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The original documents are located in Box 50, folder “1976/07/12 HR13069 Loans to the Unemployment Fund of the Virgin Islands” of the White House Records Office: Legislation Case Files at the Gerald R. Ford Presidential Library. Copyright Notice The copyright law of the United States (Title 17, United States Code) governs the making of photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United States of America his copyrights in all of his unpublished writings in National Archives collections. Works prepared by U.S. Government employees as part of their official duties are in the public domain. The copyrights to materials written by other individuals or organizations are presumed to remain with them. If you think any of the information displayed in the PDF is subject to a valid copyright claim, please contact the Gerald R. Ford Presidential Library. Exact duplicates within this folder were not digitized. THE WHITE HOUSE WASHINGTON July 9, 1976 ACTION Last Day: July 17 MEMORANDUM FOR THE PRESIDENT FROM: SUBJECT: JIM H.R. Fund Loans to the Unemployment Virgin Islands Attached for your consideration is H.R. 13069, sponsored by Representative Corman and eight others. The enrolled bill extends from June 30, 1976 to September 30, 1977 and increases by $10 million the authorization for loans to the unemployment fund of the Virgin Islands. The bill also extends for one year until January 1, 1979 the interest-free repayment period on loans. P.L. 94-45, the Emergency Compensation and Special Unemployment Assistance Extension Act of 1975 had made available up to $5 million for loans until June 30, 1976, with interest-free repayment until January 1, 1978. Additional information is provided in OMB's enrolled bill report at Tab A. OMB, Max Friedersdorf, Counsel's Office (Lazarus) and I recommend approval of the enrolled bill. RECOMMENDATION That you sign H.R. 13069 at Tab B. Digitized from Box 50 of the White House Records Office Legislation Case Files at the Gerald R. Ford Presidential Library EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503 JUL 8 1976 MEMORANDUM FOR THE PRESIDENT Subject: Enrolled Bill H.R. 13069 - Loans to the unemploy- ment fund of the Virgin Islands Sponsor - Rep. Corman (D) California and 8 others Last Day for Action July 17, 1976 - Saturday Purpose Recommend early action since loan authority expired on June 30, 1976. Extends from June 30, 1976 to September 30, 1977 and increases by $10 million the authorization for loans to the unemployment fund of the Virgin Islands; extends for one year the interest- free repayment period on the loans. Agency Recommendations Office of Management and Budget Department of Labor Department of the Interior Discussion Approval Approval Approval P.L. 94-45, the Emergency Compensation and Special Unemployment Assistance Extension Act of 1975, authorized the Secretary of Labor to lend up to $5 million to the Virgin Islands from general funds for benefit payments under the Islands' unemployment compensation law. No loans could be made after June 30, 1976, and repayments were to be interest-free until January 1, 1978. P.L. 94-93 made available up to $5 million of appropriations for the loans. The enrolled bill, which was supported by the Administration, would amend P.L. 94-45 to: increase the aggregate amount of the loans from $5 million to $15 million, 2 extend the time during which loans can be made through fiscal year 1977, and extend to January 1, 1979 the date by which the loans can be repaid without interest. The Virgin Islands is not included in the State-Federal unemploy- ment insurance system. Therefore, unlike a State, it cannot borrow from the Unemployment Trust Fund in order to pay unemploy- ment insurance benefits when its own unemployment funds are depleted. The continuing high unemployment rate in the Islands has resulted in a deficit in its unemployment trust fund, despite increases in the employer-paid tax. None of the $5 million originally appropriated for Federal loans remains. Therefore additional loans are necessary if the Virgin Islands is to continue to make payments under its unemployment compensation program. You have already requested, and the Congress has provided in P.L. 94-303, authority to use appropriations already available for unemployment compensation for these additional loans. The Administration has proposed bringing the Virgin Islands into the State-Federal unemployment insurance system, thereby making it eligible for loans like any State. This provision is contained in H.R. 10210, which is scheduled for House floor action after the July recess. Upon its enactment, it would supersede the temporary provisions in H.R. 13069. Enclosures THE WHITE HOUSE ACTION MEMORANDUM WASHINGTON LOG NO.: Date: Jily FOR ACTION: David Lissy Max Fri*dersdorf Ken arus. FROM THE STAFF SECRETARY DUE: Date: July 9 SUBJECT: Time: 600pm cc (for information): Jack Marsh Jim Cavanaugh Ed Schmults Time: 500pm H.R. 13069-Loans to the unemployment fund of the Virgin Islands ACTION REQUESTED: -- For Necessary Action __ For Your Recommendations -- Prepare Agenda and Brief __ Draft Reply -X- For Your Comments __ Draft Remarks REMARKS: please return to judy johnston,g round floor west winq PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED. If you have any Cflestiona or if you anticipate a delay in .the rsquireq material, please telephone the : 1 ry imme.diately. K. R. COLE, JR. For the President U.S. DEPARTMENT OF LABOR OFFICE OF THE SECRETARY Honorable James T. Lynn Director WASHINGTON JUL 7 1976 Office of Management and Budget Washington, D.C. 20503 Dear J).1r. Lynn : This is in response to your request for the Department of Labor's views on an enrolled bill, H.R. 13069, which authorizes additional loans to the unemployment insurance fund of the Virgin Islands. H.R. 13069 would extend the temporary loan authority provided in P.L. 94-45 until the end of Fiscal Year 1977; it would also authorize an addi- tional $10 million for such loans during that period and extend the interest free repayment date from January 1, 1978 to January 1, 1979. Under present law (P.L. 94-45, Title III), the Secretary of Labor was authorized to loan up to $5 million to the unemploy- ment insurance fund of the Virgin Islands to enable it to continue to pay benefits under its unemployment compensation program. No loans were to be made after June 30, 1976. These loans were interest free until January 1, 1978. After that date, interest will be charged on any outstanding loans. Loans to the Virgin Islands from the $5 million appropriation provided under P.L. 94-45 are now depleted. Accordingly, extension of the temporary loan authority, as provided in H.R. 13069, is required if the Virgin Islands is to continue to make payments under its unemployment compensation program. The Virgin Islands on January 1, 1975 raised the tax rate applicable to all covered employees from 1.5 percent to 2.7 percent of taxable payrolls and increased the annual taxable wage base per employee from $4,200 to $4,800. However, despite these efforts to maintain a fiscally sound system, the continuing high unemployment rate has left the Virgin Islands in great difficulty. Since the Virgin Islands is - 2 - not part of the Federal-State unemployment system, it is not eligible, as the States are, for loans from that system. Recognizing this, Congress passed P.L. 94-45 authorizing $5 million in loans through June 30, 1976. H.R. 10210 (the Unemployment Compensation Amendments of 1975), which includes a provision bringing the Virgin Islands within the Federal-State system (and thereby eligible for loans), is still pending in Congress. H.R. 13069 is nec- essary to cover projected borrowing needs of the Virgin Islands unemployment system for another 15 months. We hope that·the Virgin Islands will have been included in the Federal-State system before the end of that period. The Department urges that