
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC1104]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
       SUBCHAPTER IX--EMPLOYMENT SECURITY ADMINISTRATIVE FINANCING
 
Sec. 1104. Unemployment Trust Fund


(a) Establishment

    There is hereby established in the Treasury of the United States a 
trust fund to be known as the ``Unemployment Trust Fund'', hereinafter 
in this subchapter called the ``Fund''. The Secretary of the Treasury is 
authorized and directed to receive and hold in the Fund all moneys 
deposited therein by a State agency from a State unemployment fund, or 
by the Railroad Retirement Board to the credit of the railroad 
unemployment insurance account or the railroad unemployment insurance 
administration fund, or otherwise deposited in or credited to the Fund 
or any account therein. Such deposit may be made directly with the 
Secretary of the Treasury, with any depositary \1\ designated by him for 
such purpose, or with any Federal Reserve Bank.
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    \1\ So in original. Probably should be ``depository''.
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(b) Investments

    It shall be the duty of the Secretary of the Treasury to invest such 
portion of the Fund as is not, in his judgment, required to meet current 
withdrawals. Such investment may be made only in interest-bearing 
obligations of the United States or in obligations guaranteed as to both 
principal and interest by the United States. For such purpose such 
obligations may be acquired (1) on original issue at the issue price, or 
(2) by purchase of outstanding obligations at the market price. The 
purposes for which obligations of the United States may be issued under 
chapter 31 of title 31 are hereby extended to authorize the issuance at 
par of special obligations exclusively to the Fund. Such special 
obligations shall bear interest at a rate equal to the average rate of 
interest, computed as of the end of the calendar month next preceding 
the date of such issue, borne by all interest-bearing obligations of the 
United States then forming part of the public debt; except that where 
such average rate is not a multiple of one-eighth of 1 per centum, the 
rate of interest of such special obligations shall be the multiple of 
one-eighth of 1 per centum next lower than such average rate. 
Obligations other than such special obligations may be acquired for the 
Fund only on such terms as to provide an investment yield not less than 
the yield which would be required in the case of special obligations if 
issued to the Fund upon the date of such acquisition. Advances made to 
the Federal unemployment account pursuant to section 1323 of this title 
shall not be invested.

(c) Sale or redemption of obligations

    Any obligations acquired by the Fund (except special obligations 
issued exclusively to the Fund) may be sold at the market price, and 
such special obligations may be redeemed at par plus accrued interest.

(d) Treatment of interest and proceeds

    The interest on, and the proceeds from the sale or redemption of, 
any obligations held in the Fund shall be credited to and form a part of 
the Fund.

(e) Separate book accounts

    The Fund shall be invested as a single fund, but the Secretary of 
the Treasury shall maintain a separate book account for each State 
agency, the employment security administration account, the Federal 
unemployment account, the railroad unemployment insurance account, and 
the railroad unemployment insurance administration fund and shall credit 
quarterly (on March 31, June 30, September 30, and December 31, of each 
year) to each account, on the basis of the average daily balance of such 
account, a proportionate part of the earnings of the Fund for the 
quarter ending on such date. For the purpose of this subsection, the 
average daily balance shall be computed--
        (1) in the case of any State account, by reducing (but not below 
    zero) the amount in the account by the balance of advances made to 
    the State under section 1321 of this title, and
        (2) in the case of the Federal unemployment account--
            (A) by adding to the amount in the account the aggregate of 
        the reductions under paragraph (1), and
            (B) by subtracting from the sum so obtained the balance of 
        advances made under section 1323 of this title to the account.

(f) Payment to State agencies and Railroad Retirement Board

    The Secretary of the Treasury is authorized and directed to pay out 
of the Fund to any State agency such amount as it may duly requisition, 
not exceeding the amount standing to the account of such State agency at 
the time of such payment. The Secretary of the Treasury is authorized 
and directed to make such payments out of the railroad unemployment 
insurance account for the payment of benefits, and out of the railroad 
unemployment insurance administration fund for the payment of 
administrative expenses, as the Railroad Retirement Board may duly 
certify, not exceeding the amount standing to the credit of such account 
or such fund, as the case may be, at the time of such payment.

(g) Federal unemployment account; establishment

    There is hereby established in the Unemployment Trust Fund a Federal 
unemployment account.

