1990 budget law changes to unemployment compensation

U.S. Department of Labor
Employment and Training Administration
Washington, D.C. 20210
Classification: UI
Correspondence symbol: TEURA
Issue date: February 15, 1991
Rescissions: None
Expiration date: March 31, 1992
Directive: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 12-91
To: ALL STATE EMPLOYMENT SECURITY AGENCIES
From: DONALD J. KULICK, Administrator for Regional Management
Subject: The Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508)--Provisions Affecting the Federal-State Unemployment Compensation Program

1. Purpose. To advise State agencies of the provisions of the Omnibus Budget Reconciliation Act of 1990, P.L. 101-508, which affect the Federal-State Unemployment Compensation Program.

2. References. Sections 5021, 11333, 11403, and 11404 of P.L. 101-508.

3. Background. On November 5, 1990 the President signed into law the Omnibus Budget Reconciliation Act of 1990 (OBRA 90), P.L. 101-508. OBRA 90 contains four provisions which affect the Federal-State unemployment compensation (UC) program. Following is a summary of the changes made.

   Section 5021 amends Sections 903(a)(2) and 903(c)(2) of the Social Security Act (SSA). Section 903(a)(2), SSA, is amended to specify that future Reed Act distributions will be based on the Federal taxable wage base rather than the State taxable wage base, and to change the basis upon which determinations concerning such distributions are to be made by the Secretary of Labor. Section 903(c)(2) (D), SSA, is amended to delete the 35-year limitation on the obligation of Reed Act funds for administration. In practical effect, this means Reed Act funds may be appropriated and obligated for administrative purposes indefinitely. However, because this provision is not effective until October 1, 1991, all States will experience a period during which some Reed Act funds may not be obligated. In addition, a clarification concerning the time when a charge against Reed Act funds must be made was added, as was a requirement that States account for Reed Act money in accordance with standards established by the Secretary of Labor.

   Section 11333 amends Section 3301 of the Federal Unemployment Tax Act (FUTA) to extend the 0.2 percent temporary tax under FUTA through December 31, 1995. The gross FUTA tax remains at 6.2 percent, the maximum offset at 5.4 percent, and the net tax at 0.8 percent. OBRA 90 did not extend Section 901(g)(1) of the Social Security Act which governed the transfer from the Employment Security Administration Account (ESAA) of an amount equal to the 0.2 percent temporary tax for calendar years 1988, 1989, and 1990, with fifty (50) percent allocated to the Extended Unemployment Compensation Account (EUCA) and fifty (50) percent allocated to the Federal Unemployment Account (FUA). Therefore, for calendar years 1991 through 1995, there will be no special rule for transfers from the ESAA. Instead, 10 percent of the 0.8 percent net tax will be transferred to the EUCA pursuant to Section 905(b)(1) of the Social Security Act.

   Sections 11403 and 11404 amend the Internal Revenue Code (IRC) to extend, with certain changes, until December 31, 1991, exclusions from an employee's gross income for amounts paid by an employer for certain educational assistance and amounts contributed by an employer to a qualified group legal services plan for an employee. Such amounts excluded from an employee's gross income are excluded from the definition of "wages" under Sections 3306(b)(12) and 3306(b)(13), FUTA.

4. Action Required. SESAs are requested to notify appropriate staff of these provisions.

5. Inquiries. Inquiries should be directed to your Regional Office.

6. Attachments.

   I. Text, explanation and interpretation of changes affecting the Federal-State Unemployment Compensation program

   II. Draft Language for State Laws

Attachment I
Official attachment: https://oui.doleta.gov/dmstree/uipl/uipl91/uipl_1291a1.pdf

UIPL 12-91 Attachment I

TEXT, EXPLANATION AND INTERPRETATION OF
CHANGES AFFECTING THE FEDERAL-STATE
UNEMPLOYMENT COMPENSATION PROGRAM

Made by Public Law 101-508

(Sections 5021, 11333, 11403, and 11404)

I.     Section 5021. Amendments to Sections 903(a)(2) and 903(c)(2), SSA

       A.      Text of Amendment.

         SEC. 5021. AMOUNTS TRANSFERRED TO STATE UNEMPLOYMENT
COMPENSATION PROGRAM ACCOUNTS.

