An Act to extend and improve coverage under the Federal old-age, survivors, and disability insurance system and to remove hardships and inequities, improve the financing of the trust funds, and provide disability benefits to additional individuals under such system; to provide grants to States for medical care for aged individuals of low income; to amend the public assistance and maternal and child welfare provisions of the Social Security Act; to improve the unemployment compensation provisions of such Act; and for other purposes
PL 86-778 (H.R.12580), enacted 09/13/1960

924 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 S T A T . 
Public Law 86-778 
September 13, 1960 
A N A C T 
[H. R. 12580] 
„, 
l o extend and improve coverage under the Federal Old-Age, Survivors, and 
Disability Insurance System and to remove hardships and inequities, improve 
the financing of the trust funds, and provide disability benefits to additional 
individuals under such system; to provide grants to States for medical care 
for aged individuals of low income; to amend the public assistance and 
maternal and child welfare provisions of the Social Security Act; to improve 
the unemployment compensation provisions of such Act; and for other 
purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
soci^ Security JJ^HQ^ 
States of America 
in Congress assembled. That this Act, 
A t n e n d m e n t s o i 
- . . - , . 
. - 
- 
. 
« ' - . 
- 
e \-i 
• 
i i 
i 
1960. 
divided into titles and sections according to the following table or 
contents, may be cited as the "Social Security Amendments of 1960". 
TABLE OF CONTENTS 
TITLE I—COVEBAGE 
Sec. 101. Extension of time for ministers to elect coverage. 
Sec. 102. State and local governmental employees. 
(a) Delegation by Governor of certification functions. 
(b) Employees transferred from one retirement system to another. 
(c) Retroactive coverage. 
(d) Policemen and firemen. 
(e) Limitation on States' liability for employer (and employee) 
contributions in certain cases. 
(f) Statute of limitations for State and local coverage. 
(g) Municipal and county hospitals. 
(h) Validation of coverage for certain Mississippi teachers. 
(i) Justices of the peace and constables in the State of Nebraska. 
(j) Teachers in the State of Maine. 
(k) Certain employees in the State of California. 
(1) Inclusion of Texas among States which are permitted to divide 
their retirement systems into two parts for purposes of obtain-
ing social security coverage under Federal-State agreement. 
Sec. 103. Extension of the program to Guam and American Samoa. 
Sec. 104. Service of parent for son or daughter. 
Sec. 105. Employees of nonprofit organizations. 
Sec. 106. American citizen employees of foreign governments and international 
organizations. 
TITLE II—ELIGIBILITY FOB BENEFITS 
Sec. 201. Children born or adopted after onset of parent's disability. 
Sec. 202. Continued dependency of stepchild on natural father. 
Sec. 203. Payment of burial expenses. 
Sec. 204. Fnllj insured status. 
See. 205. Survivors of individuals who died prior to 1040 and of certain other 
individuals. 
Sec. 206. Crediting of quarters of coverage for years before 1951. 
Sec. 207. Time needed to acquire status of wife, child, or husband in certain cases. 
Sec. 208. Marriages subject to legal impediment. 
Sec. 209. Penalty deductions under foreign work test. 
Sec. 210. Extension of filing period for husband's, widower's, or parent's benefits 
in certain cases. 
Sec. 211. Increase in the earned income limitation. 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
925 
TABLE OP CONTENTS—Continued 
TITLE III—BENEFIT AMOUNTS 
Sec. 301. Increase in insurance benefits of children of deceased workers. 
Sec. 302. Maximum family benefits in certain cases. 
Sec. 303. Computations and recomputations of primary insurance amounts. 
Sec. 304. Elimination of certain obsolete recomputations. 
TITLE IV—^DISABILITY INSURANCE BENEFITS AND THE DISABILITY FBREZE 
Sec. 401. Elimination of requirement of attainment of age fifty for disability 
insurance benefits. 
Sec. 402. Elimination of the waiting period for disability insurance benefits in 
certain cases. 
Sec. 403. Period of trial work by disabled individual. 
Sec. 404. Special insured status test in certain cases for disability purposes. 
TITLE V—EMPLOYMENT SECURITY 
PART 1—SHORT TITLE 
Sec. 501. Short title. 
PART 2—EMPLOYMENT SECURITY ADMINISTRATIVE FINANCING 
AMENDMENTS 
Sec. 521. Amendment of title IX of the Social Security Act. 
Sec. 901. Employment security administration account. 
Sec. 902. Transfers between Federal unemployment account and 
employment security administration account. 
Sec. 903. Amounts transferred to State accounts. 
Sec. 904. Unemployment Trust Fund. 
Sec. 522. Amendment of title XII of the Social Security Act. 
Sec. 1201. Advances to State unemployment funds. 
Sec. 1202. Repayment by States of advances to State unemploy-
ment funds. 
Sec. 1203. Advances to Federal unemployment account. 
Sec. 1204. Definition of Governor. 
Sec. 523. Amendments to the Federal Unemployment Tax Act. 
Sec. 524. Conforming amendments. 
PART 3—^EXTENSION OF COVERAGE UNDER UNEMPLOYMENT COMPENSATION PROGRAM 
Sec. 531. Federal instrumentalities. 
Sec. 532. American aircraft. 
Sec. 533. Feeder organizations, etc. 
Sec. 534. Fraternal beneficiary societies, agricultural organizations, voluntary 
employees' beneficiary associations, etc. 
Sec. 535. Effective date. 
PART 4—EXTENSION 
OF FEDE^tAL-STATE UNEMPLOYMENT 
COMPENSATION 
PROGRAM 
TO PUERTO RICO 
Sec. 541. Extension of titles III, IX, and XII of the Social Security Act. 
Sec. 542. Federal employees and ex-servicemen. 
Sec. 543. Extension of Federal Unemployment Tax Act. 
TITLE VI—MEDICAL SERVICES FOR THE AGED 
Sec. 601. Amendments to title I of the Social Security Act. 
Sec. 602. Increase in limitations on assistance payment to Puerto Rico, the Vir-
gin Islands, and Guam. 
Sec. 603. Technical amendment. 
Sec. 604. Effective dates. 
926 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 S T A T . 
TABLE OF CONTENTS—Continued 
TITLE VII—MISCELLANEOUS 
Sec. 701. Investment of Trust Funds. 
Sec. 702. Survival of actions. 
Sec. 703. Periods of limitation ending on nonwork days. 
Sec. 704. Advisory Council on Social Security Financing. 
Sec. 705. Medical care guides and reports for public assistance and medical 
assistance for the aged. 
Sec. 706. Temporary extension of certain special provisions relating to State 
plans for aid to the blind. 
Sec. 707. Maternal and child welfare. 
Sec. 708. Amendment preserving relationship between railroad retirement and 
old-age, survivors, and disability insurance. 
Sec. 709. Meaning of term "Secretary". 
Sec. 710. Aid to the blind. 
TITLE I—COVERAGE 
EXTENSION OF TIME FOR MINISTERS TO ELECT COVERAGE 
26 use 1402. 
SEC. 101. (a) Clause (B) of section 1402(e)(2) of the Internal 
Revenue Code of 1954 (relating to time for filing waiver certificate) is 
amended by striking out "1956" and inserting in lieu thereof "1959". 
Post. p. 927. 
(b) Section 1402(e) (3) of such Code (relating to effective date of 
certificate) is amended to read as follows: 
"(3) (A) EFFECTIVE DATE or CERTIFICATE.—^A certificate filed 
pursuant to this subsection shall be effective for the taxable year 
immediately preceding the earliest taxable year for whichj at the 
time the certificate is filed, the period for filing a return (includ-
ing any extension thereof) has not expired, and for all succeed-
ing taxable years. An election made pursuant to this subsection 
shall be irrevocable. 
"(B) Notwithstanding the first sentence of subparagraph (A), 
if an individual filed a certificate on or before the date of enact-
ment of this subparagraph which (but for this subparagraph) is 
effective only for the first taxable year ending after 1956 and all 
succeeding taxable years, such certificate shall be effective for his 
first taxable year ending after 1955 and all succeeding taxable 
years if— 
"(i) such individual files a supplemental certificate after 
the date of enactment of this subparagraph and on or before 
April 15,1962, 
2
6 use 1401. 
"(ii) the tax under section 1401 in respect of all such in-
dividual's self-employment income (except for underpay-
ments of tax attributable to errors made in good faith) for 
his first taxable year ending after 1955 is paid on or before 
April 15,1962, and 
''(iii) in any case where refund has been made of any such 
tax which (but for this subparagraph) is an overpayment, 
the amount refunded (including any interest paid under sec-
2
6 use 6611. 
^ion 6611) is repaid on or before April 15,1962. 
2
6 use 6401. 
The provisions of section 6401 shall not apply to any payment 
or repayment described in this subparagraph." 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
927 
(c) Section 1402(e) of such Code is further amended by adding at 
the end thereof the following new paragraph: 
"(5) 
OPTIONAL PROVISION FOR CERTAIN CERTIFICATES FILED ON 
O
R BEFORE APRIL 15, 1962.—In any case where an individual has 
derived earnings, in any taxable year ending after 1954 and be-
fore 1960, from the performance of service described in subsec-
tion (c) (4), or in subsection (c) (5) (as in effect prior to the en-
actment of this paragraph) insofar as it related to the perform-
ance of service by an individual in the exercise of his profession 
as a Christian Science practitioner, and has reported such earn-
ings as self-employment income on a return filed on or before 
the date of the enactment of this paragraph and on or before the 
due date prescribed for filing such return (including any exten-
sion thereof)— 
"(A) a certificate filed by such individual (or a fiduciary 
acting for such individual or his estate, or his survivor within 
the meaning of section 205(c) (1) (C) of the Social Security 
Act) after the date of the enactment of this paragraph and 
on or before April 15, 1962, may be effective, at the election 
of the person filing such certificate, for the first taxable year 
ending after 1954 and before 1960 for which such a return 
was filed, and for all succeeding taxable years, rather than 
for the period prescribed in paragraph (3), and 
"(B) a certificate filed by such individual on or before the 
date of the enactment of this paragraph which (but for this 
subparagraph) is ineffective for the first taxable year ending 
after 1954 and before 1959 for which such a return was filed 
shall be effective for such first taxable year, and for all suc-
ceeding taxable years, provided a supplemental certificate is 
filed by such individual (or a fiduciary acting for such indi-
vidual or his estate, or his survivor within the meaning of 
section 205(c) (1) (C) of the Social Security Act) after the 
date of the enactment of this paragraph and on or before 
April 15,1962, 
but only if— 
"(i) the tax under section 1401 in respect of all such indi-
vidual's self-employment income (except for miderpayments 
of tax attributable to errors made in good faith), for each 
such year ending before 1960 in the case of a certificate 
described in subparagraph (A) or for each such year ending 
before 1959 in the case of a certificate described in subpara-
graph (B), is paid on or before April 15,1962, and 
"(ii) in any case where refund has been made of any such 
tax which (but for this paragraph) is an overpayment, the 
amount refunded (including any interest paid under section 
6611) is repaid on or before April 15,1962. 
The provisions of section 6401 shall not apply to any payment ot 
repayment described in this paragraph." 
(d) In the case of a certificate or supplemental certificate filed 
pursuant to section 1402(e) (3)(B) or (5) of the Internal Revenue 
Code of 1954— 
(1) for purposes of computing interest^ the due date for the 
payment of the tax under section 1401 which is due for any tax-
able year ending before 1959 solely by reason of the filing of a 
certificate which is effective under such section 1402(e) (3) (B) 
or (5) shall be April 15,1962; 
26 use 1402. 
42 u s e 405. 
26 u s e 1401. 
Supra. 
seq. 
928 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
(2) the statutory period for the assessment of any tax for any 
such year which is attributable to the filing of such certificate 
shall not expire before the expiration of 3 years from such due 
date; and 
26 use 6651. 
^3^ fQj. purposes of section 6651 of such Code (relating to 
addition to tax for failure to file tax return), the amount of tax 
required to be shown on the return shall not include such tax 
26 use 1401. 
under section 1401, 
Post. Pi 933. 
