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42 U.S. Code § 1103. Amounts transferred to State accounts
(a) Determination and certification by Secretary of Labor
(1)
If as of the close of any fiscal year after the fiscal year ending June 30, 1972, the amount in the extended unemployment compensation account has reached the limit provided in section 1105(b)(2) of this title and the amount in the Federal unemployment account has reached the limit provided in section 1102(a) of this title and all advances and interest pursuant to section 1105(d) of this title and section 1323 of this title have been repaid, and there remains in the employment security administration account any amount over the amount provided in section 1101(f)(3)(A) of this title, such excess amount, except as provided in subsection (b), shall be transferred (as of the beginning of the succeeding fiscal year) to the accounts of the States in the Unemployment Trust Fund.
(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) Transfer of funds where State is ineligible
(1) If the Secretary of Labor finds that on October 1 of any fiscal year—
(A)
a State is not eligible for certification under section 503 of this title, or
(B)
the law of a State is not approvable under section 3304 of the Federal Unemployment Tax Act [26 U.S.C. 3304],
then the amount available for transfer to such State’s account shall, in lieu of being so transferred, be transferred to the Federal unemployment account as of the beginning of such October 1. If, during the fiscal year beginning on such October 1, the Secretary of Labor finds and certifies to the Secretary of the Treasury that such State is eligible for certification under section 503 of this title, that the law of such State is approvable under such section 3304, or both, the Secretary of the Treasury shall transfer such amount from the Federal unemployment account to the account of such State. If the Secretary of Labor does not so find and certify to the Secretary of the Treasury before the close of such fiscal year then the amount which was available for transfer to such State’s account as of October 1 of such fiscal year shall (as of the close of such fiscal year) become unrestricted as to use as part of the Federal unemployment account.
(2) The amount which, but for this paragraph, would be transferred to the account of a State under subsection (a) or paragraph (1) of this subsection shall be reduced (but not below zero) by the balance of advances made to the State under section 1321 of this title. The sum by which such amount is reduced shall—
(A)
be transferred to or retained in (as the case may be) the Federal unemployment account, and
(B) be credited against, and operate to reduce—
(i)
first, any balance of advances made before September 13, 1960, to the State under section 1321 of this title, and
(ii)
second, any balance of advances made on or after September 13, 1960, to the State under section 1321 of this title.