B-4264, JUNE 15, 1939, 18 COMP. GEN. 930

B-4264, JUNE 15, 1939, 18 COMP. GEN. 930

RAILROAD UNEMPLOYMENT INSURANCE ACT - TRANSFERS OF STATE UNEMPLOYMENT TRUST FUNDS WHILE THE "PRELIMINARY AMOUNT" FOR EACH STATE FOR TRANSFER UNDER SECTION 13 (C) OF THE RAILROAD UNEMPLOYMENT INSURANCE ACT, APPROVED JUNE 25, 1938, 52 STAT. 1111, FROM THE STATE "UNEMPLOYMENT TRUST FUND TO THE RAILROAD UNEMPLOYMENT INSURANCE ACCOUNT IN THE UNEMPLOYMENT TRUST FUND," IS FOR DETERMINATION, UNDER THE STATUTE, AS OF JUNE 30, 1939, THERE IS NO REQUIREMENT THAT THE TRANSFERS BE MADE ON OR AS OF JUNE 30, 1939, WHEN, IN FACT, THE "PRELIMINARY AMOUNT" CANNOT BE ASCERTAINED UNTIL A LATER DATE, AND SUCH TRANSFERS MAY BE MADE CURRENTLY AS OF THE DATES THAT THE SOCIAL SECURITY BOARD NOTIFIES THE SECRETARY OF THE TREASURY AS TO THE AMOUNTS SO DETERMINED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, JUNE 15, 1939:

I HAVE YOUR LETTER OF JUNE 9, 1939, AS FOLLOWS:

UNDER THE PROVISIONS OF SECTION 13 (C) OF THE RAILROAD UNEMPLOYMENT INSURANCE ACT, APPROVED JUNE 25, 1938, 52 STAT. 1111 (U.S.C., SUPP. IV, TITLE 45, SEC. 363 (B) (, THE SOCIAL SECURITY BOARD IS DIRECTED TO DETERMINE FOR EACH STATE, AFTER AGREEMENT WITH THE RAILROAD RETIREMENT BOARD AND AFTER CONSULTATION WITH SUCH STATE, AN AMOUNT REFERRED TO IN THE STATUTE AS THE "PRELIMINARY AMOUNT.' THIS AMOUNT IS DETERMINED PURSUANT TO A FORMULA SET OUT IN THE STATUTE AND REPRESENTS AN AMOUNT TO BE DETERMINED AS OF JUNE 30, 1939. IT IS CONTEMPLATED THAT THAT AMOUNT WILL BE TRANSFERRED FROM THE STATE UNEMPLOYMENT TRUST ACCOUNT TO THE RAILROAD UNEMPLOYMENT INSURANCE ACCOUNT IN THE UNEMPLOYMENT TRUST FUND. SECTION 13 (D) SETS OUT THE MANNER IN WHICH THE TRANSFERS SHALL BE AUTHORIZED AND DIRECTED BY THE STATES. SECTION 13 (F) DIRECTS THE SECRETARY OF THE TREASURY TO MAKE THE TRANSFERS PURSUANT TO THE STATES' AUTHORIZATIONS AND DIRECTIONS.

IT IS UNDERSTOOD THAT A NUMBER OF STATES HAVE ENACTED ENABLING LEGISLATION PERMITTING THEIR COMPLIANCE WITH THE FIRST PROVISO OF SECTION 13 (D) OF THE RAILROAD UNEMPLOYMENT INSURANCE ACT, AND THAT IT IS CONTEMPLATED SUCH STATES WILL EXECUTE THROUGH THE APPROPRIATE STATE AGENCIES PRIOR TO JULY 1, 1939, THE AUTHORIZATIONS AND DIRECTIONS REFERRED TO IN THE SAID SECTION 13 (D). OF COURSE, THERE ARE OTHER STATES WHERE THE FIRST LEGISLATURE SESSION FOLLOWING THE ENACTMENT OF THE RAILROAD UNEMPLOYMENT INSURANCE ACT HAS NOT ADJOURNED AND WHICH MAY NOT, IN SOME CASES, ADJOURN UNTIL 1940. WITH RESPECT TO THOSE STATES NO AUTHORIZATION IS REQUIRED BY THE ACT BEFORE JULY 1, 1939, IN ORDER TO TAKE ADVANTAGE OF THE PROVISO IN SECTION 13 (D) OF THE ACT. SUCH OTHER STATES RAISE NO PROBLEM AT THIS TIME.

OBVIOUSLY, IT IS IMPOSSIBLE FOR THE SOCIAL SECURITY BOARD TO DETERMINE PRIOR TO JULY 1, 1939, THE DOLLARS AND CENTS AMOUNTS REPRESENTING THE "PRELIMINARY AMOUNTS.' IT MAY BE POSSIBLE FOR SUCH DOLLARS AND CENTS AMOUNTS TO BE DETERMINED FOR SOME STATES DURING THE LATTER PART OF JULY 1939, BUT FOR OTHER STATES THE DETERMINATIONS MAY NOT BE MADE FOR SEVERAL MONTHS. IT IS UNDERSTOOD THAT THE SOCIAL SECURITY BOARD, BEFORE MAKING THE DETERMINATIONS REQUIRED OF IT, IS HAVING ITS FIELD REPRESENTATIVES VERIFY THE AMOUNTS SHOWN IN THE BOOKS AND RECORDS OF THE STATE AGENCIES. THIS PROCEDURE WILL NECESSARILY CONSUME A CONSIDERABLE TIME BECAUSE OF THE NUMBER OF STATES INVOLVED.