(e) rJ^Y^Q provislous of section 205(c) (5) (F) of the Social Security 
Act, insofar as they prohibit inclusion in the records of the Secretary 
of Health, Education, and Welfare of self-employment income for 
a taxable year when the return or statement including such income is 
filed after the time limitation following such taxable year, shall not 
be applicable to earnings which are derived in any taxable year ending 
before 1960 and which constitute self-employment income solely by 
reason of the filing of a certificate which is effective under section 
^^Ante, pp. 926. 1402(e) (3) (B) or (5) of the Internal Eevenue Code of 1954. 
(f) The amendments made by this section shall be applicable 
(except as otherwise specifically indicated therein) only with respect 
to certificates (and supplemental certificates) filed pursuant to sec-
26 use 1402. 
tion 1402(e) of the Internal Revenue Code of 1954 after the date of 
the enactment of this Act; except that no monthly benefits under 
42 use 401 et (-j^ile I I of the Social Security Act for the month in which this Act 
is enacted or any prior month shall be payable or increased by reason 
of such amendments, and no lump-sum death payment under such 
title shall be payable or increased by reason of such amendments in 
the case of any individual who died prior to the date of the enactment 
of this Act. 
STATE AND LOCAL GOVERNMENTAL EMPLOYEES 
Delegation by Governor of Certification Functions 
42 use 418. 
gEc. 102. (a) (1) Section 218(d) (3) of the Social Security Act is 
amended by inserting ", or an official of the State designated by him 
for the purpose," after "the governor of the State". 
(2) Section 218(d) (7) of such Act is amended by inserting "(or 
an official of the State designated by him for the purpose)" after 
"by the governor", and by inserting "('or the official so designated)" 
after "if the governor". 
Employees Transferred From One Retirement System to Another 
(b)(1) Section 218(d)(6)(C) of the Social Security Act is fur-
ther amended by adding at the end thereof the following new sen-
tence : "If, in the case of a separate retirement system which is deemed 
to exist by reason of subparagraph (A) and which has been divided 
into two divisions or parts pursuant to the first sentence of this sub-
paragraph, individuals become members of such system by reason 
of action taken by a political subdivision after coverage under an 
agreement under this section has been extended to the division or 
part thereof composed of positions of individuals who desire such 
coverage, the positions of such individuals who become members of 
such retirement system by reason of the action so taken shall be in-
cluded in the division or part of such system composed of positions 
of members who do not desire such coverage if (i) such individuals, 
on the day before becoming such members, were in the division or 
part of another separate retirement system (deemed to exist by reason 
of subparagraph (A)) composed of positions of members of such 
system who do not desire coverage under an agreement under this 
T4 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
929 
section, and (ii) all of the positions in the separate retirement system 
of which such individuals so become members and all of the positions 
in the separate retirement system referred to in clause (i) would have 
been covered by a single retirement system if the State had not taken 
action to provide for separate retirement systems under 
this 
paragraph." 
(2) The amendment made by paragraph (1) shall apply in the case 
of transfers of positions (as described therein) which occur on or after 
the date of enactment of this Act. 
Such amendment shall also apply 
in the case of such transfers in any State which occurred prior to 
such date, but only upon request of the Governor (or other official 
designated by him for the purpose) filed with the Secretary of Health, 
Education, and Welfare before July 1, 1961; and, in the case of any 
such request, such amendment shall apply only with respect to wages 
paid on and after the date on which such request is filed. 
Retroactive Coverage 
(c) (1) Section 218(f) (1) of the Social Security Act is amended 
'»2 use 4i8. 
by striking out all that follows the first semicolon and inserting in 
lieu thereof the following: "except that such date may not be earlier 
than the last day of the sixth calendar year preceding the year in 
which such agreement or modification, as the case may be, is agreed 
to by the Secretary and the State." 
(2) Section 218(d) (6) (A) of such Act is amended by adding at 
the end thereof the following new sentence: "Where a retirement sys-
tem covering positions of employees of a State and positions of 
employees of one or more political subdivisions of the State, or cover-
ing positions of employees of two or more political subdivisions of the 
State, is not divided into separate retirement systems pursuant to the 
preceding sentence or pursuant to subparagraph (C), then the State 
may, for purposes of subsection (f) only, deem the system to be a sep-
arate retirement system with respect to any one or more of the political 
subdivisions concerned and, where the retirement system covers posi-
tions of employees of the State, a separate retirement system with 
respect to the State or with respect to the State and any one or more 
of the political subdivisions concerned." 
(3) The amendment made by paragraph (1) shall apply in the 
case of any agreement or modification of an agreement under section 
218 of the Social Security Act which is agreed to on or after January 
1, 1960; except that in the case of any such agreement or modifica-
tion agreed to before January 1, 1961, the effective date specified 
therein shall not be earlier than December 31, 1955. The amendment 
made by paragraph (2) shall apply in the case of any such agree-
ment or modification which is agreed to on or after the date of the 
enactment of this Act. 
Policemen and Firemen 
(d) Section 218(p) of the Social Security Act is amended by in-
serting "Hawaii," after "Georgia,"; and b^^ striking out "Washing-
ton, or Territory of Hawaii" and inserting in lieu thereof "Virginia, 
or Washington". 
48232 0-61-59 
030 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 
S T A T . 
42 use 418. 
26 use 3111. 
Ante, p. 929. 
Limitation on States' Liability for Employer (and Employee) 
Contributions in Certain Cases 
(e) (1) Section 218(e) of the Social Security Act is amended by 
inserting "(1)" immediately after "(e)", by redesignating paragraphs 
(1) and (2) as subparagraphs (A) and (B), respectively, and by 
adding at the end thereof the following new paragraph: 
"(2) Where— 
"(A) an individual in any calendar year performs services to 
which an agreement under this section is applicable (i) as the 
employee of two or more political subdivisions of a State or 
(ii) as the employee of a State and one or more political sub-
divisions of such State; and 
"(B) such State provides all of the funds for the payment 
of those amounts referred to in paragraph (1)(A) which are 
equivalent to the taxes imposed by section 3111 of the Internal 
Revenue Code of 1954 with respect to wages paid to such 
individual for such services; and 
"(C) the political subdivision or subdivisions involved do not 
reimburse such State for the payment of such amounts or, in 
the case of services described in subparagraph (A) (ii), for the 
payment of so much of such amounts as is attributable to 
employment by such subdivision or subdivisions; 
then, notwithstanding paragraph (1), the agreement under this sec-
tion with such State may provide (either in the original agreement 
or by a modification thereof) that the amounts referred to in para-
graph (1) (A) may be computed as though the wages paid to such 
individual for the services referred to in clause (A) of this paragraph 
were paid by one political subdivision for services performed in its 
employ; but the provisions of this paragraph shall be applicable only 
where such State complies with such regulations as the Secretary 
may prescribe to carry out the purposes of this paragraph. 
The pre-
ceding sentence shall be applicable with respect to wages paid after 
an effective date specified in such agreement or modification, but in 
no event with respect to wages paid before (i) January 1, 1957, in 
the case of an agreement or modification which is mailed or delivered 
by other means to the Secretary before January 1, 1962, or (ii) the 
first day of the year in which the agreement or modification is mailed 
or delivered by other means to the Secretary, in the case of an agree-
ment or modification which is so mailed or delivered on or after 
January 1,1962." 
(2) Section 218(f) (1) of such Act is amended by striking out "Any 
agreement" and inserting in lieu thereof "Except as provided in sub-
section (e) (2), any agreement". 
Statute of Limitations for State and Local Coverage 
(f) (1) Section 218 of the Social Security Act is amended by add-
ing at the end thereof the following new subsections: 
"Time Limitation on Assessments 
"(q) (1) Where a State is liable for an amount due under an agree-
ment pursuant to this section, such State shall remain so liable until 
the Secretary is satisfied that the amount due has been paid to the 
Secretary of the Treasury. 
"(2) Notwithstanding paragraph (1), a State shall not be liable 
for an amount due under an agreement pursuant to this section, with 
respect to the wages paid to individuals, after the expiration of the 
latest of the following periods— 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
931 
"(A) three years, three months, and fifteen days after the year 
in which such wages were paid, or 
"(B) three years after the date on which such amount became 
due, or 
"(C) three years, three months, and fifteen days after the year 
following the year in which this subsection is enacted, 
unless prior to the expiration of such period the Secretary makes an 
assessment of the amount due. 
"(3) For purposes of this subsection and section 205(c), an assess- 
^^ ^^^ '*'^5. 
ment of an amount due is made when the Secretary mails or otherwise 
delivers to the State a notice stating the amount he has determined to 
be due under an agreement pursuant to this section and the basis for 
such determination. 
"(4) An assessment of an amount due made by the Secretary after 
the expiration of the period specified in paragraph (2) shall never-
theless be deemed to have been made within such period if— 
"(A) before the expiration of such period (or, if it has pre-
viously been extended under this paragraph, of such period as so 
extended), the State and the Secretary agree in writing to an 
extension of such period (or extended period) and, subject to 
such conditions as may be agreed upon, the Secretary makes the 
assessment prior to the expiration of such extension; or 
"(B) within the 365 days immediately preceding the expiration 
of such period (or extended period) the State pays to the Secre-
tary of the Treasury less than the correct amount due under an 
agreement pursuant to this section with respect to wages paid to 
individuals in any calendar quarters as members of a coverage 
group, and the Secretary of Health, Education, and Welfare 
makes the assessment, adjusted to take into account the amount 
paid by the State, no later than the 365th day after the day the 
State made payment to the Secretary of the Treasury; but the 
Secretary of Health, Education, and Welfare shall make such 
assessment only with respect to the wages paid to such individ-
uals in such calendar quarters as membsrs of such coverage 
group; or 
"(C) pursuant to subparagraph (A) or (B) of section 
205(c)(5) he includes in his records an entry with respect to 
wages for an individual, but only if such assessment is limited 
to the amount due with respect to such wages and is made within 
the period such entry could be made in such records under such 
subparagraph. 
"(5) If the Secretary allows a claim for a credit or refund of an 
overpayment by a State under an agreement pursuant to this section, 
with respect to wages paid or alleged to have been paid to an indi-
vidual in a calendar year for services as a member of a coverage 
group, and if as a result of the facts on which such allowance is 
based there is an amount due from the State, with respect to wages 
paid to such individual in such calendar year for services performed 
as a member of a coverage group, for which amount the State is not 
liable by reason of paragraph (2), then notwithstanding paragraph 
(2) the State shall be liable for such amount due if the Secretary 
makes an assessment of such amount due at the time of or prior 
to notification to the State of the allowance of such claim. For 
purposes of this paragraph and paragraph (6), interest as provided 
tor m subsection (j) shall not be included in determining the amount 
due. 
"(6) The Secretary shall accept wage reports filed by a State under 
an agreement pursuant to this section or regulations of the Secretary 
thereunder, after the expiration of the period specified in paragraph 
932 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
(2) or such period as extended pursuant to paragraph (4), with 
respect to wages which are paid to individuals performing services 
us employees in a coverage group included in the agreement and 
for payment in connection with which the State is not liable by 
reason of paragraph (2), only if the State— 
"(A) pays to the Secretary of the Treasury the amount due 
under such agreement with respect to such wages, and 
"(B) agrees in writing with the Secretary of Health, Educa-
tion, and Welfare to an extension of the period specified in para-
graph (2) with respect to wages paid to all individuals perform-
ing services as employees in such coverage group in the calendar 
quarters designated by the State in such wage reports as the pe-
riods in which such wages w^ere paid. If the State so agrees, the 
period specified in paragraph (2), or such period as extended 
pursuant to paragraph (4), shall be extended until such time as 
the Secretary notifies the State that such wage reports have been 
accepted. 
"(7) Notwithstanding the preceding provisions of this subsection, 
where there is an amount due by a State under an agreement pur-
suant to this section and there has been a fraudulent attempt on the 
part of an officer or employee of the State or any political subdivision 
thereof to defeat or evade payment of such amount due, the State 
shall be liable for such amount due without regard to the provisions 
of paragraph (2), and the Secretary may make an assessment of such 
amount due at any time. 