the bill be signed as soon as possible. Sincerely, United States Department of the Interior Dear Mr. Lynn: OFFICE OF THE SECRETARY WASHINGTON, D.C. 20240 JUL 6 -1976 This responds to your request for the views of this Department on the enrolled bill H.R. 13069, "To extend and increase the authorization for making loans to the unemployment fund of the Virgin Islands." We recommend that the President approve the enrolled bill. As enrolled, H.R. 13069 amends section 301 of the Emergency Compensation and Special Unemployment Assistance Extension Act of 1975 (Public Law 94-45) which authorizes the Secretary of Labor to make loans to the Virgin Islands for purposes of paying unemployment compensation. The bill extends the temporary loan authority provided in Public Law 94-45 from June 30, 1976 to September 30, 1977, and authorizes an additional $10 million for such loans during that period. It also extends the interest free repayment date from January 1, 1978 to January 1, 1979. While the u.s. Virgin Islands has had its own unemployment com- pensation program for several years, under Federal law the Virgin Islands is not considered a "State" for the purpose of participating in the Federal-State unemployment insurance system. Therefore, the territory cannot borrow from the Federal Unemployment Insurance loan fund when it has depleted its own unemployment insurance fund. Due to the fiscal crisis confronting the territorial government of the Virgin Islands in fiscal year 1976, a severe curtailing of government services was necessary, and a corresponding personnel reduction occurred. The government is the primary employer in the Virgin Islands and the rate of unemployment prior to the government layoff already exceeded 9% of the work force. The high level of unemployment caused a heavy drain on the unemployment insurance fund. Despite increases in the employer-paid unemployment insurance tax, the Virgin Islands has depleted its unemployment insurance funds as benefit payments have exceeded unemployment insurance revenues. For the purpose of enabling the Virgin Islands to continue making unemployment compensation payments, Congress last year enacted in Public Law 94-45 a Title III, containing a temporary program whereby the Secretary of Labor was authorized to loan until June 30, 1976, up to $5 million in general revenues as needed by the Virgin Islands for unemployment compensation, with outstanding loans to bear no interest until January 1, 1978. This temporary authority would be extended by the enrolled bill. The Virgin Islands has formally requested, through its Legislature and Governor, to be included in the Federal-State unemployment insurance system. The Administration supports this inclusion, and last year the Department of Labor transmitted a proposal to the Congress to include the Virgin Islands in the Federal-State system. However, since this proposal has not yet been enacted, the temporary loan authority provided in Title III of Public Law 94-45 must be extended if the Virgin Islands is to continue making unemployment compensation payments to its large number of the unemployed. Honorable James T. Lynn Director, Office of Management and Budget Washington, D. C. Assistant Sec etary of the Interior 2 - - . • Ju)y 8 \ ...... i David Lissy Max Friedersdorf Ken Lazarus ' (\ I • l • CC! ( .. ---- ------------------ --------- , . >v • SUBJEC'.:.': July 9 ------·----·--- 600pm r.n•ror. t.li' .): 'l'ime: Jack Marsh Jim Cavanaugh Ed Schmults SOOpm II.R. 13069-Loans to the unemployment fund of the Virgin Islands !~CTIOl·! REQUESTED: __ For N~ceszo.ry Action ____ For Your Recommendo.Hons -- D.:o.ft Reply ~-For Your Comment; ___ Draft Rcmo.rkt; REIV!AHKS: please return to judy johnston,g round floor vlest wing PI~El'~SE ATTACH; THIS COPY TO J\U:.TERIAL SUB~:!ITTED. ·u ha c': :\~.y ·i:;.1 £" f~ LO .. ~ "': a ~ ' ,t"< _ :: ..>r if yon c 1 · ::ipa!:c u , ( .... , 1 ,.~ • !.... ..!i - c: ...... ~ ~ · -1, plou ._ie! c: .~ .l · ! r!IlC~dClteJy. ~~ ~ ··'· "'0 ,, tlJ.' (. ' .. , 1.CTION ~1 OR HH 1 WI\ 1! 'GTO July 8 FROM Tl DUE: D UBJEc•.r: David Lissy Max Friedersdorf Ken Lazarus RY July 9 T cc 600pm " mal J.'ime: 0.: '': Jack Marsh Jim Cavanaugh Ed Schmults SOOpm H. R. 13069-Loans to the unemployment fund of the Virgin Islands ACTION REQUESTED: --For Necessary Action __ For Your Recommendations __ Prepcue Agenda and Brie£ -- Draft Reply -X- For Your Comments __ Draft Remarks REMARKS: please return to judy johnston,g round floor west wing No objection. Ken Lazarus PLEASE ATTACH; THIS COPY TO MATERIAL SUBMITTED. you have a y at: ··o d · oy ·in s~ t ielephona t . to Sec . or if you ui cd ... plaas ir, 1neci c tel . J OJ. t ' c ('\ ~ll NEMORANDUM FOR: FROM: SUBJECT: THE WHITE HOUSE July 9, 1976 JIM CAVANAUGH MAX L. FRIEDERSDORF H.R. 13069 - Loans to the unemployment fund of the Virgin Islands The Office of Legislative Affairs concurs with the agencies that the subject bill be signed. Attachments t MEMORANDUM 3977 NATIONAL SECURITY COUNCIL July 9, 1976 MEMORANDUM FOR: JAMES M. CANNON FROM: '" Jeanne W. Dav~ H. R. 13069 SUBJECT: The NSC Staff concurs in the proposed Enrolled Bill H. R. 13069 - Loans to the unemployment fund of the Virgin Islands. EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503 JUL . 8 1976 PRESIDENT Subject: Enrolled Bill H.R. 13069 - Loans to the unemploy ... ment fund of the Virgin Islands Sponsor - Rep. Corman (D) California and B others Last Day for Action July·l7, 1976- Saturday Purpose Recommend early action since loan authority expired on June 30, 1976. Extends from June 30, 1976 to September 30, 1977 and increases by $10 million the authorization for loans to the unemployment fund of the Virgin Islands: extends for one year the interest- free repayment period on the loans. Age~cy Recommendations Office of Management and Budget Department of Labor Department of the Interior Discussion Approval Approval Approval P.L. 94-45, the Emergency Compensation and Special Unemployment Assistance Extension Act of 1975, authorized the Secretary of Labor to lend up to $5 million to the Virgin Islands from general funds for benefit payments under the Islands' unemployment compensation law. No loans could be made after June 30, 1976, and repayments were to be interest-free until January 1, 1978. P.L. 94-93 made available up to $5 million of appropriations for the loans. The enrolled bill, which was supported by the Administration, would amend P.L. 94-45 to: increase the aggregate amount of the loans from $5 million to $15 million, 94TH CoNGRESS } HO ITS]jJ 01!' REPRESENT A 'I'IVES { REPoR'r ~d Session No. 94-1018 LOANS TO UNEMPLOYMENT FUND OF THE VIRGIN ISLANDS APRIL 8, 1976.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. ULLl\IAN, from the Committee on Ways and Means, submitted the following REPORT [To accompany H.R. 13069] The Committee on ·ways and Means, to whom was referred the bill (H.R. 18069) to extend and increase the authorization for making loans to the unemployment fund of the Virgin Islands, having con- sidered the same, report favorably thereon without amendment and recommend that the bill do pass. OONTEN'TIS I. Purpose. II. Explanation and comparison with present law. III. Revenue estimate and other matters required to be discussed under House rules. IV. Analysis of H.R.13069. V. Changes in existing law made by Bill, as reported. I. PURPOSE The purpose of H.R. 13069 is to extend the existing temporary au- thority provided in title III of Public Law 94-45 for the Secretary of Labor to make general revenue loans to the unemployment insurance fund of the Virgin Islands as is necessary to enable the Virgin Islands to continue to make payments under its unemployment compensation program. II. EXPLANATION AND CoMPARISON WrTH PRESENT LAw The Virgin Islands has had an unemployment compensation pro- gram similar to State unemployment compensation programs for 15 years. Under existing Federal law, however, the Virgin Islands is not considered