IT IS PROPOSED THAT WHILE THE TREASURY WILL RECEIVE AN AUTHORIZATION FROM VARIOUS STATE AGENCIES DATED PRIOR TO JULY 1, 1939, IN THE FORM ATTACHED HERETO, THE TREASURY WILL NOT BE NOTIFIED BY THE SOCIAL SECURITY BOARD OF THE DOLLARS AND CENTS AMOUNTS DETERMINED BY THE BOARD TO BE TRANSFERRED FROM THE STATE ACCOUNTS TO THE RAILROAD UNEMPLOYMENT INSURANCE ACCOUNT UNTIL LATER DATES. IT IS OUR UNDERSTANDING THAT THERE ARE APPROXIMATELY THIRTY STATES WHOSE LEGISLATURES MET AND ADJOURNED PRIOR TO THIRTY DAYS BEFORE JUNE 30, 1939, AND WHICH ARE INVOLVED IN THIS PROCEDURE. THE QUESTION WHICH ARISES IN THE TREASURY IS WHETHER IN MAKING THE TRANSFERS, WHEN NOTIFIED BY THE SOCIAL SECURITY BOARD OF THE RESPECTIVE DOLLARS AND CENTS AMOUNTS, SUCH TRANSFERS MAY BE MADE CURRENTLY AS OF THE DATES OF SUCH NOTIFICATIONS, OR WHETHER THE TREASURY IS REQUIRED TO MAKE SUCH TRANSFERS RETROACTIVE TO JULY 1, 1939, THE DATE OF THE RESPECTIVE AUTHORIZATIONS FROM THE STATES. IT IS CONCERNING THIS QUESTION THAT YOUR VIEWS ARE REQUESTED. IN THIS CONNECTION YOUR ATTENTION IS CALLED TO THE DECISION IN (1932) 11 COMP. GEN. 413 WHERE A PROBLEM SOMEWHAT ANALOGOUS TO THE INSTANT INQUIRY WAS INVOLVED.

IN VIEW OF THE IMPORTANCE OF THIS QUESTION SO FAR AS IT AFFECTS THE ADMINISTRATION OF THE UNEMPLOYMENT TRUST FUND BY THE SECRETARY OF THE TREASURY AND IN VIEW OF THE SHORT TIME AVAILABLE BEFORE JULY 1, 1939, IT WILL BE APPRECIATED IF THE TREASURY MAY HAVE THE BENEFIT OF AN EARLY REPLY.

SUBSECTION (C) AND THE FIRST PARAGRAPH OF SUBSECTION (D) OF SECTION 13 OF THE RAILROAD UNEMPLOYMENT INSURANCE ACT, APPROVED JUNE 25, 1938, 52 STAT. 1111, PROVIDE AS FOLLOWS:

(C) THE SOCIAL SECURITY BOARD IS HEREBY 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) THE SOCIAL SECURITY BOARD SHALL WITHHOLD FROM CERTIFICATION TO THE SECRETARY OF THE TREASURY FOR PAYMENT THE AMOUNTS DETERMINED BY IT PURSUANT TO SECTION 302 (A) OF THE SOCIAL SECURITY ACT 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 PERCENTUM 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 ACT, 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- COMPENSATION 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.

SUBSECTION (C) DIRECTS DETERMINATION AS OF JUNE 30, 1939, OF THE "PRELIMINARY AMOUNT" FOR EACH STATE TO BE TRANSFERRED TO THE RAILROAD UNEMPLOYMENT COMPENSATION ACCOUNT, AND THE PROVISO IN SUBSECTION (D) IS TO THE EFFECT THAT THE STATE CONCERNED MAY AUTHORIZE AND DIRECT THE SECRETARY OF THE TREASURY TO TRANSFER THE AMOUNT SO DETERMINED FROM ITS ACCOUNT IN THE UNEMPLOYMENT TRUST FUND TO THE "RAILROAD UNEMPLOYMENT COMPENSATION ACCOUNT" IN THE UNEMPLOYMENT TRUST FUND. IT IS FURTHER PROVIDED IN SUBSECTION (F) OF THE SAME SECTION THAT---

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.

IT WILL BE NOTED FROM THE FOREGOING THAT WHILE THE DATE AS OF WHICH THE DETERMINATION OR ASCERTAINMENT OF THE "PRELIMINARY AMOUNT" SHALL BE MADE IS SPECIFIED IN TERMS UNDER SUBSECTION (C) THE OTHER SECTIONS RELATING TO TRANSFERS DO NOT SPECIFY THE DATE OR DATES UPON WHICH OR AS OF WHICH THE ACTUAL TRANSFER OR TRANSFERS SHALL BE MADE. IT IS TO BE PRESUMED THE LAW CONTEMPLATED A REASONABLE TIME AFTER JUNE 30, 1939, WOULD BE REQUIRED FOR THE DETERMINATION OF THE "PRELIMINARY AMOUNT" AND THAT EVEN IN THOSE CASES WHERE THE STATE HAS ACTED UNDER SUBSECTION (D) PRIOR TO JULY 1, 1939, IT WAS NOT INTENDED THAT THE TRANSFERS SHOULD BE MADE ON OR AS OF JUNE 30, 1939, WHEN, IN FACT, THE "PRELIMINARY AMOUNT" COULD NOT BE ASCERTAINED UNTIL A LATER DATE.

ACCORDINGLY, IN SPECIFIC ANSWER TO THE QUESTION SUBMITTED I HAVE TO ADVISE THAT THE TRANSFERS REFERRED TO IN YOUR SUBMISSION MAY BE MADE CURRENTLY AS OF THE DATES OF NOTIFICATION, THERE BEING NO REQUIREMENT UNDER THE LAW THAT THEY BE MADE AS OF JUNE 30, 1939, OR RETROACTIVE TO JULY 1, 1939.