"Time Limitation on Credits and Eef unds 
"(r) (1) No credit or refund of an overpayment by a State under 
an agreement pursuant to this section with respect to wages paid or 
alleged to have been paid to an individual as a member of a coverage 
group in a calendar quarter shall be allowed after the expiration of 
the latest of the following periods— 
"(A) three years, three months, and fifteen days after the 
year in which occurred the calendar quarter in which such wages 
were paid or alleged to have been paid, or 
"(B) three years after the date the payment which included 
such overpayment became due under such agreement with respect 
to the wages paid or alleged to have been paid to such individual 
as a member of such coverage group in such calendar quarter, or 
"(C) tw^o years after such overpayment was made to the Secre-
tary of the Treasury, or 
"(D) three years, three months, and fifteen days after the year 
following the year in which this subsection is enacted, 
unless prior to the expiration of such period a claim for such credit 
or refund is filed with the Secretary of Health, Education, and Wel-
fare by the State. 
"(2) A claim for a credit or refund filed by a State after the ex-
piration of the period specified by paragraph (1) shall nevertheless 
be deemed to have been filed within such period if— 
"(A) before the expiration of such period (or, if it has previ-
ously been extended under this subparagraph, of such period as 
so extended) the State and the Secretary agree in writing to an 
extension of such period (or extended period) and the claim is 
filed with the Secretary by the State prior to the expiration of 
such extension; but any claim for a credit or refund valid be-
cause of this subparagraph shall be allowed only to the extent 
authorized by the conditions provided for in the agreement for 
such extension, or 
74 S T A T . ] 
PUBLIC LAW 8 6 - 7 7 8 - S E P T . 13, 1960 
933 
"(B) the Secretary deletes from his records an entry with re-
spect to wages of an individual pursuant to the provisions of sub-
paragraph (A), (B), or (E) of section 205(c) (5), but only with 
^2 use 405. 
respect to the entry so deleted. 
"Review by Secretary 
"(s) Where the Secretary has made an assessment of an amount 
due by a State under an agreement pursuant to this section, disallowed 
a State's claim for a credit or refund of an overpayment under such 
agreement, or allowed a State a credit or refund of an overpayment 
under such agreement, he shall review such assessment, disallowance, 
or allowance if a written request for such review is filed with him by 
the State within 90 days (or within such further time as he may 
allow) after notification to the State of such assessment, disallow-
ance, or allowance. On the basis of the evidence obtained by or sub-
mitted to the Secretary, he shall render a decision affirming, modify-
ing, or reversing such assessment, disallowance, or allowance. 
In 
notifying the State of his decision, the Secretary shall state the basis 
therefor. 
"Review by Court 
"(t) (1) Notwithstanding any other provision of this title any State, 
irrespective of the amount in controversy, may file, within two years 
after the mailing to such State of the notice of any decision by the 
Secretary pursuant to subsection (s) affecting such State, or within 
such further time as the Secretary may allow, a civil action for a re-
determination of the correctness of the assessment of the amount due, 
the disallowance of the claim for a refund or credit, or the allowance 
of the refund or credit, as the case may be, with respect to which the 
Secretary has rendered such decision. Such action shall be brought 
in the district court of the United States for the judicial district in 
which is located the capital of such State, or, if such action is brought 
by an instrumentality of two or more States, the principal office of 
such instrumentality. The judgment of the court shall be final, except 
that it shall be subject to review in the same manner as judgments of 
such court in other civil actions. Any action filed under this subsec-
tion shall survive notwithstanding any change in the person occupy-
ing the office of Secretary or any vacancy in such office. 
"(2) Notwithstanding the provisions of section 2411 of title 28, 
63 stat. loe. 
United States Code, no interest shall accrue to a State after final judg-
ment with respect to a credit or refund of an overpayment made under 
an agreement pursuant to this section. 
"(3) The first sentence of section 2414 of title 28, United States 
62 stat. 974. 
Code, shall not apply to final judgments rendered by district courts of 
the United States in civil actions filed under this subsection. In such 
cases, the payment of amounts due to States pursuant to such final 
judgments shall be adjusted in accordance with the provisions of this 
section and with regulations promulgated by the Secretary." 
(2) Section 205(c)(5)(F) of such Act is amended to read as 
follows: 
"(F) to conform his records to— 
"(i) tax returns or portions thereof (including informa-
tion returns and other written statements) filed with the 
Commissioner of Internal Revenue under title VIII of the 
Social Security Act, under subchapter E of chapter 1 or 
42 use looi. 
subchapter A of chapter 9 of the Internal Revenue Code of 
53 stat. 175. 
1939, under chapter 2 or 21 of the Internal Revenue Code 1403 "3??! e^'^se^" 
of 1954, or under regulations made under authority of such 
' 
**^ 
title, subchapter, or chapter; 
934 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 ST A T . 
42 u s e 4-18, 
Ante, p. 930. 
Ante, p. 933. 
Ante, p. 932. 
"(ii) wage reports filed by a State pursuant to an agree-
ment under section 218 or regulations of the Secretary 
thereunder; or 
' 
"(iii) assessments of amounts due under an agreement 
pursuant to section 218, if such assessments are made within 
the period specified in subsection (q) of such section, or 
allowances of credits or refunds of overpaj^ments by a State 
under an agreement pursuant to such section; 
except that no amount of self-employment income of an individual 
for any taxable year (if such return or statement w^as filed after 
the expiration of the time limitation following the taxable year) 
shall be included in the Secretary's records pursuant to this 
subparagraph;". 
(3) (A) The amendments made by paragraphs (1) and (2) shall 
become effective on the first day of the second calendar year following 
the year in which this Act is enacted. 
(B) In any case in which the Secretary of Health, Education, and 
Welfare has notified a State prior to the beginning of such second 
calendar year that there is an amount due by such State, that such 
State's claim for a credit or refund of an overpayment is disallowed, 
or that such State has been allowed a credit or refund of an overpay-
ment, under an agreement pursuant to section 218 of the Social Se-
curity Act, then the Secretary shall be deemed to have made an assess-
ment of such amount due as provided in section 218 (q) of such Act 
or notified the State of such allow^ance or disallowance, as the case 
may be, on the first day of such second calendar year. In such a case 
the 90-day limitation in section 218 (s) of such Act shall not be ap-
plicable with respect to the assessment so deemed to have been made 
or the notification of allowance or disallowance so deemed to have been 
given the State. However, the preceding sentences of this subpara-
graph shall not apply if the Secretary makes an assessment of such 
amount due or notifies the State of such allowance or disallowance on 
or after the first day of the second calendar year following the year 
in which this Act is enacted and within the period specified in section 
218 (q) of the Social Security Act or the period specified in section 
218 (r) of such Act, as the case may be. 
Municipal and County Hospitals 
(g) Section 218(d) (6) (B) of the Social Security Act is amended 
by adding at the end thereof the following new sentence: "If a re-
tirement system covers positions of employees of a hospital which is 
an integral part of a political subdivision, then, for purposes of the 
preceding paragraphs there shall, if the State so desires, be deemed 
to be a separate retirement system for the employees of such hospital." 
Validation of Coverage for Certain Mississippi Teachers 
(h) For purposes of the agreement under section 218 of the Social 
Security Act entered into by the State of Mississippi, services of 
teachers in such State performed after February 28, 1951, and prior 
to October 1, 1959, shall be deemed to have been performed by such 
teachers as employees of the State. The term "teacher" as used in the 
preceding sentence means— 
(1) any individual who is licensed to serve in the capacity of 
teacher, librarian, registrar, supervisorj principal, or superin-
tendent and who is principally engaged m the public elementary 
or secondary school system of the State in any one or more of 
such capacities; 
74 STAT. ] 
PUBLIC LAW 86-778~SEPT. 13, 1960 
935 
(2) any employee in the office of the county superintendent 
of education or tne county school supervisor, or in the office of 
the principal of any county or municipal public elementary or 
secondary school in the State; and 
(3) any individual licensed to serve in the capacity of teacher 
who is engaged in any educational capacity in any day or night 
school conducted under the supervision of the State department 
of education as a part of the adult education program provided 
for under the laws of Mississippi or under the laws of the United 
States. 
Justices of the Peace and Constables in the State of Nebraska 
(i) Notwithstanding any provision of section 218 of the Social 
Security Act, the agreement with the State of Nebraska entered into 
^2 use 4is. 
pursuant to such section may, at the option of such State, be modified 
so as to exclude services performed within such State by individuals 
as justices of the peace or constables, if such individuals are compen-
sated for such services on a fee basis. Any modification of such agree-
ment pursuant to this subsection shall be effective with respect to 
services performed after an effective date specified in such modifi-
cation, except that such date shall not be earlier than the date of 
enactment of this Act. 
Teachers in the State of Maine 
(j) Section 316 of the Social Security Amendments of 1958 is 
J^usc^irnote 
amended by striking out "July 1, 1960" and inserting in lieu thereof 
"July 1, 1961". 
Certain Employees in the State of California 
(k) Notwithstanding any provision of section 218 of the Social 
Security Act, the agreement with the State of California heretofore 
entered into pursuant to such section may at the option of such State 
be modified, at any time prior to 1962, pursuant to subsection (c) (4) 
of such section 218, so as to apply to services performed by any indi-
vidual who, on or after January 1, 1957, and on or before December 
31, 1959, was employed by such State (or any political subdivision 
thereof) in any hospital employee's position which, on September 1, 
1954, was covered by a retirement system, but which, prior to 1960, 
was removed from coverage by such retirement system if, prior to 
July 1, 1960, there have been paid in good faith to the Secretary of 
the Treasury, with respect to any of the services performed by such 
individual in any such position, amounts equivalent to the sum of the 
taxes which would have been imposed by sections 3101 and 3111 of 
the Internal Revenue Code of 1954 if such services had constituted ^^f,^^^ 3ioi, 
employment for purposes of chapter 21 of such Code at the time they 
26 use jioi et 
were performed. 
Notwithstanding the provisions of subsection (f) ^^'^• 
of such section 218 such modification shall be effective with respect 
to (1) all services performed by such individual in any such position 
on or after January 1, 1960, and (2) all such services, performed 
before such date, with respect to which amounts equivalent to such 
taxes have, prior to the date of enactment of this subsection, been paid. 
936 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
Inclusion of Texas Among States Which Are Permitted To Divide 
Their Retirement Systems Into Two Parts for Purposes of Obtain-
ing Social Security Coverage Under Federal-State Agreement 
Ante, p. 928. 
(J) Sectiou 218(d) (6) (C) of the Social Security Act is amended 
by inserting "Texas," before "Vermont". 
EXTENSION OF THE PROGRAM TO GUAM AND AMERICAN SAMOA 
^^^ost. pp.937, 
SEC. 103. (a) (1) (A) The next to the last sentence of section 202 (i) 
of the Social Security Act is amended by striking out "Puerto Rico, 
or the Virgin Islands" and inserting in lieu thereof "the Common-
wealth of Puerto Rico, the Virgin Islands, Guam, or American 
Samoa". 
(B) The last sentence of such section 202(i) is amended by striking 
out "any of such States, or the District of Columbia" and inserting 
in lieu thereof "any State". 
(2) Section 101(d) of the Social Security Act Amendments of 
staf ^*°*' ^^^'^^ 19^0 ^^d section 5(e)(2) of the Social Security Act Amendments 
42'usc 402 note, of 1952 are each amended by striking out "Puerto Rico or the Virgin 
Islands" and inserting in lieu thereof "the Commonwealth of Puerto 
Rico, the Virgin Islands, Guam, or American Samoa". 
42 use 403. 
(b) Section 203 (k) of the Social Security Act is amended by 
striking out "Puerto Rico, or the Virgin Islands" and inserting in 
lieu thereof "the Commonwealth of Puerto Rico, the Virgin Islands, 
Guam, or American Samoa", and by striking out "Puerto Rico and 
the Virgin Islands" and inserting in lieu thereof "the Commonwealth 
of Puerto Rico, the Virgin Islands, Guam, and American Samoa". 
42 use 410. 
(c^ Section 210(a) (7) of such Act is amended to read as follows: 
"(7) Service performed in the employ of a State, or any poli-
tical subdivision thereof, or any instrumentality of any one or 
more of the foregoing which is wholly owned thereby, except 
that this paragraph shall not apply in the case of— 
"(A) service included under an agreement under section 
42 u s e 418. 