(Aug. 14, 1935, ch. 531, title IX, Sec. 904, 49 Stat. 640; June 25, 
1938, ch. 680, Sec. 10(e)-(g), 52 Stat. 1104, 1105; Oct. 3, 1944, ch. 
480, title IV, Sec. 401, 58 Stat. 789; Aug. 6, 1947, ch. 510, Sec. 5(a), 
61 Stat. 794; Aug. 28, 1950, ch. 809, title IV, Sec. 404(b), 64 Stat. 
560; Aug. 5, 1954, ch. 657, Sec. 5(b)-(f), 68 Stat. 673; Pub. L. 85-927, 
pt. II, Sec. 204, Sept. 6, 1958, 72 Stat. 1782; Pub. L. 86-346, title I, 
Sec. 104(3), Sept. 22, 1959, 73 Stat. 622; Pub. L. 86-778, title V, 
Sec. 521, Sept. 13, 1960, 74 Stat. 976; Pub. L. 98-369, div. B, title 
VI, Sec. 2663(d)(3), July 18, 1984, 98 Stat. 1167; Pub. L. 102-318, 
title V, Sec. 531(d)(3), July 3, 1992, 106 Stat. 317.)


                               Amendments

    1992--Subsec. (g). Pub. L. 102-318 struck out after the first 
sentence the following: ``There is hereby authorized to be appropriated 
to such Federal unemployment account a sum equal to (1) the excess of 
taxes collected prior to July 1, 1946, under title IX of this Act or 
under the Federal Unemployment Tax Act, over the total unemployment 
administrative expenditures made prior to July 1, 1946, plus (2) the 
excess of taxes collected under the Federal Unemployment Tax Act after 
June 30, 1946, and prior to July 1, 1953, over the unemployment 
administrative expenditures made after June 30, 1946, and prior to July 
1, 1953. As used in this subsection, the term `unemployment 
administrative expenditures' means expenditures for grants under 
subchapter III of this chapter, expenditures for the administration of 
that subchapter by the Secretary of Health and Human Services, or the 
Secretary of Labor, and expenditures for the administration of title IX 
of this Act, or of the Federal Unemployment Tax Act, by the Department 
of the Treasury, the Secretary of Health and Human Services, or the 
Secretary of Labor. For the purposes of this subsection, there shall be 
deducted from the total amount of taxes collected prior to July 1, 1943, 
under title IX of this Act, the sum of $40,561,886.43 which was 
authorized to be appropriated by the Act of August 24, 1937 (50 Stat. 
754), and the sum of $18,451,846 which was authorized to be appropriated 
by section 361(b) of title 45.''
    1984--Subsec. (b). Pub. L. 98-369 substituted ``chapter 31 of title 
31'' for ``the Second Liberty Bond Act, as amended''.
    1960--Subsec. (a). Pub. L. 86-778 substituted ``with any depositary 
designated by him for such purpose, or with any Federal Reserve Bank'' 
for ``or with any Federal Reserve bank or member bank of the Federal 
Reserve System designated by him for such purpose''.
    Subsec. (b). Pub. L. 86-778 substituted ``Second Liberty Bond Act, 
as amended'' and ``section 1323'' for ``section 752 of title 31'' and 
``section 1322(c)'', respectively, and inserted ``made'' after 
``Advances''.
    Subsec. (e). Pub. L. 86-778 provided for the maintenance of a 
separate book account for the employment security administration account 
and substituted ``balance of advances made to the State under section 
1321 of this title'' for ``aggregate of the outstanding advances under 
section 1321 of this title from the Federal unemployment account'' in 
par. (1) and ``balance of advances made under section 1323 of this title 
to the account'' for ``aggregate of the outstanding advances from the 
Treasury to the account pursuant to section 1322(c) of this title''.
    Subsec. (g). Pub. L. 86-778 redesignated former subsec. (h) as (g).
    1959--Subsec. (b). Pub. L. 86-346 substituted ``on original issue at 
the issue price'' for ``on original issue at par''.
    1958--Subsec. (a). Pub. L. 85-927, Sec. 204(a), inserted ``or the 
railroad unemployment insurance administration fund''.
    Subsec. (e). Pub. L. 85-927, Sec. 204(b), substituted ``the railroad 
unemployment insurance account, and the railroad unemployment insurance 
administration fund'' for ``and the railroad unemployment insurance 
account''.
    Subsec. (f). Pub. L. 85-927, Sec. 204(c), substituted ``railroad 
unemployment insurance account for the payment of benefits, and out of 
the railroad unemployment insurance administration fund for the payment 
of administrative expenses, as the Railroad Retirement Board may duly 
certify, not exceeding the amount standing to the credit of such account 
or such fund, as the case may be, at the time of such payment'' for 
``fund as the Railroad Retirement Board may duly certify, not exceeding 
the amount standing to the railroad unemployment insurance account at 
the time of such payment''.
    1954--Subsec. (a). Act Aug. 5, 1954, Sec. 5(b), substituted ``or 
otherwise deposited in or credited to the Fund or any account therein'' 
for ``or deposited pursuant to appropriations to the Federal 
unemployment account''.
    Subsec. (b). Act Aug. 5, 1954, Sec. 5(c), inserted provision that 
advances to the Federal unemployment account pursuant to section 1323 of 
this title shall not be invested.
    Subsec. (e). Act Aug. 5, 1954, Sec. 5(d), inserted ``For the 
purposes of this subsection, the average daily balance shall be 
computed--
        ``(1) in the case of any State account, by reducing (but not 
    below zero) the amount in the account by the aggregate of the 
    outstanding advances under section 1201 from the Federal 
    unemployment account, and
        ``(2) in the case of the Federal unemployment account, (A) by 
    adding to the amount in the account the aggregate of the reductions 
    under paragraph (1), and (B) by subtracting from the sum so obtained 
    the aggregate of the outstanding advances from the Treasury to the 
    account pursuant to section 1202(c).''
    Subsec. (g). Act Aug. 5, 1954, Sec. 5(e), repealed subsec. (g) which 
authorized Secretary of Treasury to make transfers from Federal 
unemployment account to account of any State in Unemployment Trust Fund.
    Subsec. (h). Act Aug. 5, 1954, Sec. 5(f), substituted a new cl. (2) 
in second sentence and repealed the third sentence: ``Any amounts in the 
Federal unemployment account on April 1952, and any amounts repaid to 
such account after such date, shall be covered into the general fund of 
the Treasury.''
    1950--Subsec. (h). Act Aug. 28, 1950, substituted ``prior to July 1, 
1951'' for ``prior to July 1, 1949'', ``on July 1, 1951, and ending on 
December 31, 1951'' for ``on July 1, 1949, and ending on December 31, 
1949'' in cl. (2) of second sentence, and ``April 1, 1952'' for ``April 
1, 1950'' in third sentence.
    1947--Subsec. (h). Act Aug. 6, 1947, amended subsec. (h) generally, 
and, among other changes, changed the periods for which excess of tax 
collections over administrative expenditures could be appropriated to 
the unemployment account, limited authorized appropriations for the 
unemployment account to the excess collections for the period ending 
Dec. 31, 1949, provided for amounts in such account on Apr. 1, 1950, and 
any repayments to the account after such date be covered into the 
general fund of the Treasury, and provided for an additional deduction 
of $18,451,846 from the total amount of taxes collected prior to July 1, 
1943.
    1944--Subsec. (a). Act Oct. 3, 1944, Sec. 401(a), inserted ``, or 
deposited pursuant to appropriations to the Federal unemployment 
account'' after ``unemployment insurance account'' in second sentence.
    Subsec. (e). Act Oct. 3, 1944, Sec. 401(b), inserted ``, the Federal 
unemployment account'' after ``a separate book account for each State 
agency''.
    Subsecs. (g), (h). Act Oct. 3, 1944, Sec. 401(c), added subsecs. (g) 
and (h).
    1938--Subsec. (a). Act June 25, 1938, Sec. 10(e), inserted ``or by 
the Railroad Retirement Board to the credit of the railroad unemployment 
insurance account''.
    Subsec. (e). Act June 25, 1938, Sec. 10(f), inserted ``and the 
railroad unemployment insurance account''.
    Subsec. (f). Act June 25, 1938, Sec. 10(g), inserted second 
sentence.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-369 effective July 18, 1984, but not to be 
construed as changing or affecting any right, liability, status, or 
interpretation which existed (under the provisions of law involved) 
before that date, see section 2664(b) of Pub. L. 98-369, set out as a 
note under section 401 of this title.