a "State" for the purposes of participating in the Federal- State unemployment insurance system. It cannot, therefore, borrow 117-006 2 from the Federal Unemployment Insurance loan fund as can States that have depleted their State unemployment insurance fund. Because of the extraordinary high unemployment in recent months as o£ March 15, 1976, nineteen States and the District of Columbia had depleted their own unemployn;ent insurance f~nds and ':ere bor.rowing from the Feder~l loan fund m orde~ t<? contmue makmg unemploy- ment C?mpensatwn payments. The V1rgm Islands has experienced the same ~1gh levels of unemployment and heavy drain on its unemploy- me:qt msurance fund as has been felt throughout the United States durmg the rece.qt period of economic recession. Despite increases in the empl?yer-p-ard unemployment insurance tax, the Virgin Islands (alon~ With half of. the States) has depleted its unemployment insur- ance 1Unds as benefit payments have surpassed unemployment insur- ance revenues. For the purpose of enabling the Virgin Islands to continue makinO' unemployment compensation payments, Congress enacted last year ~ temporary program (Public Law 94-45, title III) authorizing the Secretary of I .. abor to loan up to $5 million in general revenues as needed by t~~ Virgin Islands unemployment insurance fund. Based on the PI"?VIswns of the Federal unemployment insurance loan pro- gram available to the States, these loans are interest free until Janu- ~ry 1, 1978. After that date, interest will be charged on any outstand- mg loans. . This. bill, II;.R. 13069, extends the ~mporary loan authority pro- vided m Pubhc Law 94-45 through fiscal year 1977 (until Septem- ber 30, 1977) and authorizes an additional $10 million for such loans during that period. It also extends the interest-free repayment date from January 1, 1978 to January 1 1979. The Virgin Island~ has forJ?aiiy requested through its Legislature and Governor to be mcluded m the Federal-State unemployment in- surance system. H.R. 10210, the Unemployment Compensation Amend- ments of 1975, would P.er;nit the Virgin Islands to become a part of the ~ederal ;syste;n and ~limmate the need for the temporary loan author- Ity proVIded m Pubhc Law 94-45 and extended under this bill. H.R. 10210 was aP.proved by ~e Committee ~m Ways and Means in December 1975 and 1s now awa1tmg House actiOn. It was anticipated by the Ways and Means Committee that H.R. 10210 would be enacted early this year, and the Virgin Islands would he incorporated in the Federal system and before the temporary loan authority in Public Law 94-45 expiN;d. House consi_9-eration of H.R. 10210, however, has been delayed until aft~r May .1? because ?f. the new bu~ge.t requirements and, as a result, Its prov1s10ns pertammg to the V1rgm Islands will have to be postponed for one year. Because of this delay, the temporary loan al!-thor~ty pr~wid.ed i~ Public .La.w 94-45 ml!-st be extended as pro- posed m this leg1slatwn If the V1rgm Islands 1s to continue makinO' unemployment compensation payments. . o Upon enactment of H.R: ~0210, this tem.porary loan a_uthority will b~ superseded by ~h~ proy1s10ns of tha:t hill, and the VIrgin Islands w1ll be able t<; participate m the Federal unemployment insurance loan program ava1lable to the States. vVhen the Virgin Islands is ineorpo- rated in the Federal system, any outstanding loans made under the temporary authority provided in Public Law 94-45 will he treated as though the Virgin Islands had been :in the System. This means that. H.R.l018 3 if the time for repayment has elapsed and any part oHhe loan remains outstanding, the increased :Federal unemployment insurance tax rates provided in the Federal loan program for the purpose of recapturing overdue loans would immediately go into effect. III: REVENUE EsTIMATE AND 01'HER 1\fA'l'TERS REQUIRED To BE DiscussED UNDER. HousE RuLEs In compliance with clause 7 (a) of Uule XIII of the Rules of the House of Uepresentatives, the following statement is made. The De- partment of Labor estimates that the cost of H.R. 13096 would be $2 million during the transitional quarter and $8 million during fiscal year 1977. Because this is a temporary program that expires at the end of fiscal year 1977, there would be no costs resulting from this bill be- yond fiscal year 1977. In compliance with clause 2(1) (2) (B) of Uule XI of the House of Representatives, the following statement is made. The bill H.R. 13069 was ordered favorably reported to the House of Representatives unani- mously by voice vote. In compliance with clause 2(1) (4) of Rule X of the House of Rep- resentatives, the following statement is made. H.R. 13069 is not ex- pected to have a significant inflationary impact on prices or on costs of the operations of the national economy or the economy of the Virgin Islands. The purpose of the bill is to make it possible for the Virgin Islands to continue to make payments under its unemployment com- pensation program. The objectives of the partial wage replacement under unemployment compensation programs are to assist individuals until they can find employment and to reduce the deflationary impact of the unemployed workers' wage loss on the national and local economy. In compliance with clause 2(1) (3) subdiYisions (A) (B) (C) and (D) of Rule XI of the House of Representatives, the following state- ments are made. vVith respect to subdivision (A) of clause 3 (relat- ing to oversight findings) the Committee ad vises that upon a review of the status of the Unemployment Insurance fund of the Virgin Islands it concluded that an extension of the temporary loan authority pro- vided in Public Law 94-45 was necessary and appropriate in order to enable the Virgin Islands to continue making unemployment compen- sation payments. This makes Federal loans for the purpose of unem- ployment compensation benefits available to the Virgin Islands on a basis similar to that available to the States under the Federal-State Unemployment Insurance System. With respect to subdivision (B) of clause (3). the Committee re- states that the Department of Labor estimates the' costs of H.R. 13069 to be $2 million during the transitional quarter and $8 million during fiscal;ear 1977. Because this is a temporary program expiring at the end o fiscal year 1977, there are no costs attributable to the bill beyond that fiscal year. With respect to subdivisions (C) and (D) of clause (3), the Com- mittee advises that no estimate or comparison has been prepared by the Director of the Congressional Budget Office relative to H.R. 13069 because it was not practicable within the available time, nor have any H.R. 1018 4 oversight findings or recommendations been made by the Committee on Government Operations with respect to the subject matter of this legislation. IV. ANALYSIS OF H.R. 13069 Section 301 of the Emergency Oompensation and Special U nemploy- ment Assistance Extension Act of 1975 ·authorizes the Secretary of Labor to make loans to the Virgin Islands for purposes of paying un- employment compensation. Under existing law, the authority for mak- ing such loans expires June 30, 1976, and the total amount of such loans may not exceed $5,000,000. Subsection (a) of the first section of the bill extends the authority for making such loans until Septem- ber 30, 1977, and increases the limit on the total amount of such loans to $1'5,000,000. Under existing law, the loans made to the Virgin Islands are repay- able (without interest) before January 1, 1978. After January 11 1978, interest is charged on the loans. Subsection (b) of the first section of the bill delays the date on which interest begins to be charged on the loans until January 1, 1979. V. CHANGES IN I;JxrsTING LAw MADE BY THE Bru,, AS REPORTED In compliance with clause 3 of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, as re- ported, a.re shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman): SECTION 301 OF THE EMERGENCY