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U.S. Code as of:
01/19/04
Section 363. Exclusiveness of provisions; transfers from State unemployment compensation accounts to railroad unemployment insurance account
(a) Omitted
(b) Effect on State unemployment compensation laws
By enactment of this chapter the Congress makes exclusive
provision for the payment of unemployment benefits for unemployment
occurring after June 30, 1939, and for the payment of sickness
benefits for sickness periods after June 30, 1947, based upon
employment (as defined in this chapter). No employee shall have or
assert any right to unemployment benefits under an unemployment
compensation law of any State with respect to unemployment
occurring after June 30, 1939, or to sickness benefits under a
sickness law of any State with respect to sickness periods
occurring after June 30, 1947, based upon employment (as defined in
this chapter). The Congress finds and declares that by virtue of
the enactment of this chapter, the application of State
unemployment compensation laws after June 30, 1939 or of State
sickness laws after June 30, 1947, to such employment, except
pursuant to section 362(g) of this title, would constitute an undue
burden upon, and an undue interference with the effective
regulation of, interstate commerce. In furtherance of such
determination, after June 30, 1939, the term "person" as used in
section 1106 of title 42 shall not be construed to include any
employer (as defined in this chapter) or any person in its employ:
Provided, That no provision of this chapter shall be construed to
affect the payment of unemployment benefits with respect to any
period prior to July 1, 1939, under an unemployment compensation
law of any State based upon employment performed prior to July 1,
1939, and prior to such date employment as defined in this chapter
shall not constitute "Service with respect to which unemployment
compensation is payable under an [or "service under any"]
unemployment compensation system [or "plan"] established by an Act
of Congress" [or "a law of the United States"] or "employment in
interstate commerce, of an individual who is covered by an
unemployment compensation system established directly by an Act of
Congress," or any term of similar import, used in any unemployment
compensation law of any State.
(c) Determination of "preliminary amount" for States
The Social Security Board is directed to determine for each
State, after agreement with the Railroad Retirement Board, and
after consultation with such State; the total (hereinafter referred
to as the "preliminary amount") of (i) the amount remaining as the
balances of reserve accounts of employers as of June 30, 1939, if
the unemployment compensation law of such State provides for a type
of fund known as "Reserve Accounts," plus (ii) if the unemployment
compensation law of such State provides for a type of fund known as
"Pooled Fund" or "Pooled Account," that proportion of the balance
of such fund or account of such State as of June 30, 1939, as the
amount of taxes or contributions collected from employers and their
employees prior to July 1, 1939, pursuant to its unemployment
compensation law and credited to such fund or account bears to all
such taxes or contributions theretofore collected from all persons
subject to its unemployment compensation law and credited to such
fund or account; and the additional amounts (hereinafter referred
to as the "liquidating amount") of taxes or contributions collected
from employers and their employees from July 1, 1939 to December
31, 1939, pursuant to its unemployment compensation law.
(d) Withholding amounts from certification to States; transfers to
railroad unemployment compensation account
The Social Security Board shall withhold from certification to
the Secretary of the Treasury for payment the amounts determined by
it pursuant to section 502(a) of title 42 to be necessary for the
proper administration of each State's unemployment-compensation
law, until an amount equal to its "preliminary amount" plus
interest from July 1, 1939, at 2 1/2 per centum per annum on such
portion thereof as has not been used as the measure for withholding
certification for payment, has been so withheld from certification
pursuant to this paragraph: Provided, however, That if a State
shall, prior to whichever is the later of (i) thirty days after the
close of the first regular session of its legislature which begins
after the approval of this chapter, and (ii) July 1, 1939,
authorize and direct the Secretary of the Treasury to transfer from
its account in the unemployment trust fund to the railroad
unemployment insurance account in the unemployment trust fund an
amount equal to its "preliminary amount", no amount shall be
withheld from certification for payment to such State pursuant to
this paragraph.
The Social Security Board shall withhold from certification to
the Secretary of the Treasury for payment the amounts determined by
it pursuant to section 502(a) of title 42 to be necessary for the
proper administration of each State's unemployment compensation
law, until an amount equal to its "liquidating amount" plus
interest from January 1, 1940, at 2 1/2 per centum per annum on
such portion thereof as has not been used as the measure for
withholding certification for payment has been so withheld from
certification pursuant to this paragraph: Provided, however, That
if a State shall, prior to whichever is the later of (i) thirty
days after the close of the first regular session of its
legislature which begins after the approval of this chapter, and
(ii) January 1, 1940, authorize and direct the Secretary of the
Treasury to transfer from its account in the unemployment trust
fund to the railroad unemployment insurance account in the
unemployment trust fund an amount equal to its "liquidating
amount", no amount shall be withheld from certification for payment
to such State pursuant to this paragraph.