                    Effective Date of 1958 Amendment

    Amendment by Pub. L. 85-927 effective Sept. 6, 1958, except as 
otherwise indicated, see section 207(c) of Pub. L. 85-927, set out as a 
note under section 351 of Title 45, Railroads.


                    Effective Date of 1950 Amendment

    Section 404(c) of act Aug. 28, 1950, provided that: ``The amendments 
made by subsections (a) and (b) of this section [amending this section 
and section 1321 of this title] shall be effective January 1, 1950.''


                            Termination Date

    Section 4 of act Aug. 6, 1947, provided: ``Section 603 of the War 
Mobilization and Reconversion Act of 1944 [formerly set out as a note 
under section 1651 of Appendix to Title 50, War and National Defense] 
(terminating the provisions of such Act [sections 1651 to 1678 of 
Appendix to title 50] on June 30, 1947) shall not be applicable in the 
case of the amendments made by title IV of such Act [amending sections 
1666 and 1667 of Appendix to Title 50] to the Social Security Act [this 
section and section 1321 of this title].''


                           Payments to States

    Act Aug. 24, 1937, ch. 755, 50 Stat. 754, provided for payments to 
States of 90 per cent of proceeds of the unemployment tax collected 
prior to Jan. 31, 1938, where State had enacted an approved 
unemployment-compensation law during 1937.

                  Section Referred to in Other Sections

    This section is referred to in sections 503, 1105, 1109, 1322 of 
this title; title 2 section 906; title 5 section 8509; title 26 sections 
3304, 3306; title 45 sections 360, 361, 363a, 366a.