COMPENS~<i.TION AND SPECIAL UNEMPLOYl\1E:NT ASSISTANCE EXTENSION ACT OF 1975 TITLE III-LOANS TO THE UNEMPLOYMENT FUND OF THE VIRGIN ISLANDS SEc. 301. (a) The Secretary of Labor (hereinafter in this section referred to as the "Secretary") may make loans to the Virgin Islands in such amounts as he determines to be necessary for the payment in any month of compensation under the unemployment compensa- tion la.w of the Virgin Islands. A loan may be made under this subsec- tion for the payment of compensation in any month only if- (1) the Governor of the Virgin Islands submits an application therefor no earlier than the first day of the preceding month ; and (2) such application contains an estimate of the amount of the loan which will be required by the Virgin Islands for the pa~­ ment of compensation in such month. (b) For purposes of this section- (1) an application for loan under subsection (a) shall be made on such forms and shall contain such information and data (fiscal and otherwise) concerning the operation and administration of the unemployment compensation law of the Virgin Islands as the H.R. 1018 5 Secretary deems necessary or relevant to the performance of his duties under this section; ( 2) the amount required by the Virgin Isla?ds fo~ the payment of compensation in any month shall be determmed w1th due allow- ance for contingencies and taking into account all other am<?un~s that will be available in the unemployment fund of the V1rgm Islands for the payment of compensation in such month; and (3) the term "compensation" ?leans cash benefits paya.ble to individuals with respect to the1r unemployment, exclusive of expenses of administration. (c) Any loan made under subsection (a) shall be repayable (with- out interest) not later than January 1, [1978] 1979. If after Janua;ry .1, [1978] 1979, any portion of any such l~an remains. unp:;tid1 the V1rgm Islands shall pay interest .thereon,_untl~ the loan IS p~1d m full, at a rate equal to the rate of mterest m effect under section 6621 of the Internal Revenue Code of 1954. If at some future date of the Federal Unemployment Tax Act shall be made applicable to the Virgin Is- lands, then, any amount of principal or interest due on any such loan remaining unpaid on such date shall be treated, for purposes of sec- tion 3302 (c) ( 3) of the Internal Revenue Code of 1954, as an ~dvance made to the Virgin Islands under title XII of the Social Secunty Act. (~) .No loan may be made under subsection (a). for any month beo·mmng after [June 30, 1976] September 30, 1977. The aggregate ol"the loans which may be made under subsection (a) shaH not ex- ceed [$5,000,000] $15,000,000. (e) There are authorized to be appropriated from the gen~ral f~nd of the Treasury such sums as may be necessary to carry out tlus sectiOn. 0 H.R.1018 Calendar No. 777 94TH CoNGRESS' 1M Session SENATE REFOR'l' No. 94-819 VIRGIN ISLANDS UNEMPLOYMENT FUND AND ASSIST- ANCE PROGRAMS IN NORTHERN MARIANAS COMMON- WEALTH MAY 12, 1976.-0rdered to be printed Mr. LoNG, from the Committee on Finance, submitted the following REPORT [To accompany H.R. 13069] The Committee on Finance, to which was referred the bill (H.R. 13069) to extend and increase the authorization for makin~ loans to the unemployment fund of the Vir~ Islands, having considered the same, reports favorably thereon w1th an amendment and an amend- ment to the title and recommends that the bill as &mended do pass. I. SuMMARY OF THE BILL Loans to Virgin Islands unemployment fund.-Like many of the States, the territory of the Virgin Islands has experienced high rates of unemployment in recent years, which have depleted its unemploy- ment benefit fund. In June 1975, Congress enacted Public Law 94-45 authorizing loans through June 1976 up to $5 million in total to help the Virgin Islands meet its unemployment benefit obligations. This bill would p_rovide.an additional $10 million in loan,.,. authority which would remam available through September 30, 1917. The date for repayment would be extended to January 1, 1979 (compared with January 1, 1978 under existing law). SodalSecuriJty Act programs in the NorthemMarianas.-The Com- mittee has added to the House bill an amendment spelling out the applicability of certain Social Security Act assistance progralUS to the Northern Marianas Commonwealth. The Covenant establishing the Commonwealth provided in a general way for the establishment there of Federal assistance programs and specifically made applicable two Social Security Act programs (Supplemental Security Income 2 and special benefits for uninsured aged persons) which ~1av.e not previously been effective outside the 59 ~tates and the D1str~ct of Columbia. The Committee amendmentehmmates these progr!1ms m the Northern Marianas and S:(lells out the specific st~tutory def:alls for the extension to that jurisdictwn of the SoCial Secunty Act assistance pro- o-rams which are in effect in the other territories. 0 II. GENER..\L ExPI.AN ATION OF THE BILL VIRGIN ISLA:NDS UNEMPLOYMENT FUND LOANS (See~ 1 of the bill) The prolonged recession which the Nation has experienced in the past few years has severely strained the ~nemployment benefit funds of many jurisdictions. Under the Federal~State unemployment compen- sation system, when a State exhausts Its o~n unemployment benefit account it is automatically eligible to. ohtam a repayable loan from the Fed~ral accounts in the Unemployment Trust Fund. In 1973, ~nly two States ( C01mecticut and "VVashington) had such loans outstandmg. As of April15 1976 20 States plus the District of Columbia and the Commonwealth of Puerto Rico had such loans in forc-e. The Virgin Islands has experienced si.mil~r high ra.tes.of unemploy- ment in recent years. Despite substantu~I mcreases m ~ts unemplo:y- ment tax rate and in the wage base to Which the tax apphes, th!l't t~rn­ tory has been unable to meet its. unemployment benefit obhgatwns without borrowing from the Federal treasury. ~owever, althoug~ t~e \:ir~in Islands has an unempl?yment compensation program whiCh IS s1m1lar to that ofthe States, 1t IS not a part of the Federal-State unem- ployment compensation syst~m and is thus ineligible to borr,ow from the Federal accounts in the Unemployment Tru:;t Fund. . In June 1975,legislation wasenacte.d to prov1~e the necessary a~slst­ ance to the :Virgin Islands to enable It to m~et Its benefit obh~ahons. Under Public Law 94-45, funds were authorized to be appropnated to provide a loan of up to $5 million for th~s pu~pos~ from the Federal treasury to the Virgin Islands. Under this leg1slatwn, loan~ could be made only through J une30, 1976, arid would have to .be repaid .by Jan- nary 1· 1978. Loans not repaid by that date would begm to bear mtere~t. The 1975 'egislation also specifies that any loans ma~e. under Its authority would be treated as loans ma~e under the proVISI?ns of the Federal-State. unemployment compensation system at such time as the Vi1:o-in Isi¢tnds becomes a part o:f that system. Under ~hat syst~m, lo&ns not~epaid on a timely basis are collected through an mcrease m the net Federal unemployment payroll tax on employers in the jurisdiction affected. · · · 1 d H.R. 13069, as passed by the House of Representative~, woud mo - ify the legislation passed in ~97? by increasing the max1mum ammmt which may be loaned to the V1rgm Islands unemployment fund ~nd by extending the time when such loans may be made and the deadln~e !or repayment. A $10 million increase in appropriations (fror:r: $5 m1lhon to $15 million) would be al:!thorized. The £un~s appropriated uwter this authority would be available for loans until September 30, 1947, and repayment would be due January 1, 1979. 