                      (a)     ALLOCATION OF AMOUNTS.--Paragraph (2) of section 903(a) (42 U.S.C.
1103 (a)(2)) is amended to read as follows:

                       "(2)   Each State's share of the funds to be transferred under this subsection as of any
October 1--

                       "(A) shall be determined by the Secretary of Labor and certified by such Secretary to
the Secretary of the Treasury before such date, and

                       "(B)   shall bear the same ratio to the total amount to be so transferred as--

                                "(i) the amount of wages subject to tax under section 3301 of the Internal
Revenue Code of 1986 during the preceding calendar year which are determined by the Secretary of Labor to be
attributable to the State, bears to

                              "(ii)   the total amount of wages subject to such tax during such year."

                       (b)   USE OF TRANSFERRED AMOUNTS.--Paragraph (2) of section 903(c) (42
U.S.C. 1103(c) (2)) is amended --

                              (1)     by striking "and" at the end of subparagraph

                              (c), and

                              (2)     by striking so much of such paragraph as follows subparagraph (C) and
inserting the following:

                       "(D)(i) the appropriation law limits the total amount which may be obligated under such
appropriation at any time to an amount which does not exceed, at any such time, the amount by which --

                              "(I)     the aggregate of the amounts transferred to the account of such State
pursuant to subsections (a) and (b), exceeds

                            "(II) the aggregate of the amounts used by the State pursuant to this subsection
and charged against the amounts transferred to the account of such State, and

                       "(ii) for purposes of clause (i), amounts used by a State for administration shall be
chargeable against transferred amounts at the exact time the obligation is entered into, and

                      "(E)    the use of the money is accounted for in accordance with standards established by
the Secretary of Labor."

                       (c)     EFFECTIVE DATE.--The amendments made by this section shall apply to fiscal
years beginning after the date of the enactment of this Act.

       B.      Discussion.

               1.     Section 903, SSA, provides for the transfer (or "distribution") of certain amounts,
commonly called Reed Act funds, to the States when the balances in certain accounts in the Unemployment
Trust Fund reach the ceiling levels specified in Title IX, SSA. Section 903(a)(2), SSA, provides the formula for
allocating Reed Act funds to the States. Prior to amendment this formula provided that each State's share of the
Reed Act funds to be transferred was based on a ratio relating to State taxable wages as defined in that section.
Section 5021 of the OBRA 90 amended Section 903(a)(2), SSA, to provide that future Reed Act distributions
will be based on Federal taxable wages instead of State taxable wages.

               2.      Prior to amendment, Section 903(c)(2)(A), SSA, required the Secretary of Labor to
determine the amount to be transferred to the States "on the basis of reports furnished by the States to the
Secretary of Labor before September 1." Because the determination of the amount to be transferred is no longer
based on the State's taxable wage base, there is no need for States to furnish these reports. Accordingly, Section
5021(a) of the OBRA 90 amended Section 903(a)(2)(A) to delete reference to State reports.

                3.      Prior to the amendment to Section 903(c)(2), SSA, Reed Act funds transferred to the
States were available for obligation for specified administrative purposes only within a limited number of years
(specified in Section 903(c)(2)(D), SSA) from the date of the transfer. Depending on the State's 12-month
period for Reed Act purposes, this period has varied from slightly more than 34 years up to 35 years. As a result
of this "35-year limitation," authority to obligate Reed Act funds transferred in 1956 has expired in some States
and is due to expire in all States by June 30, 1991. Section 5021, OBRA 90, amended Section 903(c)(2)(D) to
remove the 35-year limitation on the obligation of Reed Act funds, effective October 1, 1991.
Section 5021(c), OBRA 90, sets the effective date of the amendments in subsections (a) and (b) of Section 5021
as applying to fiscal years beginning after the date of enactment of OBRA 90. Consistent with the use of the
term "fiscal year" elsewhere in Section 903, SSA, "fiscal year" means the Federal fiscal year beginning October

1. OBRA 90 was enacted on November 5, 1990, and the first Federal fiscal year beginning after this date begins
on October 1, 1991. Therefore, the effective date for the amendments to Sections 903(a) and 903(c) is October
1, 1991. As a result of this effective date, all States will experience a "gap" between the expiration of the
35-year period and October 1, 1991, during which Reed Act funds transferred in 1956 may not be obligated for
any administrative purpose, and some States will also experience a similar "gap" with respect to obligation of
Reed Act funds transferred in 1957.

