined in section 3304(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), shall not be a requirement for any State law before January 1, 1984." EFFECTIVE DATE OF 1980 AMENDMENT Section 414(b) of Pub. L. 96-364 provided that: "The amendment made by subsection (a) [amending this section] shall apply to certifications of States for 1981 and subsequent years." EFFECTIVE DATE OF 1977 AMENDMENTS Section 403(d) of Pub. L. 95-216 provided that: "The amendments made by this section [enacting section 611 of Title 42, The Public Health and Welfare, and amending this section and section 602 of Title 42] shall be effective on the date of the enactment of this Act [Dec. 20, 1977]." Section 2(b) of Pub. L. 95-171 provided that: "The amendments made by subsection (a) [amending this section] shall apply with respect to weeks of unemployment which begin after December 31, 1977." Section 302(d)(1) of Pub. L. 95-19 provided that: "The amendment made by subsection (a) [amending this section] shall take effect as if included in the amendment made by section 314 of the Unemployment Compensation Amendments of 1976." Section 302(d)(3) of Pub. L. 95-19 provided that: "The amendments made by subsection (c) [amending this section] shall take effect as if included in the amendments made by section 115(c) of the Unemployment Compensation Amendments of 1976." EFFECTIVE DATE OF 1976 AMENDMENTS Section 115(d) of Pub. L. 94-566, as amended by Pub. L. 95-19, title III, Sec. 301(a), Apr. 12, 1977, 91 Stat. 43, effective Oct. 20, 1976, provided that: "(1) Except as provided in paragraph (2), the amendments made by this section [amending this section and section 3309 of this title] shall apply with respect to certifications of States for 1978 and subsequent years; except that - "(A) the amendments made by subsections (a) and (b) [amending section 3309 of this title] shall only apply with respect to services performed after December 31, 1977; and "(B) the amendments made by subsection (c) [amending this section and section 3309 of this title] shall only apply with respect to weeks of unemployment which begin after December 31, 1977. "(2) In the case of any State the legislature of which does not meet in a regular session which closes during the calendar year 1977, the amendments made by subsection (c) [amending this section and section 3309 of this title] shall only apply with respect to weeks of unemployment which begin after December 31, 1978 (or if earlier, the date provided by State law)." Section 116(f) of Pub. L. 94-566, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "Effective dates. - "(1) Subsections (a), (c) and (d). - The amendments made by subsections (a), (c), and (d) [amending sections 202 and 205 of Pub. L. 91-373 and section 102 of Pub. L. 93-57 set out below, section 49d of Title 29, Labor, and section 1301 of Title 42, The Public Health and Welfare] shall take effect on the later of October 1, 1976, or the day after the day on which the Secretary of Labor approves under section 3304(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] an unemployment compensation law submitted to him by the Virgin Islands for approval. "(2) Subsection (b). - The amendments made by subsection (b) [amending section 3306 of this title] shall apply with respect to remuneration paid after December 31 of the year in which the Secretary of Labor approves for the first time an unemployment compensation law submitted to him by the Virgin Islands for approval, for services performed after such December 31. "(3) Subsection (e). - The amendments made by subsection (e) [amending sections 8501, 8503, 8504, 8521, and 8522 of Title 5, Government Organization and Employees] shall apply with respect to benefit years beginning on or after the later of October 1, 1976, or the first day of the first week for which compensation becomes payable under an unemployment compensation law of the Virgin Islands which is approved by the Secretary of Labor under section 3304(a) of the Internal Revenue Code of 1986." Section 312(c) of Pub. L. 94-566, as amended by Pub. L. 95-19, title III, Sec. 301(b), Apr. 12, 1977, 91 Stat. 43, effective Oct. 20, 1976, provided that: "(1) Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply with respect to certifications of States for 1978 and subsequent years. "(2) In the case of any State the legislature of which does not meet in a regular session which closes during the calendar year 1977, the amendments made by this section [amending this section] shall apply with respect to the certification of such State for 1979 and subsequent years." Section 314(b) of Pub. L. 94-566 provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to certifications of States for 1978 and subsequent years, or for 1979 and subsequent years in the case of States the legislatures of which do not meet in a regular session which closes in the calendar year 1977." Section 506(c) of Pub. L. 94-566, as amended by Pub. L. 95-19, title III, Sec. 301(c), Apr. 12, 1977, 91 Stat. 44, effective Oct. 20, 1976, provided that: "(1) Except as provided in paragraph (2), the amendments made by this section [amending this section and section 3309 of this title] shall apply with respect to certifications of States for 1978 and subsequent years, but only with respect to services performed after December 31, 1977. "(2) In the case of any State the legislature of which does not meet in a regular session which closes during the calendar year 1977, the amendments made by this section [amending this section and section 3309 of this title] shall apply with respect to the certification of such State for 1979 and subsequent years, but only with respect to services performed after December 31, 1978." [Section 301(d) of Pub. L. 95-19 provided that: "The amendments made by this section [amending this Effective Date of 1976 Amendment note in three places] shall take effect on October 