(a) Applicability. Subsection (b)(3)(C) of section 1202 of the
Social Security Act permits a State to defer payment of, and extend the
payment for, 75 percent of interest charges otherwise due prior to
October 1 of a year if the UIS Director determines that high
unemployment conditions existed in the State.
(b) High unemployment defined. For purposes of this section, high
unemployment conditions existed in the State if the State's rate of
insured unemployment (as determined for purposes of 20 CFR 615.12) under
the State law with respect to the period consisting of the first six
months of the preceding calendar year equalled or exceeded 7.5 percent;
this means that in
weeks 1 (that week which includes January 1 of the year) through 26 of
such preceding calendar year, the rate of insured unemployment reported
by the State and accepted by the Department under 20 CFR part 615 must
have averaged a percentage equalling or exceeding 7.5 percent.
(c) Schedule of deferred payments. The State must pay prior to
October 1 one-fourth of the interest due, and must pay a minimum of one-
third of the deferred amount prior to October 1 in each of the three
years following the year in which deferral was granted; at the State's
option payment of deferred interest may be accelerated.
(d) Related criteria. Timely payment of one-fourth of the interest
due prior to October 1 is a precondition to obtaining deferral of
payment of 75 percent of the interest due. No interest shall accrue on
such deferred interest.
(e) Application for deferral and determination. (1) The Governor of
a State which has decided to request such deferral of interest payment
shall apply to the Secretary of Labor no later than July 1 of the
taxable year for which the deferral is requested.
(2) The UIS Director will determine whether deferral is or is not
granted on the basis of the Department's records of reports of the rates
of insured unemployment and information obtained from the Department of
the Treasury as to the timely and full payment of one-fourth of the
interest due.