The withholdings from certification directed in each of the
foregoing paragraphs of this subsection shall begin with respect to
each State when the Social Security Board finds that such State is
unable to avail itself of the condition set forth in the proviso
contained in such paragraph: Provided, however, That if the Social
Security Board finds with respect to any State that such State (1)
is unable to avail itself of such conditions solely by reason of
prohibitions contained in the constitution of such State, as
determined by a decision of the highest court of such State
declaring invalid in whole or in part the action of the legislature
of the State purporting to provide for transfers from the State's
account in the Unemployment Trust Fund to the railroad unemployment
insurance account, and (2) for similar reasons is unable to use
amounts withdrawn from its account in the Unemployment Trust Fund
for the payment of expenses incurred in the administration of its
State unemployment compensation law, the Social Security Board
shall not begin to withhold from certification to the Secretary of
the Treasury for payment to such State the amounts determined by it
pursuant to section 502 of title 42 and to certify to the Secretary
of the Treasury for payment into the railroad unemployment
insurance account the amount so withheld from such State until July
1, 1944, or until a date one hundred and eighty days after the
adjournment of the first session of the legislature of such State
beginning after July 1, 1942, whichever date is the earlier, and
then only if the Social Security Board finds that such State had
not prior thereto effectively authorized and directed the Secretary
of the Treasury to transfer from such State's account in the
Unemployment Trust Fund to the railroad unemployment insurance
account amounts equal to such State's "preliminary amount" and
"liquidating amount" less such parts thereof, if any, as the State
may have, within the periods set forth in the provisos contained in
the first two paragraphs of this subsection, effectively authorized
and directed the Secretary of the Treasury so to transfer, plus
interest on such difference, if any, with respect to each amount,
at 2 1/2 per centum per annum from the date the State's
"preliminary amount" or "liquidating amount", as the case may be,
is determined by the Social Security Board; and with respect to any
such State the amount withheld shall equal the State's "preliminary
amount" and "liquidating amount" less such parts thereof, if any,
as the State may have, within the periods set forth in the provisos
contained in the first two paragraphs of this subsection
effectively authorized and directed the Secretary of the Treasury
to transfer, plus interest from July 1, 1939, at 2 1/2 per centum
per annum on so much of the "preliminary amount" and "liquidating
amount", as the case may be, as has not been so transferred or has
not been used as the measure for withholding. An enactment of any
State legislature providing for the transfer (from the State's
account in the Unemployment Trust Fund to the railroad unemployment
insurance account) of all interest earned upon contributions which
are collected with respect to employment occurring after such
enactment by such State pursuant to its unemployment compensation
law and credited to its account in the Unemployment Trust Fund
(until the total of such transfers equals the amounts which
otherwise would be required to be withheld from certification under
this subsection), shall be deemed an effective authorization and
direction to the Secretary of the Treasury as required by this
subsection; and for purposes of computing the interest to be so
transferred, amounts withdrawn by such State from its account in
the Unemployment Trust Fund after the date of such State enactment
shall be considered to be first charged against the amounts
credited to such State's account prior to the date of such State
enactment: Provided, however, That if at any time after such
enactment the provision for transfer therein contained for any
reason fails to be operative to effect the transfers of interest as
therein prescribed, and such State has not otherwise made an
effective authorization and direction to the Secretary of the
Treasury as required by this subsection, the Social Security Board
shall immediately after such failure or, on the date otherwise
provided in this subsection for the beginning of withholdings from
certification, whichever is later, begin to make the withholdings
from certification provided for in this subsection in the same
manner and to the same extent as if such enactment by such State
had not been enacted, except that the amounts of the certifications
withheld shall be reduced by the total amount, if any, which has
been transferred from interest pursuant to such enactment.
(e) Transfers and withdrawals, effect upon social security
provisions
The transfers described in the provisos contained in the several
paragraphs of subsection (d) of this section shall not be deemed to
constitute a breach of the conditions set forth in sections
503(a)(5) and 1103(a)(4) of title 42; nor shall the withdrawal by a
State from its account in the unemployment trust fund of amounts,
but not to exceed the total amount the Social Security Board shall
have withheld from certification with respect to such State
pursuant to subsection (d) of this section, be deemed to constitute
a breach of the conditions set forth in sections 503(a)(5) and
1103(a)(4) of title 42, provided the moneys so withdrawn are
expended solely for expenses which the Social Security Board
determines to be necessary for the proper administration of such
State's unemployment compensation law.
(f) Payments to railroad unemployment insurance account; transfers
from unemployment trust fund of States
The Social Security Board is authorized and directed to certify
to the Secretary of the Treasury for payment, and the Secretary
shall pay, into the railroad unemployment insurance account, such
amounts as the Social Security Board withholds from certification
pursuant to subsection (d) of this section and the appropriations
authorized in section 501 of title 42 shall be available for
payments authorized by this subsection. The Secretary shall
transfer from the account of a State in the unemployment trust fund
to the railroad unemployment insurance account in the unemployment
trust fund such amounts as the State authorizes and directs him so
to transfer pursuant to subsection (d) of this section.
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