3 The Committee has accepted this House-passed. I!rovis.ion without modification. The Committee notes that the Adnnmstratlon has rec- ommended that the Virgin Islands be incorporated into the regular Federal-State unemployment c@mpensation program ~nd that legisla- tion to accomplish this objective h~s been reported 1:r: th~ House of Representatives as a part of the bill H.R. 10210 whiCh IS expected to be sent to the Senate later this year. · ASSISTANCE PROGRAl\IS IN THE NORTHERN MARIANAS {See.1J of the bill) The Covenant establishing the Northern Marianas Islands as a new United States territory with Commonwealth status was approved on March 24, 1976 (Public Law 94--241). ~he terms of this coven!lnt pro- vide, in a general way, that Federal assistance programs apphca~le to the other U.S. territories will be extended to the Northern Marianas Common\vealth as of a date to be proclaimed by the President after the constitutio!l of tha~ jurisdictio~ has been draf~ and approved. The Covenant also specifically proVIdes that the Social Secunty Act pro- grams of Supplemental Security Income (SSI) and SJ?ecial social secu- rity benefits for certain aged, uninsured persons will also be made available in the Northern Marianas. . The Committee believes that those who negotiated the Covenant establishing the Northern Marianas Commonwealth acted inappropri- ately in providing therein for that juri~diction to have in fore~ these two Social Security Act programs which Congr~ss .had s.peeifical_ly limited in applicability to the 50 States and the D1stnct of Columbm. Because the covenant had to be approved or rejected as a whole, it was not possible to delete this provision by an amendment during Senate consideration earlier this year. However under the terms of the covenant itself, this .provision is subject to change by subsequent legislation. · The program of special social security benefits for uninsured indi- viduals was incorporated in the Tax Adjust~ent A~~ of ~96~ c;m the basis of a Senate floor amendment. Under this proviSion, mdiVIduals who reached age 72 prior to 1972 could receive a special social se?ur- ity benefit, funded from general revenues, even though they had httle or no coverage in employment under social security. This provision was enacted as a transitional measure, and by this time it applies only to persons who are now 77 years of a~e or over. The committee does not believe that there is any reason for making this program applicable to the territorial jurisdictions. · The program of Supplemental Security Income (SSI) assures a min- imum monthly income of $15-7.70 to aged, blind, and disabled persons in the fifty States and the District of Columbia; for couples, the income support level is $236.60. (In certain States these amounts are au~­ mented by supplementary State payments.) This program was specifi- cally limited to 50 States and the District of Columbia when it was en- acted in 1972. In the territorial jurisdictions of Guam, Puerto Rico, and the Virgin Islands, the Social Security Act provides for separate pro- grams of aid and services for the aged, blind, and disabled. These programs provide for Federal matching of public assistance and so- 4 cial service expenditures up to specified limits. The Committee believes that it is appropriate to continue to provide assistance under these programs which operate through locally developed plans which can take into account the economic and other circumstances prevailing in each territory. The extension of the SSI program to the jurisdiction of Puerto Rico would increase Federal expenditures under that program by some $400 million per year and would make a substantial majority of the aged population in that Commonwealth eligible for that program and potentially eligible for medicaid. ·while the Marianas Covenant covers a much smaller population (less than 15,000) and therefore involves only minimal cost, the Committee believes that the establish- ment of the SSI program there could be taken as a precedent for its expansion to the other territories. Legislation was, in fact, passed bv the House of Representatives earlier this year which would have used the Marianas Covenant as a precedent for making the SSI pro~ram applicable to Guam and which would have authorized the President to extend the pro~ram at a later date to other territories. At the re- quest of the Committee, this provision was deleted from that legislation. The Committee agrees that the new Commonwealth of the Northern Mariana Islands should enjoy the same Federal assistance programs which apply to other territorial jurisdictions. However, extensiOn to that territory or to any territory of programs now limited in scope to the 50 States and the District of Columbia should be accomplished only to the extent that Congress finds appropriate a,fter considering such extension through the usual legislative processes. For the rel.tsons outlined above, the Committee has added to the bill an amendment which will remove the applicability of the Supple- mental Security Income program and the progra-m of special social security benefits for uninsured pereons from the Marianas Common- wealth. The Committee amendment also provides specific statutory language to carry out the general provision in the covenant extending to the Northern Marianas those Social Security A.ct assistance pro- grams which are applicable to the other territories. These programs are aid to the aged, blind, and disabled (titles I, X, XIV, a:b.d XVI of the Social Secl}rity A'?t), aid to_ families with dependent children (title IV), and medica-l assistance (title XIX). The amendment also estab- lishes in title XI ofthe act limitations on Federal funding under these programs which are comparable on a per capita basis to the limita- tions now in force for Guam, Puerto Rico, and the Virgin Islands. III. BuDGETARY IMPACT OF THE LEGISLATION In compliance with section 252 (a) of the Legislative Reorga,nization Act of 1970 and sections 308 and 403 of the Congressional Budget Act of 197 4, the following statements are made concerning the budgetary impact of the bill. The Committee finds that the bill does not provide either new budget authority or new or increased tax expenditures within the meaning of section 30? of the Cc;mgressio~al Bu.dget Act. No ana,lysis of the cost of the brll as provided for m sectiOn 403 of the Congressional Budget Act has been submitted to the Committee. 5 The Committee estimates that, subject to appropriation, section 1 of the bill will result in J;'ederal costs of $2 million in the period July- September 1976 and of $8 million in fiscal year 1977 and in Federal receifts (in the form of a loan repayment) of $10 million in either fisca year 1978 or fiscal year 1979. Section 1 has no fiscal impact beyond 1979. The Committee estimates that section 2 of the bill will have no fiseal impact prior to fiscal year 1978 and that, in fiscal year 1978 and each subsequent year, it will result in a reduction in Federal costs as com- pared with existing law. The Committee does not believe that there is sufficient information to estimate the amount of the savings with any accuracy but states that it would appear to be nominal. IV. vOTE OF THE COMliU'ITEE IN REPORTING THE BILL . In complianoo with section 133 of the Legislative Reol'lganiza.tion Act of 1946, the following statement is made conoorning the v;ote by the committee on the motiOn to report the bill. The bill was ordered reported 'by voice vote. . . v. CHANGES IN EXISTING. LAw In compliance with subsection (4) of rule XXIX of the Standing Rules of the Senate, changes in existing law made by the bill, as ~·eported, are shown as follows (existing law proposed to be omitted IS enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman): SECTION 301 OF THE EMERGENCY CoMPENSATION AND SPECIAL UNEl\I- PLOYl\IENT AssiSTANCE ExTENSION AcT OF 1975 TITLE III-LOANS 'rO THE UNEMPI,OYMENT FUND OF THE VIRGIN ISLANDS SEc. 301. (a) 'l'he Secretary of Llllbor (hereinafter in this section !