Page:United States Statutes at Large Volume 95.djvu/903

 PUBLIC LAW 97-35—AUG. 13, 1981

95 STAT. 877

of the enactment of this subsection) which has resulted or will result in a reduction in such State's unemployment tax effort (as defined by the Secretary of Labor in regulations), "(B) no State action was taken during the 12-month period ending on September 30 of such taxable year (excluding any action required under State law as in effect prior to the date of the enactment of this subsection) which has resulted or will result in a net decrease in the solvency of the State unemployment compensation system (as defined by the Secretary of Labor in regulations), "(C) the State unemployment tax rate for the taxable year equals or exceeds the average benefit cost ratio for calendar years in the 5-calendar year period ending with the last calendar year before the taxable year, and "(D) the outstanding balance for such State of advances under title XII of the Social Security Act on September 30 of 42 USC 1321. such taxable year was not greater than the outstanding balance for such State of such advances on September 30 of the third preceding taxable year (or, for purposes of applying this subparagraph to taxable year 1983, September 30, 1981). The requirements of subparagraphs (C) and (D) shall not apply to taxable years 1981 and 1982. "(3) CREDIT REDUCTIONS FOR SUBSEQUENT YEARS.—If the credit

reduction under subsection (c)(2) is limited by reason of paragraph (1) of this subsection for any taxable year, for purposes of applying subsection (c)(2) to subsequent taxable years (including years after 1987), the taxable year for which the credit reduction was so limited (and January 1 thereof) shall not be taken into account. "(4) STATE UNEMPLOYMENT TAX RATE.—For purposes of this subsection— "(A) IN GENERAL.—The State unemployment tax rate for any taxable year is the percentage obtained by dividing— "(i) the total amount of contributions paid into the State unemployment fund with respect to such taxable year, by "(ii) the total amount of the remuneration subject to contributions under the State unemployment compensation law with respect to such taxable year (determined without regard to any limitation on the amount of wages subject to contribution under the State law). "(B) TREATMENT OF ADDITIONAL TAX UNDER THIS CHAPTER.— "(i) TAXABLE YEAR 1983.—In the case of taxable year

1983, any additional tax imposed under this chapter with respect to any State by reason of subsection (c)(2) shall be treated as contributions paid into the State unemployment fund with respect to such taxable year. "(ii) TAXABLE YEAR 1984.—In the case of taxable year 1984, any additional tax imposed under this chapter with respect to any State by reason of subsection (c)(2) shall (to the extent such additional tax is attributable to a credit reduction in excess of 0.6 of wages attributable to such State) be treated as contributions paid into the State unemployment fund with respect to such taxable year. "(5) BENEFIT COST RATIO.—For purposes of this subsection—

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