Interest rate on Title XII unemployment advances during 2007

UIPL13-07_Acc.pdf (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2007/UIPL13-07_Acc.pdf)

                                                          CLASSIFICATION
         EMPLOYMENT AND TRAINING                          UI
      ADMINISTRATION ADVISORY SYSTEM                      CORRESPONDENCE SYMBOL
                                                          OWS
         U.S. DEPARTMENT OF LABOR                         DATE
            Washington, D.C. 20210                        March 8, 2007


ADVISORY: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 13-07

TO:            STATE WORKFORCE AGENCIES

FROM:          EMILY STOVER DeROCCO /s/
               Assistant Secretary

SUBJECT:       Interest Rate on Title XII Advances During Calendar Year (CY) 2007


1. Purpose. To announce the rate of interest the U.S. Treasury Department will charge on Title
   XII advances (loans) during CY 2007.

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

3. Background. The criteria for establishing the rate of interest to be charged on Title XII
   advances during any calendar year are described in Section 1202(b)(4) of the SSA. In brief,
   the interest rate charged for a given calendar year is the earnings yield on the Unemployment
   Trust Fund for the quarter ending December 31 of the previous calendar year.

4. Calendar Year 2007 Interest Rate. The U.S. Treasury Department has established the rate
   of interest for CY 2007 at 4.6433 percent.

5. Action Required. 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) of the SSA, and subject to the
   limitations in Section 303(c)(3) and 1202(b)(5) of the SSA and Section 3304(a)(17) of the
   FUTA.

   In summary, interest is due and payable each September 30 and may not be paid from the
   state unemployment fund or from Federal funds. There are exceptions for Cash Flow Loans
   and for May/September Delays.

   To qualify for a cash flow loan, a state must repay, in full, all advances taken between
   January 1 through September 30 in a given calendar year on or before September 30 of that
   year, and not take any additional loans from October 1 through December 31 of that year.




 RESCISSIONS                                             EXPIRATION DATE
 None                                                    March 8, 2008


   A state may delay the payment of interest accrued on advances taken in May, June, July,
   August, and September of a given year until December 31 of the following calendar year.
   Interest on the delayed amounts still accrues until the interest is paid in full.

   For further information see 20 CFR Part 606.

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