(a) Applicability. Legislative-action interest deferrals obtained
under subsection (b)(8) (A) through (C) of section 1202 of the Social
Security Act are no longer available. Nevertheless, States must maintain
their solvency effort with respect to any such deferrals approved in
1983, 1984, and 1985 in order for the deferral to continue to apply in
each subsequent year of deferral.
(b) Determination regarding maintenance of solvency effort. (1) The
UIS Director shall determine if there is a net reduction in solvency
effort by first estimating revenue receipts and benefit outlays under
the law in effect in the 12-month period ending on September 30 of the
year for which continuation of deferral is requested as if it were
effective in the base year (12-month period for which the first deferral
was granted).
(2) The UIS Director shall then compare revenue receipts and benefit
outlays for the base year (previously estimated at the time of the
original deferral) with revenue receipts and benefit outlays estimated
in paragraph (b)(1) of this section.
(3) If the sum of--
(i) The percentage increase in revenue receipts from the base year
to the year for which the continuation of deferral is requested (as
estimated in paragraph (b)(1) of this section), and
(ii) The percentage decrease in benefit outlays from the base year
to the year for which the continuation of deferral is requested (as
estimated in paragraph (b)(1) of this section),
is equal to or greater than the sum of such percentages achieved for the
12-
month period ending on September 30 of the year for which the latest
deferral was obtained, the State will have maintained its solvency
effort, but if less, then a reduction in solvency effort will have
occurred.
(4) Notwithstanding the results of the calculation in paragraph
(b)(3) of this section, if there is no increase in revenue receipts or
no decrease in benefit outlays between the base year and the year for
which continuation of deferral is requested, then a reduction in
solvency effort will have occurred.
(c) Effect of determination. (1) If the UIS Director determines that
a State has maintained its solvency effort, continuation of deferral
will be granted, and the State will be required to timely pay the
deferred interest payable prior to October 1 of the year with respect to
which such determination is made.
(2) If the UIS Director determines that a State failed to maintain
its solvency effort, all deferred interest shall be due and payable
prior to October 1 of the year with respect to which such determination
is made.
(d) Application and information. (1) The Governor of a State which
has decided to request continuation of a previously approved deferral of
interest payments shall apply to the Secretary of Labor no later than
July 1 of the year for which continuation is requested. The Governor is
required to notify the Department on or before September 1 of such
taxable year of any action impacting upon the State's application which
has occurred or will occur subsequent to the date of the initial
application and on or before September 30.
(2) In support of the application by the Governor, there shall be
submitted for the purposes of the estimates required in paragraph (b) of
this section documentation as specified in Sec. 606.22 (b)(1) through
(4), (c) and (f) and bearing upon the application for continuation of
deferral, in terms of the relevant comparison between revenue receipts
and benefit outlays.