218, 
"(B) service which, under subsection (k), constitutes cov-
ered transportation service, or 
"(C) service in the employ of the Government of Guam 
or the Government of American Samoa or any political 
subdivision thereof, or of any instrumentality of any one or 
more of the foregoing which is wholly owned thereby, per-
formed by an officer or employee thereof (including a mem-
ber of the legislature of any such Government or political 
subdivision), and, for purposes of this title— 
"(i) any person whose service as such an officer or 
employee is not covered by a retirement system estab-
lished by a law of the United States shall not, with re-
spect to such service, be regarded as an officer or em-
ployee of the United States or any agency or instru-
mentality thereof, and 
"(ii) the remuneration for service described in clause 
(i) (including fees paid to a public official) shall be 
deemed to have been paid b j the Government of Guam 
or the Government of American Samoa or by a political 
subdivision thereof or an instrumentality of any one or 
more of the foregoing which is wholly owned thereby, 
whichever is appropriate;". 
74 STAT.] 
P U B U C LAW 86-778-SEPT. 13, 1960 
937 
(d) Section 210 (a) of such Act is further amended— 
42 use 410. 
(1) by striking out "or" at the end of paragraph (16), 
(2) by striking out the period at the end of paragraph (17) 
and inserting in heu thereof "; or ", and 
(3) by adding at the end thereof the following new paragraph: 
"(18) Service performed in Guam by a resident of the Re-
public of the Philippines while in Guam on a temporary basis 
as a nonimmigrant alien admitted to Guam pursuant to section 
101(a) (15) (H) (ii) of the Immigration and Nationality Act 
(8U.S.C. 1101(a) (15) (H) (ii))." 
66 stat. lee. 
(e) Section 210(h) of such Act is amended to read as follows: 
"State 
"(h) The term 'State' includes the District of Columbia, the Com-
monwealth of Puerto Rico, the Virgin Islands, Guam, and American 
Samoa," 
(f) Section 210 (i) of such Act is amended to read as follows: 
"United States 
"(i) The term 'United States' when used in a geographical sense 
means the States, the District of Columbia, the Commonwealth of 
Puerto Rico, the Virgin Islands, Guam, and American Samoa." 
(g) (1) Section 211(a) of such Act is amended by striking out the 
'*2 use 411, 
period at the end of paragraph (7) and inserting in lieu thereof 
"; and", and by inserting after paragraph (7) the following new para-
graph: 
"(8) The term 'possession.of the United States' as used in sec-
tions 931 (relating to income from sources within possessions of 
26 use 931,932. 
the United States) and 932 (relating to citizens of possessions of 
the United States) of the Internal Revenue Code 011954 shall be 
deemed not to include the Virgin Islands, Guam, or American 
Samoa." 
(2) Clauses (v) and (vi) in the last sentence of section 211(a) of 
such Act are each amended by striking out "paragraphs (1) through 
(6)" and inserting in lieu thereof "paragraphs (1) through (6) and 
paragraph (8)". 
(h) Section 211(b) of such Act is amended by striking out the last 
tw^o sentences and inserting in lieu thereof the following: 
"An individual who is not a citizen of the United States but who is a 
resident of the Commonwealth of Puerto Rico, the Virgin Islands, 
Guam, or American Samoa shall not, for the purposes of this subsec-
tion, be considered to be a nonresident alien individual." 
(i) Section 218(b) (1) of such Act is amended by inserting ", Guam, 
42usc4i8. 4i9. 
or American Samoa" immediately before the period at the end thereof. 
(j) (1) Section 219 of such Act is repealed. 
Repeals. 
(2) (A) Section 210 (j) of such Act is repealed. 
(B) Subsections (k) through (o) of section 210 of such Act are 
redesignated as subsections (j) through (n), respectively. 
(C) Sections 202(i), 215(h) (1), and 217(e) (1), and the last para- 4i^2"/o*;'*°^''*^^" 
graph of section 209, are each amended by striking out "section 210 
(m) (1)" and inserting in lieu thereof "section 210(1)(1)". 
(D) Section 202 (t) (4) (D) of such Act is amended— 
(i) by striking out "section 210(m) (2)", "section 210(m) (3)", 
and "section 210(m) (2) and (3)" and inserting in lieu thereof 
"section 210(1) (2)", "section 210(1) (3)", and "section 210(1) (2) 
and (3)", respectively; and 
938 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
(ii) by striking out "section 210(n)" each place it appears and 
inserting in lieu thereof "section 210 (m)". 
42 use 405,409. 
(E) Section 205(p)(l) of such Act is amended by striking out 
"subsection (m) (1)" and inserting in lieu thereof "subsection (1) (1)". 
(F) Section 209(j) of such Act is amended by striking out "section 
210(k) (3) (C)" and inserting in lieu thereof "section 210(j) (3) (C)". 
(G) Section 218(c)(6)(C) of such Act is amended by striking out 
"section 210 (1)" and inserting in lieu thereof "section 210 (k)". 
42 use 411. 
(3) Section 211 (a) (6) of such Act is amended to read as follows: 
"(6) A resident of the Commonwealth of Puerto Kico shall 
compute his net earnings from self-employment in the same man-
ner as a citizen of the United States but without regard to the 
26 use 933. 
provisions of section 933 of the Internal Revenue Code of 1954;". 
26 use 1402. 
(k)(l) Section 1402(a) of the Internal Revenue Code of 1954 
(relating to definition of net earnings from self-employment) 
is 
amended by striking out the period at the end of paragraph (8) 
and inserting in lieu thereof "; and", and by inserting after para-
graph (8) the following new paragraph: 
"(9) the term 'possession of the United States' as used in 
sections 931 (relating to income from sources within possessions 
26use 931,932. 
of the United States) and 932 (relating to citizens of possessions 
of the United States) shall be deemed not to include the Virgin 
Islands, Guam, or American Samoa." 
(2) Clauses (v) and (vi) in the last sentence of such section 
1402(a) are each amended by striking out "paragraphs (1) through 
(7)" and inserting in lieu thereof "paragraphs (1) through (?) 
and paragraph (9)". 
(1) The last sentence of section 1402(b) of such Code (relating to 
definition of self-employment income) is amended by striking out 
"the Virgin Islands or a resident of Puerto Rico" and inserting in 
lieu thereof "the Commonwealth of Puerto Rico, the Virgin Islands, 
Guam, or American Samoa". 
26 use 1403. 
(m) Section 1403(b)(2) of such Code (relating to cross refer-
ences) is amended by inserting ", Guam, American Samoa," after 
"Virgin Islands". 
26 use 3121. 
(n) Section 3121(b)(7) of such Code (relating to definition of 
employment) is amended to read as follows: 
"(7) service performed in the employ of a State, or any polit-
ical subdivision thereof, or any instrumentality of any one or 
more of the foregoing which is wholly owned thereby, except that 
this paragraph shall not apply in the case of— 
"(A) service which, under subsection (j), constitutes 
covered transportation service, or 
"(B) service in the employ of the Government of Guam 
or the Government of American Samoa or any political sub-
division thereof, or of any instrumentality oi any one or 
more of the foregoing which is wholly owned thereby, per-
formed by an officer or employee thereof (including a mem-
ber of the legislature of any such Government or political 
subdivision), and, for purposes of this title with respect 
to the taxes imposed by this chapter— 
"(i) any person whose service as such an officer or 
employee is not covered by a retirement system estab-
lished by a law of the United States shall not, with 
respect to such service, be regarded as an employee of 
the United States or any agency or instrumentality 
thereof, and 
"(ii) the remuneration for service described in clause 
(i) (including fees paid to a public official) shall be 
deemed to have been paid by the Government of Guam 
26 u s e 3121. 
66 Stat. 166. 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
939 
or the Government of American Samoa or by a political 
subdivision thereof or an instrumentality of any one 
or more of the foregoing which is wholly owned thereby, 
whichever is appropriate;", 
(o) Section 3121 (b) of such Code is further amended— 
(1) by striking out "or" at the end of paragraph (16), 
(2) by striking out the period at the end of paragraph (17) 
and inserting in lieu thereof "; or", and 
(3) by 
adding 
at the end 
thereof 
the following 
new 
paragraph: 
" (18) service performed in Guam by a resident of the Eepublic 
of the Philippines while in Guam on a temporary basis as a non-
immigrant alien admitted to Guam pursuant to section 101(a) 
(15) (H) (ii) of the Immigration and Nationality Act (8 U.S.C. 
1101(a)(15)(H)(ii))." 
(p) Section 3121 (^e) of such Code (relating to definition of State, 
United States, and citizen) is amended to read as follows: 
"(e) STATE, UNITED STATES, AND CITIZEN.—For purposes of this 
chapter— 
"(1) STATE.—The term 'State' includes the District of Colum-
bia, the Commonwealth of Puerto Kico, the Virgin Islands, Guam, 
and American Samoa. 
" (2) UNITED STATES.—The term 'United States' when used in a 
geographical sense includes the Commonwealth of Puerto Rico, 
the Virgin Islands, Guam, and American Samoa. 
An individual who is a citizen of the Commonwealth of Puerto Rico 
(but not otherwise a citizen of the United States) shall be considered, 
for purposes of this section, as a citizen of the United States." 
(q)(l) Subchapter C of chapter 21 of such Code (general provi- 3125.^^^' ^^^^" 
sions relating to tax under Federal Insurance Contributions Act) is 
amended by redesignating section 3125 as section 3126, and by insert-
ing after section 3124 the following new section: 
"SEC. 3125. RETURNS IN THE CASE OF GOVERNMENTAL EMPLOYEES 
IN GUAM AND AMERICAN SAMOA. 
"(a) GUAM.—The return and payment of the taxes imposed by this 
chapter on the income of individuals who are officers or employees 
of the Government of Guam or any political subdivision thereof or of 
any instrumentality of any one or more of the foregoing which is 
wholly owned thereby, and those imposed on such Government or 
political subdivision or instrumentality with respect to having such 
individuals in its employ, may be made by the Governor of Guam or 
by such agents as he may designate. The person making such return 
may, for convenience of administration, make payments of the tax 
imposed under section 3111 with respect to the service of such indi- 
^6 use 3111. 
viduals without regard to the $4,800 limitation in section 3121(a) (1). 
"(b) AMERICAN SAMOA.—The return and payment of the taxes 
imposed by this chapter on the income of individuals who are officers 
or employees of the Government of American Samoa or any political 
subdivision thereof or of any instrumentality of any one or more of 
the foregoing which is wholly owned thereby, and those imposed on 
such Govermnent or j)olitical subdivision or instrumentality with 
respect to having such individuals in its employ, may be made by the 
Governor of American Samoa or by such agents as he may designate. 
The person making such return may, for convenience of administra-
tion, make payments of the tax imposed under section 3111 with 
respect to the service of such individuals without regard to the $4,800 
limitation in section 3121(a) (1)." 
Ante, p. 939. 
940 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 S T A T . 
(2) The table of sections for such subchapter C is amended by 
striking out 
"Sec. 3125, Short title." 
and inserting in lieu thereof: 
"Sec. 3125. Returns in tlie case of governmental employees in Guam and 
American Samoa. 
"Sec. 3126. Short title." 
26 use 6205. 
( r ) ( l ) Scctiou 6205(a) of such Code (relating to adjustment of 
tax) is amended by adding at the end thereof the following new 
paragraph: 
"(3) GUAM OR AMERICAN SAMOA AS EMPLOYER.—For purposes 
of this subsection, in the case of remuneration received during 
any calendar year from the Government of Guam, the Govern-
ment of American Samoa, a political subdivision of either, or 
any instrumentality of any one or more of the foregoing which 
is wholly owned thereby, the Governor of Guam, the Governor 
of American Samoa, and each agent designated by either who 
makes a return pursuant to section 3125 shall be deemed a separate 
employer." 
26 use 6413. 
(2) Section 6413(a) of such Code (relating to adjustment of tax) 
is amended by adding at the end thereof the following new paragraph: 
"(3) GUAM OR AMERICAN SAMOA AS EMPLOYER.—For purposes 
of this subsection, in the case of remuneration received during any 
calendar year from the Government of Guam, the Government of 
American Samoa, a political subdivision of either, or any instru-
mentality of any one or more of the foregoing which is wholly 
owned thereby, the Governor of Guam, the Governor of American 
Samoa, and each agent designated by either who makes a return 
pursuant to section 3125 shall be deemed a separate employer." 