·eferred to as the "Secretary") may make loans to ·the Virgin Islands ~n such amounts as he dete~ines to be necessary for the payment 1~ any month of. co:npensatiOn under the unemployment compensa- t~on law of the V1rgm Isla-nds. A loan may 'be made under this subsec- tion for the payment of compensation in any month only if- (1) the Governor of the Virgin Islands submits an application therefor no earlier than the first day of the preceding m.onth; and (2) such a.pplication contains an estimate of the amount of the loan which will be required by the Virgin Islands for the pay- ment of compensation in such month. (b) For purposes of this section- (1) an application forloan under subsection (a) shall be made on such foi'J!IS and shall _contain such information a.nd data (fiscal and otherwise) concermng the operation and administration of the unemployment compensation law of the Virgin Islands as the Secretary deems necessary or relevant to the performance of his duties under this section; (2) the am~mn~ required by the Virgin Islands for the payment of compensation many month shall be determined with due allO\Y- 6 ance for contingencies and taking into account all other amounts that will be available in the unemployment fund of the Virgin Islands for the payment of compensation in such month; and (3) the term "compensation" means cash benefits payable to individuals with respect to their unemployment, exclusive of expenses of administration. (c) Any loan made under subsection (a) shall be repayable (with- out interest) not later than January 1, [1978] 1979. If after January 1, (1978] 1979, any ~ortion of any such l~an remains. unp~id1 the Virgin Islands shall·pay mterest thereon, until the loan IS paid m full, at a rate equal to the rate of interest in effect under section 6621 of the Internal Revenue Code of .1954. If at some future date of the Federal Unemployment Tax Act shall be made applicable to the Virgin Is- l.ands, then, any amount of principal or interest due on any such loan remaining unpaid . on such date shall be treated, for purposes of sec- tion 3302{c) (3) ·of the Internal Revenue Code of. 1954, as an advance made •to the Virgin'lslands under title XII of.the Social Security Act. (d) No loan may be made under subsectiOn (a)' for any month beginning after (June 30, 1976] September 30, 1fn7. The. te of the loans which may be made under subsection (a) sh not ex- ceed [$5,000,000] $1B,OO!JfJOO. . ' (e) There are authorized to be appropr1~ted from the gen~ral f~md Of theTl'f'..asury such sums as may be necessary td carry out this sectiOn. • • * * • * * * * THE SOCIAL SECURITY ACT .. * • * * TITLE I-GRANTS TO STATES FOR Ow-AGE AssiSTANCE AND · MEDICAI, AssiSTANCE FOR THE AGED * * * * PAYMENT 'I'O STATES * SEc. 3. (a) From the sums appropriated therefo .. r, the Secretary of the Treasury shall pay to each State which has a plan approved under this· title, for each quarter, beginning with the quarter commencing October 1, 1960- (1) in the case of any State other than Puevto Rico, the Virgin Islands, (and] Guam, and the Ommrwnwealth of the Northern Mariana Islands, an amount equal to the sum of the following proportions of the total amounts expended during each month of such quarter as old-age assistance under the State plan (including expenditures for premiums under part B of title XVIII for indi- viduals who are recipients of money payments under such plan and other insurance premiums for medical or any other type of remedial care or the cost thereof)- * * * * * • * ( 2) in the case of Puerto Rico, the Virgin Islands, [and] Guam, and the 0Mnmonrwe.alth of the Northern Mariana Islands, an amount equal to-- (A) one-half of the total of the sums expended during such quarter as old-age assistance under the State plan (in- * 7 eluding expenditures for premiums under part B of title XVIII for individuals who are recipients of money payments under such plan and other insurance premiums for medical or any other type of .remedial care or the cost thereof), not counting so much of any expenditure with respect to any month as exceeds $37.50 multiplied by the total number of recipients of old-age assistance :for such month; plus (B) the larger of the following amounts: (i) one-half of the amount by which such expenditures exceed the maximum which mav be counted under clause (A), not counting $0 much of any expenditure with respect to any month as ex~ ceeds (I) the product of $45. multiplied by the total number of such recipients of old-age assistance for such J?Onth, ?r (II) if smaller, the total expended as oltl-age ass1stance.m the form of medical or an;y other typ~ o;f rep1edial ca~ ~th respect to such month plus the product of $37.50 multiplied by the total number of such. recipient~, or;'( ii) 15 per' cen~um of the total of the sums expendeddurJ,llg such quarter as old- age assistance u:ndef the Sfute plan in the form of me<:lkal or any other typ~ of remedial care,. not counting. so mneh of any expenditm:-e ,with ,re~pect to . any month as .exceeds the product of $7.50 multtphed by the total num}:Jer of such re- cipients of old-age assistance for such month; . * * • ~ * * TITLE IV-GP ... ~NTs To STATEs Foil Am AND SERVICEs To NEEDY FAMI- LIEs \V ITII CHILDREN AND FOR CrllLD-WELFARE . SERVICES * * ·* * PAYMENT TO STATES SEc. 403. (a) From the sums appropriated therefor, the Secretary of the Treasury shall pay to each State which has an approved plan for aid and services to needy families with children, for each quarter, beginning with the quarter commencing October 1, 1958-:- . . (1) in the case of any State other than Puerto RICo, the VIrgm Islands, [and] Guam, and the OowmQJ),wealth o.f the Nort~rn 1lf ariana Islands, an amount equal to the sum of the followmg proportions of the total amounts· expended during such quarter as aid to families with dependent children under the State p!an (including expenditures for premiums under part B of title XVIII for individuals who are recipients of money payments un- der such plan and other insurance premiums for medical or any other type of remedial care or the cost thereof)- * * * * * * * (2) in the case of Puerto Rico, the Virgin Islands, [and] Guam, and the Commonwealth of the Northern Mariwa Isla:nds, an amount equal to one-half of the total of the sums expended durmg such quar~er as aid to families with dependent children under the State plan (m- cluding expenditures for premiums under part B of Title XVIII for individuals who are recipients of money payments under such plan and other insurance premiums for medical or any other type of r~­ medial care or the cost thereof) not counting so much of any expendi- 8 ture with respect to any month as exceeds $18 multiplied by the total number of recipients of such aid for such month; and * * * * * * * ALLOTMI~NT PERCENTAGE AND FEDERAL SHARE SEc. 423. (a) The "allotment percentage" for any State shall be 100 per centum less the State percentage; and the State percentage shall be the percentage which bears the same ratio to 50 l?er ?entum as the per capita income of such State bears to the per capita mcome o_f the United States; except that (1) the allotment percentage shall m no case be less than 30 per centum or more than 70 per centum, and ( 2) the allotment percentage shall be 70 per centum in the case of Puerto Rico, the Vir~n Islands, [and] Guam, and the Commonwealth of the Northern M aTUJ,na Islands. (b) The "Federal share" for any State for any fiscal year shall be 100 per centum less that percentage which bears the same ratio to 50 per centum as the per capita income of such States ~ears to the per capita; income of the United States, except that (1) m no case shall the Federal share be less than 33% per centum or more than 66% per centum, and (2) the Federal share shall be 66% per centum in the case of Puerto Rico, the Virgin Islands, [and] Guam, and the C017~mon­ wealth of theN orthern Mariana Islands. * * * * * * * PAYMENTS TO STATES SEc. 1003. (a) From the sums appropriated therefor, the Secretary of the Treasury shall pay to each State which has an approved plan for aid to the blind, for each quarter, beginning with the quarter commenc- ing October 1, 1958- . . ( 1) in