[Code of Federal Regulations]
[Title 20, Volume 3]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR606.41]

[Page 40]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
 CHAPTER V--EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR
 
PART 606--TAX CREDITS UNDER THE FEDERAL UNEMPLOYMENT TAX ACT; ADVANCES UNDER TITLE XII OF THE SOCIAL SECURITY ACT--Table of Contents
 
                 Subpart E--Relief from Interest Payment
 
Sec. 606.41  High unemployment deferral.

    (a) Applicability. Subsection (b)(3)(C) of section 1202 of the 
Social Security Act permits a State to defer payment of, and extend the 
payment for, 75 percent of interest charges otherwise due prior to 
October 1 of a year if the UIS Director determines that high 
unemployment conditions existed in the State.
    (b) High unemployment defined. For purposes of this section, high 
unemployment conditions existed in the State if the State's rate of 
insured unemployment (as determined for purposes of 20 CFR 615.12) under 
the State law with respect to the period consisting of the first six 
months of the preceding calendar year equalled or exceeded 7.5 percent; 
this means that in weeks 1 (that week which includes January 1 of the 
year) through 26 of such preceding calendar year, the rate of insured 
unemployment reported by the State and accepted by the Department under 
20 CFR part 615 must have averaged a percentage equalling or exceeding 
7.5 percent.
    (c) Schedule of deferred payments. The State must pay prior to 
October 1 one-fourth of the interest due, and must pay a minimum of one-
third of the deferred amount prior to October 1 in each of the three 
years following the year in which deferral was granted; at the State's 
option payment of deferred interest may be accelerated.
    (d) Related criteria. Timely payment of one-fourth of the interest 
due prior to October 1 is a precondition to obtaining deferral of 
payment of 75 percent of the interest due. No interest shall accrue on 
such deferred interest.
    (e) Application for deferral and determination. (1) The Governor of 
a State which has decided to request such deferral of interest payment 
shall apply to the Secretary of Labor no later than July 1 of the 
taxable year for which the deferral is requested.
    (2) The UIS Director will determine whether deferral is or is not 
granted on the basis of the Department's records of reports of the rates 
of insured unemployment and information obtained from the Department of 
the Treasury as to the timely and full payment of one-fourth of the 
interest due.