(a) Payment of interest. Except as otherwise provided in paragraph
(b) of this section each State shall pay interest on any advance made to
such State under title XII of the Social Security Act.
(b) Cash flow loans. Advances repaid in full prior to October 1 of
the calendar year in which made are deemed cash flow loans and shall be
free of interest; provided, that the State does not receive an
additional advance after September 30 of the same calendar year. If such
additional advance is received by the State, interest on the completely
repaid earlier advance(s) shall be due and payable not later than the
day following the date of the first such additional advance. The
administrator of the State agency shall notify the Secretary of Labor no
later than September 10 of those loans deemed to be cash flow loans and
not subject to interest. This notification shall include the date and
amount of each loan made in January through September and a copy of
documentation sent to the Secretary of the Treasury requesting loan
repayment transfer(s) from the State's account in the Unemployment Trust
Fund to the Federal unemployment account in such Fund.