the case of any State other than Puerto Rico, the VIr- O'in Islands, [and] Guam, and the Commonwealth of the North- ~rn Mariana Islands, an amount equal to the sum of ,the fol- lowing proportions of ~he total amounts expended. durm.g such quarter as aid to the blmd under the State _,plan (mcludm~ e~­ penditures for premiums under part B of title XVIII for mdi- viduals who are recipients of money payments under such plan and other insurance premiums for medical or any other type o£ remedial care or the cost thereof)- * * * * * * * (2) in the case o£ Puerto Rico, the Virgin Islands, [and] Guam and the Comml()nwealth of the Northern Mariana Island8, an amount equal to one-hal£ o£ the total of the sums expended during such quarter as aid to the blind under the State plan (in- cludinrr expenditures for premiums under part B o£ title XVIII for individuals who are recipients o£ money payments under such plan and other insurance premiums for medical or any other type of remedial care or the cost thereof), not counting so much of an.y expenditure with respect to any month as exceeds $37.50 mnltl- plied by the total number of recipients of aid to the blind for snch month; and * * * * * * 9 TITLE XI-GENERAL PROVISIONS AND PROFESSIONAL STANDARDS REVIEW PART A--GENERAL PROVISIONS DEFINITIONS SEc. 1101. (a) When used in this Act- (1) The term "State", except where otherwise provided, ~ncludes the District of Columbia and the Commonwealth of Puerto RICo, and when used in titles IV, V, VII, XI, and XIX includes the Virgin Is- lands [and], Guam, and the Comrrwnwealth of the Northern Mari;ana I 8lands. Such term when used in title V also includes Amen can Samoa and the Trust Territory of the Pacific Islands. In the case of Puerto Rico, the Virgin Islands, t[and] Guam, and the Common- wealth of the Northern Mariana Islands, titles I, X, and XIV, and title XVI, (as in effect without regard to the amendment made by section 301 of the Social Security Amendments of 1972) shall con- tinue to apply, and the term "States" when used in such titles (but not in title XVI as in effect pursuant to such amendment after Decem- ber 31, 1973) includes Puerto Rico, the Virgin Islands, [and] Guam, and the Commwnwealth of the Northern jJfariana Islands. (2) The term "United States" when used in a geographical sense means, except Wihen otherwise provided, the States. (3) The term "person" means an individual, a trust or estate, a partnership, or a corporation. ( 4) The term "corporation" includes associations, joint-stock com- panies, and insurance ~ompanies. . . . ( 5) The term "shareholder" includes a member m an assocmtwn, joint-stock company, or insurance company. . (6) The term "Secretary", except when the context otherwise re- quires, means the Secretary of Health, E~ucation, and Welfar~. . (7) The terms "physician" and "medical care" and "hospitahz~­ tion" include osteopathic practitioners or the services o~ osteopathic practitioners and hospitals within the scope of their practice as defined by State law. ( 8) (A) The "Federal percentage" for any State (other than Puerto Rico. the Virgin Islands, [and] Guam, and the Common1oealth of the Northern Mariana Islands) shall be 100 per centum less the State per- centage; and the State percentage shall be that percentage which bears the same ratio to 50 per centum as the square of the per capita income of such State bears to the square of the per capita income of the United States; except that the Federal percentage shall in no case be less than 50 per centum· or more than 65 per centum. (B) The Federal percentage for each State (other than Puerto Rico, the Virgin Islands, [and] Guam, and the Commonwealth of the Northern jJ[ ariana Islands) shall be promulgated by the Secretary be- tween July 1 and August 31 of each even-numbered year. on the basis of the average per capita income of each State and of the United States for the three most recent calendar years for which satisfactory data are available from the Department of Commerce. Such promnlgation shall be conclusive for each of the eight quarters in the periofl begin- ing July 1 next succeeding such promulgation: Provided, That the 10 Secretary shall promulgate such percentage as soon as possible aft~r the enactment of the Social Security Amendments of 1958, which pro- mulgation shall be conclusive for each of the eleven quarters in the period beginning October 1, 1958, and ending with the close of June 30, 1961. (C) The term "United States" means (but only for purposes of subparagraphs (A) and (B) of this paragraph) the fifty States and the District of Columbia. * * * * * LUIITATION ON PAYMENTS TO PTIERTO RICO, THE VlRGIN ISLA1'."'DS1 AND GUAM SEc. 1108. (a) Except as provided in 2002(a) (2) (D), the total amount c~rtified by the Secretary of Health, Education, and \tVelfare under title I, X, XIV, and XVI, and under part A of title IV ( exclu- si\re of any amounts on account of services and items to whicb: subsec- tion (b) applies)- (1) for payment to Puerto Rico shall not exceed- (A) $12,500,000 with respect to the fiscal year'1968, (B) $15,000,000 with respect to the fiscal year 1969, (C) $18,000,000.with respect to the fiscal year 1970, (D) $21,000,000 with respect to the fiscal yearl971, or (E) $24,000,000 with respect to the tiscalyear 1972 and each fiscal year thereafter; . · (2) for payment to the Virgin Islands shall not exceed- ( A) $425,000 with respect to the fiscal year 1968, (B) $500,000 with respect to the fiscal year 1969; (C) $600,000 with respect to the fiscal year 1970, (D) $700,000 with respect to the fiscal year 1971, or (E) $800,000 with respect to the fiscal year 1972 and each fiscal 'year thereafter; [and] ·. ( 3) for payment to Guam shall not exceed- · (A) $575,000 with respect to the fiscal year 1968, (B) $690,000 with respect to the fiscal year 1969, (C) $825,000 with respect to the fiscal year 1970, (D) $960,000 with respect to the fiscal year 1971, or (E) $1,100,000 with respect to the fiscal year 1972 and each fiscal year thereafter [.] ; and ( 4) for payment to the 0 omrrum;we.atth Qj the Northern J.l! ariana Islands shall wt emoeed $190,000 'W'tth respect to any fiaoal yeat'. (b) The total amount certified by the Secretary under part A of title IV, on account of family planning services and services provided under section 402 (a) ( 19) with respect to any fiscal year- ( 1) for payment to Puerto Rico shall not exceed $2,000,000, (2) for payment to the Virgin Islands shall not exceed $65,000, [and] (3) for payment to Guam shall not exceed $90,000[.], and (4) for payment to the 0orn'flW11;wealth of the Northern Mari- ana Islands shall not emceed $1l'i,OOO. (c) The total amount certified by the Secretary under title XIX with respect to any fiscal year- ( 1) for payment to Puerto Rico shall not exceed $30,000,000, r ,. 11 (2) for payment to the Virgin Islands shall not exceed $1,000,000, [and] (3) for payment to Guam shall not exceed $900,000[.], and (4) for payment to the Commonwealth of the Northm'n Mariana Islands shallwt emceed $160,000. · · (d) Notwithstanding the provisions of section 502(a) and 512(11) of this Act, and the provisions of sections 421, 503(1), and 504(1) of this Act as amended by the Social Security Amendments of 1967, and until s~ch tim~ as the Congress may by appropriati?~ ?r other law otherwise provide,· the Secretary shall, m heu of the 1mt1al allotment specified in such sections, allot such smaller amounts to Guam, Ameri- can Samoa, the Commonwealth of the Northern Mariana Islands, and the Trust Territory of the Pacific Islands as he may deem appropriate. TITLE XIV~GRANTS TO STATES FOR AID TO THE PERMANENTLY AND TOTALLY DISABLED ·* ) . * * '* PAY:UENTS TO STATES SEC. 1403. (a) F~om th,e sums appropriated tl~erefor, the' secretary of tb~ Treasury shall pay to each State which.has an ;approved plan for a1d to the permanently .. and totally disabled, for each quarter, beginning with the quarter commencing October 1, 1958-'- · . (1) in the case of any State other than Puerto Rico, the Virgin . Islands, [and] Guam, and the Oommomvealth.of the Nort/Lern Mariana Islands, an amount equal to the sum of the. following proportions of the total amounts expended during such quarter as aid to the permanently and totally disabled under the State plan (including expenditures for premiuins under part B of title XVIII for individuals who are recipients of money payments under such plan and other insurance premiums for medical or any other type of remedial care or the cost thereof)- * . * * * * * * (2) in the case of Puerto Rico, the Virgin Islands, [and] Guam, and the Oomm.