20, 1976."] EFFECTIVE DATE OF 1970 AMENDMENT Section 104(d) of Pub. L. 91-373, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "(1) Subject to the provisions of paragraph (2), the amendments made by subsections (a) and (b) [amending this section and enacting section 3309 of this title] shall apply with respect to certifications of State laws for 1972 and subsequent years, but only with respect to service performed after December 31, 1971. The amendment made by subsection (c) [amending section 3303 of this title] shall take effect January 1, 1970. "(2) Section 3304(a)(6) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a) of this section) shall not be a requirement for the State law of any State prior to July 1, 1972, if the legislature of such State does not meet in a regular session which closes during the calendar year 1971." Section 108(b) of Pub. L. 91-373, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to certification of State laws for 1972 and subsequent years; except that section 3304(a)(12) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) shall not be a requirement for the State law of any State prior to July 1, 1972, if the legislature of such State does not meet in a regular session which closes during the calendar year 1971, or prior to January 1, 1975, if compliance with such requirement would necessitate a change in the constitution of such State." Section 121(b) of Pub. L. 91-373, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "(1) Subject to the provisions of paragraph (2), the amendments made by subsection (a) [amending this section] shall take effect January 1, 1972, and shall apply to the taxable year 1972 and taxable years thereafter. "(2) Paragraphs (7) through (10) of section 3304(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a) of this section) shall not be requirements for the State law of any State prior to July 1, 1972, if the legislature of such State does not meet in a regular session which closes during the calendar year 1971." Amendment by section 142(f)-(h) of Pub. L. 91-373 applicable with respect to taxable year 1972 and taxable years thereafter, see section 142(i) of Pub. L. 91-373, set out as a note under section 3302 of this title. ADDITIONAL TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION FOR DISPLACED AIRLINE RELATED WORKERS Pub. L. 108-11, title IV, Sec. 4002, Apr. 16, 2003, 117 Stat. 607, provided that: "(a) Definitions. - For purposes of this section - "(1) the term 'eligible individual' means an individual whose eligibility for temporary extended unemployment compensation under the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 21) [title II of Pub. L. 107- 147, set out as a note below], as amended by Public Law 108-1 (117 Stat. 3), is or would be based on the exhaustion of regular compensation under State law, entitlement to which was based in whole or in part on qualifying employment performed during such individual's base period; "(2) the term 'qualifying employment', with respect to an eligible individual, means employment - "(A) with an air carrier, employment at a facility at an airport, or with an upstream producer or supplier for an air carrier; and "(B) as determined by the Secretary, separation from which was due, in whole or in part, to - "(i) reductions in service by an air carrier as a result of a terrorist action or security measure; "(ii) a closure of an airport in the United States as a result of a terrorist action or security measure; or "(iii) a military conflict with Iraq that has been authorized by Congress; "(3) the term 'air carrier' means an air carrier that holds a certificate issued under chapter 411 of title 49, United States Code; "(4) the term 'upstream producer' means a firm that performs additional, value-added, production processes, including firms that perform final assembly, finishing, or packaging of articles, for another firm; "(5) the term 'supplier' means a firm that produces component parts for, or articles and contract services considered to be a part of the production process or services for, another firm; "(6) the term 'Secretary' means the Secretary of Labor; and "(7) the term 'terrorist action or security measure' means a terrorist attack on the United States on September 11, 2001, or a security measure taken in response to such attack. "(b) Additional Temporary Extended Unemployment Compensation for Eligible Individual. - In the case of an eligible individual, the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 21), as amended by Public Law 108-1 (117 Stat. 3), shall be applied as if it had been amended in accordance with subsection (c). "(c) Modifications. - "(1) In general. - For purposes of subsection (b), the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 21), as amended by Public Law 108-1 (117 Stat. 3), shall be treated as if it had been amended as provided in this subsection. "(2) Program extension. - Deem section 208 of the Temporary Extended Unemployment Compensation Act of 2002, as amended by Public Law 108-1 (117 Stat. 3), to be amended to read as follows: " 'SEC. 208. APPLICABILITY. " '(a) In General. - Subject to subsection (b), an agreement entered into under this title shall apply to weeks of unemployment - " '(1) beginning after the date on which such agreement is entered into; and " '(2) ending before December 29, 2003. " '(b) Transition for Amount Remaining in Account. - " '(1) In general. - Subject to paragraph (2), in the case of an individual who has amounts remaining in an account established under section 203 as of December 28, 2003, temporary extended unemployment compensation shall continue to be payable to such individual from such amounts for any week beginning after such date for which the individual meets the eligibility requirements of this title, including such compensation payable by reason of amounts deposited in such account after su