States using 12-month periods beginning on October 1 (for purposes of accounting for Reed Act obligations)
lost the authority to obligate Reed Act funds transferred in 1956 as of September 30, 1990. States using
12-month periods beginning on January 1 lost the authority to obligate such Reed Act funds as of December 31,
1990, and States using 12-month periods that begin on July 1 will lose such authority to use such funds on June
30, 1991. Similarly, any State using 12-month periods beginning on September 1, lost the authority to obligate
Reed Act funds transferred in 1956 as of August 31, 1990, and will also lose the authority to obligate Reed Act
funds transferred in 1957 as of August 31, 1991. The States' authority to obligate Reed Act funds transferred in
1956 and 1957 will be restored upon the amendments made by Section 5021, OBRA 90, becoming effective on
October 1, 1991.

Although the 35-year limitation will expire as of September 30, 1991, Section 903(c)(2)(D)(i) will continue to
limit the amount of Reed Act funds which may be obligated at any time. In effect, a State may not obligate an
amount in excess of the amount that equals the difference between the total amount transferred to the State
under Section 903 and amounts previously used and charged against transferred amounts. Thus, in regard to
calculating the amount available for obligation at any time, there is no substantive change from prior law.
However, new Section 903(c)(2)(D)(ii) expresses a charging rule that is merely implicit in the last sentence of
present Section 903(c)(2). Thus, clause (ii) specifies that (in determining the amounts available for obligation)
amounts used by a State for administration shall be chargeable against the transferred amounts "at the exact time
the obligation was entered into." Therefore, at no time may a State enter into an obligation of Reed Act funds in
an amount which exceeds the amount of unused Reed Act funds then standing to the credit of the State in the
Unemployment Trust Fund at the exact time any such obligation is entered into.

                4.      Section 5021, OBRA 90, added a new subparagraph (E) to Section 903(c)(2), SSA, which
requires that the use of Reed Act funds be accounted for in accordance with standards established by the
Secretary of Labor. We will provide more information regarding the Secretary's accounting standards in the
future. In the meantime, those accounting rules set forth in Section 3040 of Part IV of the Employment Security
Manual shall continue to be followed.

       C.      Amendments to State Law and Reed Act Appropriations.

        1.     A State which desires to take advantage of the removal of the 35-year time limit made by Section
5021 of OBRA 90 should amend the provision in its law authorizing the use of Reed Act money which may still
be available. Otherwise, if the law retains the previous 35-year limitation, the law will conflict with any
appropriation act which correctly refers to the new language included in OBRA 90 and will raise issues under
Federal law. These amendments should be made effective no earlier than October 1, 1991.

        2.      In the past we have found that some States enacting Reed Act appropriation bills have not
included all of the requirements contained in Section 903(c)(2) of the Social Security Act. In doing so, these
States have raised issues as to the consistency of such bills with those requirements. To help prevent such issues
from arising in the future, we are including two draft appropriation bills in Attachment II which include all of
the provisions necessary to satisfy the requirements of Section 903(c)(2) of the Social Security Act for Reed Act
appropriations authorizing the obligation of money on and after October 1, 1991. We strongly urge that States
make use of these draft bills.

        3.      Reed Act appropriation acts which authorize obligation prior to October 1, 1991, must continue
to contain the 35-year limitation. For these appropriations, States should use the recommended Reed Act
appropriation language found in Attachment III to UIPL 4-83. States wishing to regain authority to obligate
Reed Act funds immediately on October 1, 1991, without enacting a new appropriations act, should add a
sentence to the section containing the 35-year limitation. This sentence should state that the 35-year limitation is
not in force, effective October 1, 1991.

For example, a State wishes to appropriate and obligate $300,000 of Reed Act funds, $100,000 of which was
transferred in 1956. This State has a fiscal year beginning July 1. Therefore, the authority to obligate 1956 Reed
Act money expires June 30, 1991. The State may appropriate the entire $300,000, but, due to the 35-year
limitation, the State may not obligate the $100,000 transferred in 1956 after June 30, 1991. However, if the
appropriation law limits the applicability of the 35-year requirement to the period ending September 30, 1991,
the $100,000 in 1956 Reed Act money previously appropriated will again become available for obligation on
October 1, 1991.

       D.      Effective Date.        Under Section 5021(c) of OBRA 90, the amendments made by Section
5021 apply to fiscal years beginning after the date of enactment. In other words, as discussed above in Section

B.2., these amendments will be effective October 1, 1991. Until then, the present law, including the 35-year
limitation on obligation, will remain in effect.