(3) Section 6413(c) (2) of such Code (relating to applicability of 
special rules to certain employment taxes) is amended by adding at 
the end thereof the following new subparagraphs: 
"(D) GOVERNMENTAL EMPLOYEES IN GUAM.—In the case of 
remuneration received from the Government of Guam or any 
political subdivision thereof or from any instrumentality of any 
one or more of the foregoing which is wholly owned thereby, dur-
ing any calendar year, the Governor of Guam and each agent 
designated by him who makes a return pursuant to section 3125 (a) 
shall, for purposes of this subsection, be deemed a separate 
employer. 
"(E) GOVERNMENTAL EMPLOYEES IN AMERICAN SAMOA.—In the 
case of remuneration received from the Government of American 
Samoa or any political subdivision thereof or from any instru-
mentality of any one or more of the foregoing which is wholly 
owned thereby, during any calendar year, the Governor of Amer-
ican Samoa and each agent designated by him who makes a return 
pursuant to section 3125(b) shall, for purposes of this subsection, 
be deemed a separate employer." 
(4) The heading of such section 6413(c) (2) is amended by striking 
out "AND EMPLOYEES OF CERTAIN FOREIGN CORPORATIONS" and inserting 
in lieu thereof ", EMPLOYEES OF CERTAIN FOREIGN CORPORATIONS, AND 
G O V E R N M E N T A L E M P L O Y E E S I N GUAM AND AMERICAN 
S A M O A " . 
(s) Section 7213 of such Code (relating to unauthorized disclosure 
of information) is amended by redesignating subsection (d) as sub-
section (e) and by inserting after subsection (c) the following new 
subsection: 
"(d) DISCLOSURES BY CERTAIN DELEGATES OF SECRETARY.—All pro-
visions of law relating to the disclosure of information, and all pro-
visions of law relating to penalties for unauthorized disclosure of in-
64 Stat. 392. 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
941 
formation, which are applicable in respect of any function under this 
title when performed by an officer or employee of the Treasury De-
partment are likewise applicable in respect of such function when per-
formed by any person who is a 'delegate* within the meaning of sec-
tion 7701(a) (12) (B)." 
'"''^• 
(t) Section 7701(a) (12) of such Code (relating to definition of 
delegate) is amended to read as follows: 
"(12) 
DELEGATE.— 
"(A) I N GENERAL.—The term 'Secretary or his delegate' 
means the Secretary of the Treasury, or any officer, employee, 
or agency of the Treasury Department duly authorized by 
the Secretary (directly, or indirectly by one or more redele-
gations of authority) to perform the function mentioned or 
described in the context, and the term 'or his delegate' when 
used in connection with any other official of the United States 
shall be similarly construed. 
"(B) 
PERFORMANCE OF CERTAIN FUNCTIONS IN GUAM OR 
AMERICAN SAMOA.—The term 'delegate', in relation to the per-
formance of functions in Guam or American Samoa with re-
spect to the taxes imposed by chapters 2 and 21, also includes 1403,^10! et^ae^q. 
any officer or employee of any other department or agency of 
the United States, or of any possession thereof, duly author-
ized by the Secretary (directly, or indirectly by one or more 
redelegations of authority) to perform such functions." 
(u) Section 30 of the Organic Act of Guam (48 U.S.C, sec. 1421h) 
is amended by inserting before the period at the end thereof the fol-
lowing : "; except that nothing in this Act shall be construed to apply 
to any tax imposed by chapter 2 or 21 of the Internal Revenue Code 
of 1954". 
(v) (1) The amendments made by subsection (a) shall apply only 
with respect to reinterments after the date of the enactment of this 
Act. 
The amendments made by subsections (b), (e), and (f) shall 
apply only with respect to service performed after 1960; except 
that insofar as the carrying on of a trade or business (other than per-
formance of service as an employee) is concerned, such amendments 
shall apply only in the case of taxable yea,rs beginning after 
1960. The amendments made by subsections (d), (i), (o), and (p) 
shall apply only with respect to service performed after 1960. The 
amendments made by subsections (h) and (1) shall apply only in the 
case of taxable years beginning after 1960. The amendments made 
by subsections (c), (n), (q), and (r) shall apply only with respect 
to (1) service in the employ of the Government of Guam or any 
political subdivision thereof, or any instrumentality of any one or 
more of the foregoing wholly owned thereby, which is performed after 
1960 and after the calendar quarter in which the Secretary of the 
Treasury receives a certification by the Governor of Guam that legis-
lation has been enacted by the Government of Guam expressing its 
desire to have the insurance system established by title I I of the 
Social Security Act extended to the officers and employees of such 
Government and such political subdivisions and instrumentalities, 
and (2) service in the employ of the Government of American Samoa 
or any political subdivision thereof or any instrumentality of any one 
or more of the foregoing wholly owned thereby, which is performed 
after 1960 and after the calendar quarter in which the Secretary 
of the Treasury receives a certification by the Governor of American 
Samoa that the Government of American Samoa desires to have the 
insurance system established by such title I I extended to the officers 
and employees of such Government and such political subdivisions 
and instrumentalities. 
The amendments made by subsections (g) 
42 use 401 et 
seq. 
942 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
and (k) shall apply only in the case of taxable years beginnmg after 
1960, except that, insofar as they involve the nonapplication of sec-
26 use 932. 
tion 932 of the Internal Eevenue Code of 1954 to the Virgin Islands 
1403.^^^ '"^^ '" foi" purposes of chapter 2 of such Code and section 211 of the Social 
42 use 411. 
Security Act, such amendments shall be effective in the case of all 
taxable years with respect to which such chapter 2 (and corresponding 
provisions of prior law) and such section 211 are applicable. 
The 
amendments made by subsections (j), (s), and (t) shall take effect 
on the date of the enactment of this Act; and there are authorized to 
be appropriated such sums as may be necessary for the performance 
by any officer or employee of functions delegated to nim by the 
Secretary of the Treasury in accordance with the amendment made 
by such subsection (t). 
(2) The amendments made by subsections (c) and (n) shall have 
application only as expressly provided therein, and determinations 
as to whether an officer or employee of the Government of Guam or 
the Government of American Samoa or any political subdivision 
thereof, or of any instrumentality of any one or more of the foregoing 
which is wholly owned thereby, is an employee of the United States 
. ^ 
or any agency or instrumentality thereof within the meaning of any 
provision of law not affected by such amendments, shall be made with-
out any inferences drawn from such amendments. 
(3) The repeal (by subsection (j) (1)) of section 219 of the Social 
Ante, p. 937. 
Sccurity Act, and the elimination (by subsections (e), (f), (h), 
(j) (2), and (j) (3)) of other provisions of such Act making reference 
to such section 219, shall not be construed as changing or otherwise 
affecting the effective date specified in such section for the extension 
to the Commonwealth of Puerto Rico of the insurance system under 
se^ "®^ 401 et ^j^|g j j ^-f gu(.]^ ^Q^^ Hy^ manner or consequences of such extension, or 
the status of any individual with respect to whom the provisions so 
eliminated are applicable. 
SERVICE OF PARENT FOR SON OR DAUGHTER 
42 use410. 
SEC. 104. (a) Section 210 (a)(3) of the Social Security Act is 
amended to read as follow^s: 
"(3) (A) Service performed by an individual in the employ 
of his spouse, and service performed by a child under the age of 
twenty-one in the employ of his father or mother; 
"(B) Service not in the course of the employer's trade or 
business, or domestic service in a private home of the employer, 
performed by an individual in the employ of his son or daughter;". 
26 use 3121. 
(b) Section 3121(b)(3) of the Internal Revenue Code of 1954 
(relating to definition of employment) is amended to read as follows: 
"(3) (A) service performed by an individual in the employ of 
his spouse, and service performed by a child under the age of 21 
in the employ of his father or mother; 
"(B) service not in the course of the employer's trade or 
business, or domestic service in a private home of the employer, 
performed by an individual in the employ of his son or daughter;". 
(c) The amendments made by subsections (a) and (b) shall apply 
only with respect to services performed after 1960. 
E M P L O Y E E S O F NONPROFIT ORGANIZATIONS 
SEC. 105. (a) (1) The first sentence of section 3121 (k) (1) (A) of the 
Internal Revenue Code of 1954 (relating to waiver of exemption by 
religious, charitable, and certain other organizations) is amended by 
striking out "and that at least two-thirds of its employees concur in the 
filing of the certificate". 
74 S T AT.] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
943 
Ante, p. 942. 
26 use :U2l. 
42 use 405. 
42 u s e 401 e( 
seq. 
(2) The second sentence of such section 3121 (k) (1) (A) is amended 
by inserting " (if any)" after "each employee". 
(3) Section 3121 (k) (1) (E) of such Code is amended by striking 
out the last two sentences and inserting in lieu thereof: "An organiza-
tion which has so divided its employees into two groups may file a 
certificate pursuant to subparagraph (A) with respect to the employees 
in either group, or may file a separate certificate pursuant to such 
subparagraph with respect to the employees in each group." 
(b)(1) I f -
(A) an individual performed service in the employ of an 
organization after 1950 with respect to which remuneration was 
paid before July 1, 1960, and such service is excepted from em-
ployment under section 210 (a) (8) (B) of the Social Security Act, 
^2 use 4 lo. 
(B) such service would have constituted employment as defined 
in section 210 of such Act if the requirements of section 3121 
(k) (1) of the Internal Revenue Code of 1954 (or corresponding 
provisions of prior law) were satisfied, 
(C) such organization paid before August 11, 1960, any 
amount, as taxes imposed by sections 3101 and 3111 of the Internal 
Revenue Code of 1954 (or corresponding provisions of prior law), 3^f. "^^ 3 10 i, 
with respect to such remuneration paid by the organization to the 
individual for such service, 
(D) such individual (or a fiduciary acting for such individual 
or his estate, or his survivor (within the meaning of section 205 
(c)(1)(C) 
of the Social Security Act)) requests that such 
remuneration be deemed to constitute remuneration for employ-
ment for purposes of title I I of the Social Security Act, and 
(E) the request is made in such form and manner, and with 
such official, as may be prescribed by regulations made by the 
Secretary of Health, Education, and Welfare, 
then, subject to the conditions stated in paragraphs (2), (3), and (4), 
the remuneration with respect to which the amount has been paid as 
taxes shall be deemed to constitute remuneration for employment for 
purposes of title I I of the Social Security Act. 
(2) Paragraph (1) shall not apply with respect to an individual 
unless the organization referred to in paragraph (1) (A) — 
(A) on or before the date on which the request described 
in paragraph (1) is made, has filed a certificate pursuant to 
section 3121 (k)(l) of the Internal Revenue Code of 1954 (or 
corresponding provisions of prior law), or 
(B) no longer has any individual in its employ for remunera-
tion at the time such request is made. 
(3) Paragraph (1) shall not apply with respect to an individual 
who was in the employ of the organization referred to in paragraph 
(2) (A) at any time during the 24-month period following the cal-
endar quarter in which the certificate was filed, unless the organiza-
tion paid an amount as taxes under sections 3101 and 3111 of the 
Internal Revenue Code of 1954 (or corresponding provisions of prior 
law) with respect to remuneration paid by the organization to the 
employee during some portion of such 24-month period. 
(4) If credit or refund of any portion of the amount referred to 
in paragraph (1) (C) (other than a credit or refund which would 
be allowed if the service constituted employment for purposes of 
chapter 21 of the Internal Revenue Code of 1954) has been obtained, ^^J^ "^e sioi et 
paragraph (1) shall not apply with respect to the individual unless 
the amount credited or refunded (including any interest under sec-
tion 6611) is repaid before January 1, 1963. 
seq. 
26 use 66 11. 
42 use 410. 
944 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
(5) I f - 
. 
. . . 
(A) any remuneration for service performed by an individual 
is deemed pursuant to paragraph (1) to constitute remuneration 
se'V "^^ 401 et 
f^j. employment for purposes of title I I of the Social Security 
Act, 
(B) such individual performs service, on or after the date 
on which the request is made, in the employ of the organization 
referred to in paragraph (1) (A), and 
(C) the certificate filed by such organization pursuant to sec-
Ante, p. 943. 
tion 3121 (k) (1) of the Internal Kevenue Code of 1954 (or cor-
responding provisions of prior law) is not effective with respect 
to service performed by such individual before the first day of 
the calendar quarter following the quarter in which the request 
is made, 
then, for purposes of clauses (ii) and (iii) of section 210 (a) (8) (B) 
of the Social Security Act and of clauses (ii) and (iii) of section 
26 use 3121. 