(}WU)ealth of the Northern Marialn.a Islands, an amount equal to one-half of' the total of the sums expended during such quar- ter as aid to the permanently and totally disabled under the State plan (including- expenditures for premiums under part B of title XVIII for individuals who are recipients of money payments under snch plan and other insurance premiums for medical or any other type of remedial care or the cost thereof), not counting so much of any expenditure with respectto any month as exceeds $3.50 multiplied by the total number of recipients of aid to the permanently and totallv disabled for such months; and · " * * TITLE XVI-GRANTS TO STATES FOR AID TO THE AGED, BLIND, ORDISABLED, OF FOR SUCH AID AND MEDICAL ASSISTANCE FOR THE AGED * * * * * * 12 PAYMENTS TO STATES SEc. 1603. (a) From the sums appropriated therefor, the Secretary shall pay to each State which has a plan approved under this title, for each quarter, beginning with the quarter commencing October 1~ 1962- (1) in the case of any State other than Puerto Rico, the Virgin Islands, [and] Guam, and the Commumw'ealth of the N ortlwrn M a.riatna Islands, an amount equal to the sum of the following pro- portions of the total amounts expended during each month of such quarters to the aged, blind, or disabled under the State plan (in- cluding expenditures for premiums under Part B of title XVIII for individuals who are recipients of money payments under such plan and other insurance premiums for medical or any other type of remedial care or the cost thereof)- * * * * * * * (2) in the case of Puerto Rico, the Virgin Islands, [and] Guam, and the Commonwealth of the Northern Mariana Islands, an amount equal to- (A) one-half of the total of the sums expended during such quarter as aid to the aged, blind, or disabled under the State plan (including expenditures for premiums under part B of title XVIII for individuals who are recipients of money pay- ments under such plan and other insurance premiums for medical or any other type of remedial care or the cost thereof), not counting so much of any expenditure with respect to any month as exceeds $37.50 multiplied by the total number of recipients of aid to the aged, blind, or disabled for such month; plus (B) the larger of the following amounts: (i) orie-half of the amount by which such expenditures exceed the maximum which may be counted under clause (A), not counting so much of any expenditure with respect to any month as exceeds (I) the product of $45 multiplied by the total number of such recipients of aid to the aged, blind, or disabled for such month, or (II) if smaller, the total expended as aid to the aged, blind, or disabled in the form of medical or any other type of remedial care with respect to such month plus the product of $37.50 multiplied by the total number of such recipients, or ( ii) 15 per centum of the total of the sums expended during such flUarter as aid to the aged, blind, or dis- abled under the State plan in the form of medical or any other type of remedial care, not counting so much of any expenditure with respect to any month as exceeds the product of $7.50 multi- plied by the total number of such recipients of aid to the aged, blind, or disabled :for such month; * * * * * * * TITLE XIX GRANTS TO STATES FOR MEDICAL ASSIST- ANCE PROGRAMS * * * * * * * SEc. l905(a) * * * (b) The term "Federal medical assistance percentage" for any State shall be 100 per centum less the State percentage; and the State 13 percentage shall be that percentage which bears the same ratio to 45 per centum as the square of the per capita income of such State bears to the square of the per capita income of the continental United States (including Alaska) and Hawaii; except that (l) the Federal medical assistance percentage shall in no case be less than 50 per centum or more than 83 per centum, and (2) the Federal medical assistance per- centage for Puerto Rico, the Virgin Islands, <[and] Guam, and the Commonwealth of the Northern Mariana Islands shall be 50 per centum. The Federal medical assistance percentage :for any State shall be determined and promulgated in accordance with the provi- sions of subparagraph (B) of section 1llO(a) (8). * * * * * * * PUBLIC LAW 90-248 SEc.248 (a) * * * (b) Notwithstanding subparagraphs (A) and (B) of section 403 (a) ( 3) of such Act f as amended by this Act) , the rate specified in such subparagraphs m the case of Puerto Rico, the Virgin Islands, [and] Guam, and the Commonwealth of the Northern Mariana Islands shall be 60 p~r centum (rather than 7 5 or 85 per centum). (c) EffectiVe J ul;r 1, 1969, neither the provisi~ns of clauses (A) through (C) of sectwn 402 (a) ( 7) of such Act as m effect before the enactment of this Act nor the provisions of section 402(a) (8) of such Act as amended by section 202 (b) of this Act shall apply in the case of Puerto Rico, the Virgin Islands, [or] Guam, or the 0orrlll1W11!UJealth of the Northern Mariana Islands. Effective no later than July 1 1972, the State plans of Puerto Rico, the Virgin Islands, [and] Gua~, and the [1 ommonwealth of the Northern Mariana Islands approved under ~ectwn _402 of such A~t s~all provide :for the disregarding of income m makmg the determmatwn under section 402(a) (7) of such Act in amounts ( ag~eed to between the Secretary and ~he ~tate a~encies in- volved) sufficiently lower than the amounts specified m sectwn 402(a) _(8) of such Act to reflect appropriately the applicable differences in mcome levels. (d) :r'he amendment made by section 220 (a) of this Act shall not apply m the case of Puerto Rico, the Virgin Islands, [or] Guam or the Commonwealth of the Northern Mariana Islands. ' (e) Effect.ive with respect ~o. quarters after 1967, section.1905 (b) of such Act IS amended by strikmg out "55 per centum" and mserting in lieu thereof "50 per centum". * * * * * * * PuBLIC LAw 93-647 * * * * * * * SEc. 7. (a) * * * (b) The amendments made by section 3 of this Act shall be effective with respect to payments under sections 403 and 603 of the Social Security Act for quarters commencing _after September 30, 1975, ex- ce_Pt that the amendments made by sectiOn 3(a) shall not be effective with respect to the Commonwealth of Puerto Rico, the Virgin Islands, [or] Guam, or the Commonwealth of the Northern Mariana Islands. 0 H. R. 13069 Rinct~~rourth <Longrcss of the ilnittd ~tatcs of america AT THE SECOND SESSION Begun and held at the City of Washington on Monday, the nineteenth day of January, one thousand nine hundred and seventy-six Sin Slct To extend and increase the authorization for making loans to the unemployment fund of the Virgin Islands. Be it enMted by the Senate and House of Representatives of the United States of America in Oongress assembled, That (a) subsection (d) of section 301 of the Emergency Compensation and Special Unem- ployment Assistance Extension Act of 1975 is amended- (1) by striking out "June 30, 1976" and inserting in lieu thereof "September 30, 1977"; and (2) by striking out "$5,000,000" and inserting in lieu thereof "$15,000,000". (b) Subsection (c) o£ such section 301 is amended by striking out "January 1, 1978" each place it appears and inserting in lieu thereof "January 1, 1979". Speaker of the House of Representatives. Vice P1'e8iilent of the United States and President of the Senate.