II.    Section 11333.         Amendments to Section 3301, FUTA.

       A.      Text of Amendment.

       SEC. 11333. EXTENSION OF FUTA SURTAX

               (a)    IN GENERAL.--Section 3301 (relating to rate of FUTA tax) is amended--

                      (1)     by striking "1988, 1989, and 1990" in paragraph (1) and inserting "1988 through
1995", and

                      (2)     by striking "1991" in paragraph (2) and inserting "1996".

             (b)     EFFECTIVE DATE.--The amendments made by this section shall apply to wages paid
after December 31, 1990.

        B.      Discussion. Section 3301, FUTA was amended by Section 11333(a) of OBRA 90 to extend
the 0.2 percent temporary tax through December 31, 1995. However, in extending the 0.2 percent temporary tax,
Congress did not extend Section 901(g), SSA, which established special rules for calendar years 1988, 1989,
and 1990, for the distribution of the amount equal to the amount raised by the 0.2 percent temporary tax.
OBRA 90 did not extend Section 901(g) (1) of the Social Security Act which governed the transfer from the
Employment Security Administration Account (ESAA) of an amount equal to the 0.2 percent temporary tax for
calendar years 1988, 1989, and 1990, with fifty (50) percent allocated to the Extended Unemployment
Compensation Account (EUCA) and fifty (50) percent allocated to the Federal Unemployment Account (FUA).
As a result of the expiration of Section 901(g), SSA, there will be no special distribution of the amount equal to
the revenue generated by the 0.2 percent temporary tax on wages paid after December 31, 1990. As to wages
paid after December 31, 1990, therefore, distributions of the amounts appropriated to the ESAA under Section
901(b)(1), SSA, will be as provided in Title IX, SSA, without consideration of the special rules in Section
901(g). Of the amount equal to the net tax of 0.8 percent, which is appropriated under Section 901(b)(1) and
transferred to the ESAA under Section 901(b)(2) (less repayments under Section 901(b)(3)), ten (10) percent of
such amount is transferred from time to time from the ESAA to the EUCA in accordance with Section
905(b)(1), SSA. There is no other distribution of the amount of the net 0.8 percent which is appropriated and
transferred to the ESAA.

     C.      Effective Date.          The amendments made by Section 11333(a) shall apply to wages paid after
December 31, 1990.

       D.      Implementation.        The Internal Revenue Service is responsible for collecting the temporary
tax.

III.          Section 11403.       Amendments to Section 127 of the Internal Revenue Code of 1986 and
Section 7101 of the Revenue Reconciliation Act of 1989 (P.L. 101-239).

       A.      Text of Amendment.

       SEC. 11403. EMPLOYER-PROVIDED EDUCATIONAL ASSISTANCE.

               (a)    IN GENERAL.--Subsection (d) of section 127 (relating to educational assistance

programs) is amended by striking "September 30, 1990" and inserting "December 31, 1991".

               (b)   REPEAL OF LIMITATION ON GRADUATE LEVEL ASSISTANCE.--Section
127(c)(1) is amended by striking the last sentence.

               (c)    CONFORMING AMENDMENT.--Subsection (a) of section 7101 of the Revenue
Reconciliation Act of 1989 is amended by striking paragraph (2).

               (d)    EFFECTIVE DATES.--

                        (1)     IN GENERAL.--Except as provided in paragraph (2), the amendments made by
this section shall apply to taxable years beginning after December 31, 1989.

              (2)      SUBSECTION            (b).--The amendment made by subsection (b) shall apply to taxable
years beginning after December 31, 1990.

         B.      Discussion. Section 3306(b)(13), FUTA, excludes from the definition of wages "any payment
made, or benefit furnished, to or for the benefit of an employee if at the time of such payment or such furnishing
it is reasonable to believe that the employee will be able to exclude such payment or benefit from income under
section 127 . . ." of the IRC. Prior to the amendments made by Section 11403 of OBRA 90, Section 127, IRC,
which excludes from gross income of the employee certain amounts paid, or expenses incurred, by the employer
for educational assistance to the employee, did not apply to taxable years beginning after September 30, 1990.
Section 11403(a) of OBRA 90 amended Section 127, IRC, to extend the exclusion from income of
employer-provided educational assistance benefits through taxable years beginning before January 1, 1992
(effective for taxable years beginning after December 31, 1989). In addition, Section 11403(b) struck the last
sentence of Section 127(c)(1), IRC, repealing the exclusion of graduate level assistance from the definition of
educational assistance. Finally, Section 11403(c) repealed Section 7101(a)(2) of the Revenue Reconciliation Act
of 1989 (Title VII of the Omnibus Budget Reconciliation Act of 1989), which provided that, for taxable years
beginning in 1990, only those amounts paid prior to October 1, 1990 by the employer for educational assistance
to the employee were to be taken into account in determining the amount excludable from the employee's
income under Section 127.