3121(b) (8) (B) of the Internal Kevenue Code of 1954, such individual 
shall be deemed to have become an employee of such organization 
(or to have become a member of a group described in section 3121 
( k ) ( l ) ( E ) of such Code) on the first day of the calendar quarter 
following the quarter in which the request is made. 
68 Stat. 1098. 
(g) Sectlou 403(a) of the Social Security Amendments of 1954 
is amended by striking out "filed in such form and manner" and 
inserting in lieu thereof "filed on or before the date of the enactment of 
the Social Security Amendments of 1960 and in such form and 
manner". 
26 use 1402. 
(c) (1) Section 1402 of such Code is further amended by adding at 
the end thereof the following new subsection: 
"(g) 
TREATMENT or 
CERTAIN KEMUNERATION ERRONEOUSLY RE-
PORTED As NET EARNINGS FROM SELF-EMPLOYMENT.—If— 
"(1) an amount is erroneously paid as tax under section 1401, 
for any taxable year ending after 1954 and before 1962, with 
respect to remuneration for service described in section 3121 
(b) (8) (other than service described in section 3121(b) (8) (A)), 
and such remuneration is reported as self-employment income on 
a return filed on or before the due date prescribed for filing such 
return (including any extension thereof), 
"(2) the individual who paid such amount (or a 
fiduciary 
acting for such individual or his estate, or his survivor (within 
42 use 405. 
the meaning of section 205 (c) (1) (C) of the Social Security Act)) 
requests that such remuneration be deemed to constitute net earn-
ings from self-employment, 
" (3) such request is filed after the date of the enactment of this 
paragraph and on or before April 15,1962, 
"(4) such remuneration was paid to such individual for serv-
ices performed in the employ of an organization which, on or 
before the date on which such request is filed, has filed a certificate 
pursuant to section 3121 ^k), and 
"(5) no credit or reiund of any portion of the amount er-
roneously paid for such taxable year as tax under section 1401 
(other than a credit or refund which would be allowable if such 
tax were applicable with respect to such remuneration) has been 
obtained before the date on which such request is filed or, if ob-
tained, the amount credited or refunded (including any interest 
3101 eVIeg.^ ^ ^'' 
Under section 6611) is repaid on or before such date, 
then, for purposes of this chapter and chapter 21, any amount of such 
remuneration which is paid to such individual before the calendar 
quarter in which such request is filed (or before the succeeding quarter 
if such certificate first becomes effective with respect to services per-
formed by such individual in such succeeding quarter), and with re-
74 S T A T . ] 
PUBLIC LAW 8 6 - 7 7 8 - S E P T . 13, 1960 
945 
26 u s e 3iai et 
seq. 
26 u s e 3121. 
Ante, p. 943. 
42 u s e 410. 
spect to whicli no tax (other than an amount erroneously paid as tax) 
has been paid under chapter 21, shall be deemed to constitute net 
earnings from self-employment and not remuneration for employment. 
For purposes of section 3121(b) (8) (B) (ii) and (iii), if the certificate 
filed by such organization pursuant to section 3121 (k) is not effective 
with respect to services performed by such individual on or before the 
first day of the calendar quarter in which the request is filed, such 
individual shall be deemed to have become an employee of such organi-
zation (or to have become a member of a group described in section 
3121 (k) (1) (E)) on the first day of the succeeding quarter." 
(2) Remuneration which is deemed under section 1402(g) of the 
Internal Revenue Code of 1954 to constitute net earnings from self- 
^'^' ^' ^'*'*' 
employment and not remuneration for employment shall also be 
deemed, for purposes of title I I of the Social Security Act, to constitute ^^^ ^^^ 4 o i et 
net earnings from self-employment and not remuneration for employ-
ment. 
If, pursuant to the last sentence of section 1402(g) of the 
Internal Revenue Code of 1954, an individual is deemed to have 
become an employee of an organization (or to have become a member 
of a group) on the first day of a calendar quarter, such individual 
shall likewise be deemed, for purposes of clause (ii) or (iii) of section 
210(a) (8) (B) of the Social Security Act, to have become an employee 
of such organization (or to have become a member of such group) 
on such day. 
(d) (1) The amendments made by subsection (a) shall apply only 
with respect to certificates filed under section 3121 (k)(l) of the 
Internal Revenue Code of 1954 after the date of the enactment of 
this Act. 
(2) No monthly benefits under title II of the Social Security Act 
for the month in which this Act is enacted or any prior month shall 
be payable or increased by reason of the provisions of subsections 
(b) and (c) of this section or the amendments made by such sub-
sections, and no lump-sum death payment under such title shall be 
payable or increased by reason of such provisions or amendments 
in the case of any individual who died prior to the date of the enact-
ment of this Act. 
AMERICAN CITIZEN EMPLOYEES OF FOREIGN GOVERNMENTS AND INTER-
NATIONAL ORGANIZATIONS 
SEC. 106. (a) Section 211(c)(2) of the Social Security Act is 
amended to read as follows: 
"(2) The performance of service by an individual as an em-
ployee, other than— 
"(A) service described in section 210(a) (14) (B) per-
formed by an individual who has attained the age of 
eighteen, 
"(B) service described in section 210(a) (16), 
"(C) service described in section 210(a) (11), (12), or 
(15) performed in the United States by a citizen of the 
United States, and 
"(D) service described in paragraph (4) of this sub-
section;", 
(b) Section 1402 (c) (2) of the Internal Revenue Code of 1954 (relat-
ing to definition of trade or business) is amended to read as follows: 
"(2) the performance of service by an individual as an em-
ployee, other than— 
"(A) service described in section 3121(b) (14) (B) per-
formed by an individual who has attained the age of 18, 
"(B) service described in section 3121 (b) (16), 
48232 O-61-60 
42 use 411. 
26 u s e 1402. 
946 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
26 
use 
3121. 
Ante, p. 
939. 
42 use 403. 
"(C) service described in section 3121(b) (11), (12), or 
(15) performed in the United States (as defined in section 
3121 (e) (2)) by a citizen of the United States, and 
"(D) service described in paragraph (4) of this subsec-
tion;", 
(c) The amendments made by this section shall apply only with 
respect to taxable years ending on or after December 31, 1960; except 
that for purposes of section 203 of the Social Security Act, the amend-
ment made by subsection (a) shall apply only with respect to taxable 
years (of the individual performing the service involved) beginning 
after the date of the enactment of this Act. 
TITLE II—ELIGIBILITY F O E BENEFITS 
CHILDREN BORN OR ADOPTED AFTER ONSET OF P A R E N T ' S 
DISABILITY 
42 use 402. 
SEC. 201. (a) Section 202(d) (1) (C) of the Social Security Act is 
amended to read as follows: 
"(C) was dependent upon such individual— 
"(i) if such individual is living, at the time such applica-
tion was filed, 
"(ii) if such individual has died, at the time of such death, 
or 
"(iii) if such individual had a period of disability which 
continued until he became entitled to old-age or disability in-
surance benefits, or (if he has died) until the month of his 
death, at the beginning of such period of disability or at the 
time he became entitled to such benefits,". 
(b) Section 202 (d) (1) of such Act is further amended by adding 
at the end thereof the following new sentence: "In the case of an 
individual entitled to disability msurance benefits, the provisions of 
clause (i) of subparagraph (C) of this paragraph shall not apply to 
a child of such individual unless he (A) is the natural child or step-
child of such individual (including such a child who was legally 
adopted by such individual) or (B) was legally adopted bv such in-
dividual before the end of the twenty-four month period beginning 
with the month after the month in which such individual most recent-
ly became entitled to disability insurance benefits, but only if (i) pro-
ceedings for such adoption of the child had been instituted by such 
individual in or before the month in which began the period of dis-
ability of such individual which still exists at the time of such adoption 
or (ii) such adopted child was living with such individual in such 
month." 
(c) The amendments made by this section shall apply as though 
this Act had been enacted on August 28, 1958, and with respect 
to monthlv benefits under section 202 of the Social Security Act for 
months after August 1958 based on applications for such benefits 
filed on or after August 28,1958. 
CONTINUED DEPENDENCY OF STEPCHILD ON NATURAL FATHER 
Post, p. 952. 
SEC. 202. (a) Section 202(d)(3) of the Social Security Act is 
amended by striking out subparagraph (C), and by striking out 
", or" at the end of subparagraph (B) and inserting in lieu thereof a 
period. 
(b) The amendments made by subsection (a) shall apply with re-
spect to monthly benefits under section 202 of the Social Security Act 
for months beginning with the month in which this Act is enacted, 
but only if an application for such benefits is filed in or after such 
month. 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
947 
PAYMENT OF BURIAL EXPENSES 
SEC. 203. (a) The second and third sentences of sections 202(i) of 93^'*^ ""* ^^^' 
the Social Security Act are amended to read as follows: "If there is 
no such person, or if such person dies before receiving payment, then 
such amount shall be paid— 
"(1) if all or part of the burial expenses of such insured in-
dividual which are incurred by or through a funeral home or 
funeral homes remains unpaid, to such funeral home or funeral 
homes to the extent of such unpaid expenses, but only if (A) 
any person who assumed the responsibility for the payment of 
all or any part of such burial expenses files an application, prior 
to the expiration of two years after the date of death of such 
insured individual, requesting that such payment be made to such 
funeral home or funeral homes, or (B) at least 90 days have 
elapsed after the date of death of such insured individual and 
prior to the expiration of such 90 days no person has assumed 
responsibility for the payment of any of such burial expenses; 
(2) if all of the burial expenses of such insured individual 
which were incurred by or through a funeral home or funeral 
homes have been paid (including payments made under clause 
(1)), to any person or persons, equitably entitled thereto, to the 
extent and m the proportions that he or they shall have paid such 
burial expenses; or 
"(3) if any part of the amount payable under this subsection 
remains after payments have been made pursuant to clauses (1) 
and (2), to any person or persons, equitably entitled thereto, to 
the extent and in the proportions that he or they shall have paid 
other expenses in connection with the burial of such insured 
individual, in the following order of priority: (A) expenses of 
opening and closing the grave of such insured individual, (B) 
expenses of providing the burial plot of such insured individual, 
and (C) any remaining expenses in connection with the burial 
of such insured individual. 
No payment (except a payment authorized pursuant to clause (1) (A) 
of the preceding sentence) shall be made to any person under this 
subsection unless application therefor shall have been filed, by or on 
behalf of such person (whether or not legally competent), prior to 
the expiration of two years after the date of death of such insured 
individual, or unless such person was entitled to wife's or husband's 
insurance benefits, on the basis of the wages and self-employment in-
come of such insured individual, for the month preceding the month 
in which such individual died." 
(b) The amendment made by subsection (a) shall apply— 
(1) in the case of the death of an individual occurring on or 
after the date of the enactment of this Act, and 
(2) in the case of the death of an individual occurring prior to 
such date, but only if no application for a lump-sum death pay-
ment under section 202(i) of the Social Security Act is filed on 
the basis of such individual's wages and self-employment income 
prior to the third calendar month beginning after such date. 
948 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
FULLY INSURED 
STATUS 
42 use 414. 
SEC. 204. (a) Section 214(a) of the Social Security Act is amended 
to read as follows: 
"Fully Insured Individual 
*'(a) The term 'fully insured individual' means any individual who 
had not less than— 
"(1) one quarter of coverage (whenever acquired) for each 
three of the quarters elapsing— 
"(A) after (i) December 31, 1950, or (ii) if later, Decem-
ber 31 of the year in which he attained the age of twenty-one, 
and 
"(B) prior to (i) the year in which he died, or (ii) if 
earlier, the year in which he attained retirement age, 
except that in no case shall an individual be a fully insured indi-
vidual unless he has at least six quarters of coverage; or 
"(2) forty quarters of coverage; or 
"(3) in the case of an individual who died prior to 1951, six 
quarters of coverage; 
not counting as an elapsed quarter for purposes of paragraph (1) any 
quarter any part of which was included in a period of disability (as 
ggl'ost, pp. 9 6 8, defined in section 216(i)) unless such quarter was a quarter of cover-
age. When the number of elapsed quarters referred to in paragraph 
(1) is not a multiple of three, such number shall, for purposes of such 
paragraph, be reduced to the next lower multiple of three." 
