2017 interest rate on Title XII UI advances

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                 UI
               ADVISORY SYSTEM                            CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                        OUI/DFAS
             Washington, D.C. 20210                       DATE
                                                          January 27, 2017


ADVISORY:       UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 11-17

TO:             STATE WORKFORCE AGENCIES

FROM:           BYRON ZUIDEMA /s/
                Deputy Assistant Secretary

SUBJECT:        Interest Rate on Title XII Advances During Calendar Year (CY) 2017

1. Purpose. To announce the rate of interest that the U.S. Department of the Treasury
   (Treasury) will charge on Title XII advances during CY 2017.

2. References.
    Sections 303 and 1202 of the Social Security Act (SSA);
    Section 3304 of the Federal Unemployment Tax Act (FUTA); and
    20 CFR part 606.

3. Background. The criteria for establishing the rate of interest to be charged on Title XII
   advances during any CY are described in Section 1202(b)(4), SSA (42 U.S.C. §1322(b)(4)).

4. CY 2017 Interest Rate. Treasury has established the rate above for the quarter ending
   December 31, 2016, to be 2.2124 percent. As such, this becomes the rate of interest that will
   be charged to repayable Title XII advances during CY 2017.

5. Action Requested. States expecting to request a Title XII advance should take necessary
   action to establish a mechanism to provide funds for the payment of interest on those
   advances, in accordance with the provisions of Section 1202(b), SSA (42 U.S.C §1322(b)),
   and subject to the limitations in Section 303(c)(3) and 1202(b)(5), SSA (42 U.S.C.
   §§503(c)(3) and Section 1322(b)(5)) and Section 3304(a)(17), FUTA (26 U.S.C.
   §3304(a)(17)).

   In summary, interest is due and payable each September 30, and may not be paid from the
   state’s unemployment fund or from Federal funds. However, there are several provisions for
   interest relief, including “Cash flow loans,” “May/September delays,” “High unemployment
   deferrals,” and “High unemployment delays.” For further information concerning relief from
   Title XII interest payments, see 20 CFR part 606, subparts D and E.

6. Inquiries. Questions should be directed to the appropriate Regional Office.


 RESCISSIONS                                             EXPIRATION DATE
 None                                                    December 31, 2017