       C.      Effective Dates.              The amendments made by subsections (a) and (c) of Section
11403, OBRA 90, apply to taxable years beginning after December 31, 1989. The amendment made by
subsection (b) of Section 11403, repealing the provision on graduate level assistance, applies to taxable years
beginning after December 31, 1990.

        D.     Implementation.         Because the Internal Revenue Service has primary authority for
interpreting IRC tax provisions, it will be responsible for interpreting and applying these amendments.

IV.           Section 11404.       Amendment to Section 120 of the Internal Revenue Code of 1986 and
Section 7102 of the Revenue Reconciliation Act of 1989 (P.L. 100-239).

       A.      Text of Amendment.

               SEC. 11404. GROUP LEGAL SERVICES PLANS:

               (a)     IN GENERAL.--Subsection (e) of section 120 (relating to amounts received under
qualified group legal services plans) is amended by striking "September 30, 1990" and inserting "December 31,
1991".

               (b)    CONFORMING AMENDMENT.--Subsection (a) of section 7102 of the Revenue

Reconciliation Act of 1989 is amended by striking paragraph (2).

               (c)   EFFECTIVE DATE.--The amendments made by this section shall apply to taxable years
beginning after December 31, 1989.

       B.      Discussion.     Section 3306(b)(12), FUTA, excludes from the definition of wages "any
contribution, payment, or service, provided by an employer which may be excluded from the gross income of an
employee, his spouse, or his dependents, under the provisions of Section 120, IRC, (relating to amounts
received under qualified group legal services plans)." Prior to amendment, Section 120, which excludes from an
employee's gross income amounts contributed by an employer to a qualified group legal services plan for an
employee or amounts reimbursed to an employee for legal services under such plan, did not apply to taxable
years ending after September 30, 1990.

Section 11404(a) of OBRA 90 amended Section 120, IRC, to extend the exclusion for employer-provided group
legal services through taxable years beginning before January 1, 1992. In addition, Section 11404(b) repealed
Section 7102(a)(2) of OBRA 89 which provided that, for taxable years beginning in 1990, the exclusion is
limited to amounts paid before October 1, 1990, by the employer for coverage for the employee, his spouse, or
his dependents under a qualified group legal services plan" for periods before October 1, 1990.

       C.     Effective Date.       The amendments made by Section 11404, OBRA 90, apply to taxable
years beginning after December 31, 1989.

        D.     Implementation.         Because the Internal Revenue Service has primary authority for
interpreting IRC tax provisions, it will be responsible for interpreting and applying this amendment.

Attachment II
Official attachment: https://oui.doleta.gov/dmstree/uipl/uipl91/uipl_1291a2.pdf

UIPL 12-91 Attachment II

DRAFT LANGUAGE FOR STATE LAWS

I.     Draft Statutory Language.

States will need to amend their unemployment insurance laws if they currently address Reed Act appropriations.
The following language will allow States to use either of the Reed Act appropriation alternatives provided
below and should be effective no earlier than October 1, 1991. (This language is intended to replace Section
10(f) of the Draft Language provided with UIPLs 745 and 987.)

(f)    Money credited under Section 903 of the Social Security Act.--

        (1)     Money credited to the account of this State in the Unemployment Trust Fund by the Secretary of
the Treasury of the United States of America pursuant to Section 903 of the Social Security Act may not be
requisitioned from this State's account or used except for the payment of benefits and for the payment of
expenses incurred for the administration of this Act. Such money may be requisitioned pursuant to Section
[insert section referring to withdrawals from the Unemployment Trust Fund] for the payment of benefits. Such
money may also be requisitioned and used for the payment of expenses incurred for the administration of this
Act but only pursuant to a specific appropriation by the legislature and only if the expenses are incurred and the
money is requisitioned after the enactment of an appropriation law which specifies the purpose(s) for which
such money is appropriated and the amount(s) appropriated therefor. Such appropriation is subject to the
following conditions:

              (A)     The period within which such money may be obligated is limited to a period ending not
more that two years after the date of the enactment of the appropriation law; and

               (B)    the amount which may be obligated is limited to an amount which does not exceed the
amount by which (i) the aggregate of the amounts transferred to the account of this State pursuant to Section
903 of the Social Security Act exceeds, (ii) the aggregate of the amounts used by this State pursuant to this Act
and charged against the amounts transferred to the account of this State.