(b) The primary insurance amount (for purposes of title I I of the 
c 401 et Social Security Act) of any individual who died after 1939 and prior 
42 use 415. 
to 1951 shall be determined as provided in section 215(a) (2) of such 
Act. 
42usc4isnlte 
^^^ Sectiou 109(b) of the Social Security Amendments of 1954 is 
amended by inserting immediately before the period at the end of such 
subsection "and in or prior to the month in which the Social Security 
Amendments of 1960 are enacted". 
(d) (1) The amendments made by subsections (a) and (b) of this 
section shall be applicable (A) in the case of monthly benefits under 
title I I of the Social Security Act for months after the month in 
which this Act is enacted, on the basis of applications filed in or 
after such month, (B) in the case of lump-sum death payments 
under such title with respect to deaths occurring after such month, 
and (C) in the case of an application for a disability determination 
with respect to a period of disability (as defined in section 216(i) of 
the Social Security Act) filed after such month. 
(2) For the purposes of determining (A) entitlement to monthly 
benefits under title I I of the Social Security Act for the month in 
w^hich this Act is enacted and prior months with respect to the wages 
and self-employment income of an individual and (B) an individual's 
closing date prior to 1960 under section 215(b) (3) (B) of the Social 
Poat, p. 961. 
Security Act, the provisions of section 214(a) of the Social Security 
^"P'* 
Act in effect prior to the date of the enactment of this Act and the 
provisions of section 109 of the Social Security Amendments of 1954 
in effect prior to such date shall apply. 
seq. 
42 u s e 
401 et 
seq. 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
949 
SURVIVORS o r INDIVIDUALS W H O DIED PRIOR TO 1 9 4 0 AND OF CERTAIN OTHER 
INDIVIDUALS 
SEC. 205. (a) Subsections (d) (1), (e) (1), (g) (1), and (h) (1) of 
^2it l'. Itt 
section 202 of the Social Security Act are each amended by striking 
^2 use 402. 
out "after 1939". 
(b) That part of section 202(f) (1) of such Act which precedes sub-
paragraph (A) is amended by striking out "after August 1950". 
(c) The primary insurance amount (for purposes of title I I of the 
Social Security Act) of any individual who died prior to 1940, and 
who had not less than six quarters of coverage (as defined in section 
213 of such Act), shall be computed under section 215(a) (2) of such 
^2 use 413. 
Act. 
(d) The preceding provisions of this section and the amendments 
made thereby shall apply only in the case of monthly benefits under 
title II of the Social Security Act for months after the month in 
which this Act is enacted, on the basis of applications filed in or 
after such month. 
CREDITING OF QUARTERS OF COVERAGE FOR YEARS BEFORE 1 9 5 1 
SEC. 206. (a) Section 213(a)(2) of the Social Security Act is 
amended by striking out all that precedes "$3,600 in the case of a 
calendar year after 1950 and before 1955" in clause (ii) of subpara-
graph (B) and inserting in lieu thereof the following: 
"(2) The term 'quarter of coverage' means a quarter in which the 
individual has been paid $50 or more in wages (except wages for 
agricultural labor paid after 1954) or for which he has been credited 
(as determined under section 212) with $100 or more of self- ' "
^
^ use 412. 
employment income, except that— 
"(i) no quarter after the quarter in which such individual 
died shall be a quarter of coverage, and no quarter any part of 
which was included in a period of disability (other than the 
initial quarter and the last quarter of such period) shall be a 
quarter of coverage; 
"(ii) if the wages paid to any individual in any calendar year 
equal $3,000 in the case of a calendar year before 1951, or". 
(b)(1) Except as provided in paragraph (2), the amendment 
made by subsection (a) shall apply only in the case of monthly 
benefits under title I I of the Social Security Act, and the lump-sum 
death payment under section 202 of such Act, based on the wages 
and self-employment income of an individual— 
(A) who becomes entitled to benefits under section 202(a) 
or 223 of such Act on the basis of an application filed in or after 
"
^
^ ^^^ '^^^' 
the month in which this Act is enacted; or 
(B) who is (or would, but for the provisions of section 
215(f)(6) of the Social Security Act, be) entitled to a recom- 
42 use 4is. 
putation 
of his primary 
insurance amount under 
section 
215(f)(2)(A) of such Act on the basis of an application filed 
in or after the month in which this Act is enacted; or 
(C) who dies without becoming entitled to benefits under sec-
tion 202(a) or 223 of the Social Security Act, and (unless he dies 
a currently insured individual but not a fully insured individual 
(as those terms are defined in section 214 of such Act)) without 
leaving any individual entitled (on the basis of his wages and 
self-employment income) to survivor's benefits or a lump-sum 
death payment under section 202 of such Act on the basis of an ap-
plication filed prior to the month in which this Act is enacted; or 
(D) who dies in or after the month in which this Act is enacted 
and whose survivors are (or would, but for the provisions of sec-
950 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
42 u s e 415. 
Post, 
p. 963 
tion 215(f) (6) of the Social Security Act, be) entitled to a re-
computation of his primary insurance amount under section 
215(f)(4)(A) of such Act; or 
(E) who dies prior to the month in which this Act is enacted 
and (i) whose survivors are (or would, but for the provisions of 
section 215(f) (6) of the Social Security Act, be) entitled to a 
recomputation of his primary insurance amount under section 
215(f) (4) (A) of such Act, and (ii) on the basis of whose wages 
and self-employment income no individual was entitled to sur-
42 use 402. 
vivor's benefits or a lump-sum death payment under section 202 
of such Act on the basis of an application filed prior to the month 
in which this Act is enacted (and no individual was entitled to 
such a benefit, without the filing of an application, for any month 
prior to the month in which this Act is enacted); or 
(F) who files an application for a recomputation under sec-
S u l c 4 i r L e . 
tion 102(f) (2) (B) of the Social Security Amendments of 1954 
in or after the month in which this Act is enacted and is (or 
would, but for the fact that such recomputation would not result 
in a higher primary insurance amount, be) entitled to have his 
primary insurance amount recomputed under such subpara-
graph; or 
(G) who dies and whose survivors are (or would, but for the 
fact that such recomputation would not result in a higher primary 
insurance amount for such individual, be) entitled, on the basis of 
an application filed in or after the month in which this Act is en-
acted, to have his primary insurance amount recomputed under 
section 102(f)(2)(B) of the Social Security Amendments of 
1954. 
(2) The amendment made by subsection (a) shall also be applicable 
in the case of applications for disability determination under section 
216(i) of the Social Security Act filed in or after the month in which 
this Act is enacted. 
(3) Notwithstanding any other provision of this subsection, in the 
case of any individual who would not be a fully insured individual 
under section 214(a) of the Social Security Act except for the enact-
ment of this section, no benefits shall be payable on the basis of his 
wages and self-employment income for any month prior to the month 
in which this Act is enacted. 
TIME NEEDED TO ACQUIRE STATUS OF WIFE, CHILD, OR HUSBAND I N CERTAIN 
CASES 
42 use 416. 
SEC. 207. (a) Section 216(b) of the Social Security Act is amended 
by striking out "not less than three years immediately preceding the 
day on which her application is filed" and inserting in lieu thereof 
"not less than one year immediately preceding the day on which her 
application is filed". 
Post. p. 952. 
^^^ rpj^^ £j,g^ sentence of section 216(e) of such Act is amended to 
read as follows: "The term 'child' means (1) the child or legally 
adopted child of an individual, and (2) a stepchild who has been such 
stepchild for not less than one year immediately preceding the day on 
which application for child's insurance benefits is filed or (if the 
insured individual is deceased) the day on which such individual died." 
(c) Section 216(f) of such Act is amended by striking out "not less 
than three years immediately preceding the day on which his applica-
tion is filed" and inserting in lieu thereof "not less than one year 
immediately preceding the day on which bis application is filed". 
Post, 
pp. 9 6 8, 
969. 
Ante, 
p. 948. 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
951 
(d) The amendments made by this section shall apply onlj with 
respect to monthly benefits under section 202 of the Social Security Act 
'^^ use 402. 
for months beginning with the month in which this Act is enacted, on 
the basis of applications filed in or after such month. 
MAERIACES SUBJECT TO LEGAL 
IMPEDIMENT 
42 u s e 416. 
SEC. 208. (a) Section 216(h)(1) of the Social Security Act is 
amended by inserting " ( A ) " after "(1)", and by adding at the end 
thereof the following new subparagraph: 
"(B) In any case where under subparagraph (A) an applicant is 
not (and is not deemed to be) the wife, widow, husband, or widower 
of a fully or currently insured individual, or where under subsection 
(b), (c), (f), or (g) such applicant is not the wife, widow, husband, 
or widower of such individual, but it is established to the satisfaction 
of the Secretary that such applicant in good faith went through a 
marriage ceremony with such individual resulting in a purported mar-
riage between them which, but for a legal impediment not known to 
the applicant at the time of such ceremony, would have been a valid 
marriage, and such applicant and the insured individual were living 
in the same household at the time of the death of such insured indi-
vidual or (if such insured individual is living) at the time such appli-
cant files the application, then, for purposes of subparagraph (A) 
and subsections (b), (c), (f), and (g), such purported marriage shall 
be deemed to be a valid marriage. The provisions of the preceding 
sentence shall not apply (i) if another person is or has been entitled 
to a benefit under subsection (b), (c), (e), (f), or (g) of section 202 
on the basis of the wages and self-employment income of such insured 
individual and such other person is (or is deemed to be) a wife, widow, 
husband, or widower of such insured individual under subparagraph 
(A) at the time such applicant files the application, or (ii) if the Sec- 
^ 
retary determines, on the basis of information brought to his attention, 
that such applicant entered into such purported marriage with such 
insured individual with knowledge that it would not be a valid mar-
riage. The entitlement to a monthly benefit under subsection (b), (c), 
(e), (f), or (g) of section 202, based on the wages and self-employ-
ment income of such insured individual, of a person who would not 
be deemed to be a wife, widow, husband, or widower of such insured 
individual but for this subparagraph, shall end with the month before 
the month (i) in which the Secretary certifies, pursuant to section 205 
'*2 use 405. 
(i), that another person is entitled to a benefit under subsection (b), 
(c), (e), (f), or (g) of section 202 on the basis of the wages and self-
employment income of such insured individual, if such other person 
is (or is deemed to be) the wife, widow, husband, or widower of such 
insured individual under subparagraph (A), or (ii) if the applicant 
is entitled to a monthly benefit under subsection (b) or (c) of section 
202, in which such applicant entered into a marriage, valid without re^ 
gard to this subparagraph, with a person other than such insured indi-
vidual. 
For purposes of this subparagraph, a legal impediment to the 
validity of a purported marriage includes only an impediment (i) 
resulting from the lack of dissolution of a previous marriage or other-
wise arising out of such previous marriage or its dissolution, or (ii) 
resulting from a defect in the procedure followed in connection with 
such purported marriage." 
(b) Section 216(h) (2) of such Act is amended by inserting " ( A ) " 
after "(2)", and by adding at the end thereof the following new 
subparagraph: 
"(B) If an applicant is a son or daughter of a fully or currently 
insured individual but is not (and is not deemed to be) the child 
of such insured individual under subparagraph (A), such applicant 
Ante, p. 951. 
952 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
shall nevertheless be deemed to be the child of such insured indi-
vidual if such insured individual and the mother or father, as 
the case may be, of such applicant went through a marriage ceremony 
resulting in a purported marriage between them which, but for a legal 
impediment described in the last sentence of paragraph (1) (B), 
would have been a valid marriage." 
Ante, p. 950. 
^^.^ Sectiou 216(e) of such Act is amended by adding at the end 
thereof the following new sentence: "For purposes of clause (2), a 
person who is not the stepchild of an individual shall be deemed 
the stepchild of such individual if such individual was not the mother 
or adopting mother or the father or adopting father of such person 
and such individual and the mother or adopting mother, or the father 
or adopting father, as the case may be, of such person went through 
a marriage ceremony resulting in a purported marriage between them 
which, but for a legal impediment described in the last sentence of 
Ante, p. 951. 
subscctiou (h) (1) (B), would have been a valid marriage." 
Ante, p. 946. 
((J) Sectlou 202(d)(3) of such Act (as amended by section 202 
of this Act) is amended by adding after and below subparagraph 
(B) the following new sentence: 
"For purposes of this paragraph, a child deemed to be a child of a 
fully or currently insured individual pursuant to section 216(h)(2) 
(B) shall, if such individual is the child's father, be deemed to be 
the legitimate child of such individual." 