(2)     For purposes of subsection (B), amounts obligated for administrative purposes pursuant to an
appropriation shall be chargeable against transferred amounts at the exact time the obligation is entered into.
The appropriation, obligation, and expenditure or other disposition of money appropriated under this subsection
shall be accounted for in accordance with standards established by the United States Secretary of Labor.

(3)     Money appropriated as provided herein for the payment of expenses of administration shall be
requisitioned as needed for the payment of obligations incurred under such appropriation and, upon requisition,
shall be deposited in the employment security administration fund from which such payments shall be made.
Money so deposited shall, until expended, remain a part of the unemployment fund and, if it will not be
expended, shall be returned promptly to the account of this State in the Unemployment Trust Fund.


II.    Draft Appropriation Language.

        Two suggested Reed Act appropriation bills are presented. Either bill may be used with the draft
statutory language presented earlier. The first permits States with statutory Reed Act provisions to incorporate
the requirements of Section 903(c)(2) by simply referencing these statutory provisions. This approach may be
better for States where the Reed Act appropriation may be contained in a larger appropriation act or where State
appropriation law limits the content of any single appropriation bill. The second details the requirements of
Section 903(c)(2) and is similar to Reed Act appropriations recommended by this Department in the past.

Alternative 1.

APPROPRIATING MONEY FOR ERECTING A BUILDING FOR USE BY (Name of State employment
security agency)

SEC. 1 There is hereby appropriated out of funds made available to this State under Section 903 of the Social
Security Act, as amended, the sum of $________, or so much thereof as may be necessary, to be used, under the
direction of the [name of State employment security agency or the agency responsible for building construction]
and subject to the requirements of Section [reference section of State code containing Reed Act provisions] of
the State Code, for the purpose of acquiring land at [location] and erecting a building thereon for the use of
[name of State employment security agency] and for such improvements, facilities, paving, landscaping, and
fixed equipment 1/ as may be required for its proper use and for operation by the [name of State employment
security agency].

SEC. 2 Section 1 shall take effect and be in force from and after passage.

Alternative 2.

AN ACT APPROPRIATING MONEY FOR ERECTING A BUILDING FOR USE BY (Name of State
employment security agency)

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF [Name of State]
SEC. 1 There is hereby appropriated out of funds made available to this State under Section 903 of the Social
Security Act, as amended, the sum of $_____, or so much thereof as may be necessary, to be used, under the
direction of the [name of State employment security agency or the agency responsible for building construction],
for the purpose of acquiring land at [location] and erecting a building thereon for the use of [name of State
employment security agency] and for such improvements, facilities, paving, landscaping, and fixed equipment
1/ as may be required for its proper use and for operation by the [name of State employment security agency].

SEC. 2 No part of the money hereby appropriated may be obligated after the expiration of the 2-year period
beginning on the date of enactment 2/ of this act.

SEC. 3 The amount obligated 3/ pursuant to this act shall not exceed at any time the amount by which a) the
aggregate of the amounts transferred to the account of this State pursuant to Section 903 of the Social Security
Act exceeds (b) the aggregate of the amounts obligated for administration and paid out for benefits and required
by law to be charged against the amounts transferred to the account of this State.

SEC. 4 This Act shall take effect and be in force from and after passage.

1/             "Fixed equipment" refers to such things as central heating and/or air conditioning plant which
becomes an integral part of the building and may be included in the cost of the building reimbursable out of
granted funds. Personalty, such as furniture and other furnishings, should be specifically and separately
authorized. Though costs of personalty may, of course, be met from Reed Act money, such costs are not
reimbursable from granted funds.

2/             The Department of Labor recommends that the phrase "date of enactment" be used here, since
Section 903(c)(2)(B) of the Social Security Act requires that use of the appropriated money be limited to a
2-year period beginning with such date.

3/Section 903(c)(2)(D) requires that this limitation be applied to money obligated, even though a State may
choose to apply the 2-year limitation to expenditures.