(e) Where— 
(1) one or more persons were entitled (without the applica-
42 use 402. 
tion of section 202(j) (1) of the Social Security Act) to monthly 
benefits under section 202 of such Act for the month before the 
month in which this Act is enacted on the basis of the wages and 
self-employment income of an individual; and 
(2) any person is entitled to benefits under subsection (b), 
(c), (d), (e), (f), or (g) of section 202 of the Social Security 
Act for any subsequent month on the basis of such individual's 
wages and self-employment income and such person would not 
be entitled to such benefits but for the enactment of this section; 
and 
(3) the total of the benefits to which all persons are entitled 
under section 202 of the Social Security Act on the basis of such 
individual's wages and self-employment income for such subse-
quent month is reduced by reason of the application of section 
42 use 403. 
203(a) of such Act, 
then the amount of the benefit to which each person referred to in 
paragraph (1) of this subsection is entitled for such subsequent 
month shall not, after the application of such section 203(a), be less 
than the amount it would have been (determined without regard to 
Post, p. 982. 
section 301) if no person referred to in paragraph (2) of this sub-
section was entitled to a benefit referred to in such paragraph for 
such subsequent month on the basis of such wages and self-employ-
ment income of such individual. 
(f) The amendments made b j the preceding provisions of this sec-
tion shall be applicable (1) with respect to monthljr benefits under 
title I I of the Social Security Act for months beginning with the 
month in which this Act is enacted on the basis of an application 
filed in or after such month, and (2) in the case of a lump-sum death 
payment under such title based on an application filed in or after 
such month, but only if no person, other than the person filing such 
application, has filed an application for a lump-sum death payment 
under such title prior to the date of the enactment of this Act with 
respect to the death of the same individual. 
42 u s e 
401 et 
aeq. 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
953 
PENALTY DEDUCTIONS UNDER FOREIGN WORK TEST 
Infra. 
42 u s e 402. 
SEC. 209. (a) The subsection of section 203 of the Social Security 
Act redesignated as subsection (g) by section 211(c) of this Act is 
amended by striking out "(b) or (c)" wherever it appears and insert-
ing in lieu thereof "(c)"; and by striking out "(other than an event 
specified in subsection (b)(1) or (c)(1))". 
(b) No deduction shall be imposed on or after the date of the enact-
ment of this Act under section 203(f) of the Social Security Act, as 
in effect prior to such date, on account of failure to file a report of an 
event described in section 203(c) of such Act, as in effect prior to 
such date; and no such deduction imposed prior to such date shall be 
collected after such date. 
EXTENSION OF FILING PERIOD FOR H U S B A N D ' S , 
W I D O W E R ' S , OR 
P A R E N T ' S 
BENEFITS I N CERTAIN CASES 
SEC. 210. (a) In the case of any husband who would not be entitled 
to husband's insurance benefits under section 202(c) of the Social 
Security Act except for the enactment of this Act, the requirement in 
section 202(c) (1) (C) of the Social Security Act relating to the time 
within which proof of support must be filed shall not apply if such 
proof of support is filed within two years after the month in which 
this Act is enacted. 
(b) In the case of any widower who would not be entitled to 
widower's insurance benefits under section 202(f) of the Social 
Security Act except for the enactment of this Act, the requirement in 
'*"'^' ^' ^^^• 
section 202(f) (1) (D) of the Social Security Act relating to the time 
within which proof of support must be filed shall not apply if such 
proof of support is filed within two years after the month in which 
this Act is enacted. 
(c) In the case of any parent who would not be entitled to parent's 
insurance benefits under section 202(h) of the Social Security Act 
except for the enactment of this Act, the requirement in section 
202(h) (1) (B) of the Social Security Act relating to the time within 
which proof of support must be filed shall not apply if such proof of 
support is filed within two years after the month in which this Act 
is enacted. 
INCREASE I N T H E EARNED INCOME LIMITATION 
SEC. 211. (a) Subsection (b) of section 203 of the Social Security 
Act is amended to read as follows: 
'*2 use 403. 
"Deductions On Account of Work 
"(b) Deductions, in such amounts and at such time or times as the 
Secretary shall determine, shall be made from any payment or pay-
ments under this title to which an individual is entitled, and from 
any payment or payments to which any other persons are entitled 
on the basis of such individual's wages and self-employment income, 
until the total of such deductions equals— 
"(1) such individual's benefit or benefits under section 202 for 
any month, and 
"(2) if such individual was entitled to old-age insurance bene-
fits under section 202(a) for such month, the benefit or benefits of 
all other persons for such month under section 202 based on 
such individual's wages and self-employment income, 
if for such month he is charged with excess earnings, under the 
E
rovisions of subsection (f) of this section, equal to the total of 
enefits referred to in clauses (1) and (2). 
If the excess earnings 
954 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
so charged are less than such total of benefits, such deductions with 
respect to such month shall be equal only to the amount of such excess 
earnings. If a child who has attained the age of 18 and is entitled 
to child's insurance benefits, or a person who is entitled to mother's 
insurance benefits, is married to an individual entitled to old-age 
insurance benefits under section 202(a), such child or such person, 
as the case may be, shall, for the purposes of this subsection and sub-
section (f), be deemed to be entitled to such benefits on the basis of 
the wages and self-employment income of such individual entitled 
to old-age insurance benefits. 
If a deduction has already been made 
under this subsection with respect to a person's benefit or benefits un-
der section 202 for a month, he shall be deemed entitled to payments 
under such section for such month for purposes of further deductions 
under this subsection, and for purposes of charging of each person's 
excess earnings under subsection (f), only to the extent of the total 
of his benefits remaining after such earlier deductions have been 
made. For purposes of this subsection and subsection (f)— 
"(A) an individual shall be deemed to be entitled to payments 
under section 202 equal to the amount of the benefit or benefits to 
which he is entitled under such section after the application of 
subsection (a) of this section, but without the application of the 
penultimate sentence thereof; and 
"(B) if a deduction is made with respect to an individual's bene-
fit or benefits under section 202 because of the occurrence in any 
month of an event specified in subsection (c) or (d) of this section 
42 use 422. 
or iu section 222 (b), such individual shall not be considered to be 
entitled to any benefits under such section 202 for such month." 
42 use 403. 
(b) Subsection (c) of section 203 of such Act is amended to read as 
follows: 
"Deductions on Account of Noncovered Work Outside the United 
States or Failure to Have Child in Care 
"(c) Deductions, in such amounts and at such time or times as the 
Secretary shall determine, shall be made from any payment or pay-
ments under this title to which an individual is entitled, until the total 
of such deductions equals such individual's benefit or benefits under 
section 202 for any month— 
"(1) in which such individual is under the age of seventy-two 
and on seven or more different calendar days of which he engaged 
in noncovered remunerative activity outside the United States; or 
" (2) in which such individual, if a wife under age sixty-five en-
titled to a wife's insurance benefit, did not have in her care (indi-
vidually or jointly with her husband) a child of her husband en-
titled to a child's insurance benefit and such wife's insurance bene-
fit for such month was not reduced under the provisions of section 
202rq);or 
"(3) in which such individual, if a widow entitled to a mother's 
insurance benefit, did not have in her care a child of her deceased 
husband entitled to a child's insurance benefit; or 
I 
"(4) in which such individual, if a former wife divorced en-
titled to a mother's insurance benefit, did not have in her care a 
child of her deceased former husband who (A) is her son, daugh-
i 
ter, or legally adopted child and (B) is entitled to a child's insur-
ance benefit on the basis of the wages and self-employment in-
come of her deceased former husband. 
For purposes of paragraphs (2), (3), and (4) of this subsection, a 
child shall not be considered to be entitled to a child's insurance benefit 
for any month in which an event specified in section 222(b) occurs 
with respect to such child. 
No deduction shall be made under this 
Post, p. 95 7. 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
955 
subsection from any child's insurance benefit for the month in which 
the child entitled to such benefit attained the age of eighteen or any 
subsequent month," 
(c) Section 203 of such Act is amended by redesignating subsec- 
*^ "®^ '*°^' 
tions (d), (e), (f), (g), and (h) as subsections (e)j (f), (g), (h), 
and (i), respectively, and by inserting after subsection (c) the fol-
lowing new subsection: 
"Deductions From Dependents' Benefits on Account of Noncovered 
Work Outside the United States by Old-Age Insurance Bene-
ficiary 
"(d) (1) Deductions shall be made from any wife's, husband's, or 
child's msurance benefit, based on the wages and self-employment 
income of an individual entitled to old-age insurance benefits, to which 
a wife, husband, or child is entitled, until the total of such deductions 
equals such wife's, husband's, or child's insurance benefit or benefits 
under section 202 for any month in which such individual is under 
^^ use 402. 
the age of seventy-two and on seven or more different calendar 
days of which he engaged in noncovered remunerative activity out-
side the United States. 
"(2) Deductions shall be made from any child's insurance benefit 
to which a child who has attained the age of eighteen is entitled, or 
from any mother's insurance benefit to which a person is entitled, until 
the total of such deductions equals such child's insurance benefit or 
benefits or mother's insurance benefit or benefits under section 202 for 
any month in which such child or person entitled to mother's insur-
ance benefits is married to an individual who is entitled to old-age 
insurance benefits and on seven or more different calendar days of 
which such individual engaged in noncovered remunerative activity 
outside the United States." 
(d) The subsection of section 203 of such Act redesignated as sub-
section (e) by subsection (c) of this section is amended to read as 
follows: 
"Occurrence of More Than One Event 
"(e) If more than one of the events specified in subsections (c) 
and (d) and section 222(b) occurs in any one month which would 
'*^ "^^ *^^-
occasion deductions equal to a benefit for such month, only an amount 
equal to such benefit shall be deducted." 
(e) The subsection of section 203 of such Act redesignated as sub-
section (f) by subsection (c) of this section is amended to read as 
follows: 
"Months to Which Earnings Are Charged 
"to"-
"(f) For purposes of subsection (b)— 
"(1) The amount of an individual's excess earnings (as defined 
in paragraph (3)) shall be charged to months as follows: There 
shall be charged to the first month of such taxable year an amount 
of his excess earnings equal to the sum of the payments to which 
he and all other persons are entitled for such month under sec-
tion 202 on the basis of his wages and self-employment income 
(or the total of his excess earnings if such excess earnings are less 
than such sum), and the balance, if any, of such excess earnings 
shall be charged to each succeeding month in such year to the ex-
tent, in the case of each such month, of the sum of the payments 
to which such individual and all other persons are entitled for 
such month under section 202 on the basis of his wages and self-
employment income, until the total of such excess has been so 
charged. Where an individual is entitled to benefits under section 
956 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 S T A T . 
202(a) and other persons are entitled to benefits under section 
202 (b), (c), or (d) on the basis of the wages and self-employment 
income of such individual, the excess earnings of such individual 
for any taxable year shall be charged in accordance with the pro-
visions of this subsection before the excess earnings of such per-
sons for a taxable year are charged to months in such individual's 
taxable year. Notwithstanding the preceding provisions of this 
paragraph, no part of the excess earnings of an individual shall 
be charged to any month (A) for which such individual w^as not 
entitled to a benefit under this title, (B) in which such individual 
was age seventy-tw^o or over, (C) in which such individual, if a 
child entitled to child's insurance benefits, has attained the age of 
18, or (D) in which such individual did not engage in self-
employment and did not render services for wages (determined as 
provided in paragraph (5) of this subsection) of more than $100. 
"(2) As used in paragraph (1), the term 'first month of such 
taxable year' means the earliest month in such year to which the 
charging of excess earnings described in such paragraph is not 
prohibited by the application of clauses (A), (B), (C), and (D) 
thereof. 
"(3) For purposes of paragraph (1) and subsection (h), an 
individual's excess earnings for a taxable year shall be his earn-
ings for such year in excess of the product of $100 multiplied by 
the number of months in such year, except that of the first $300 
of such excess (or all of such excess if it is less than $300), an 
amount equal to one-half thereof shall not be included. The ex-
cess earnings as derived under the preceding sentence, if not a 
multiple of $1, shall be reduced to the next lower multiple of $1. 
"(4) For purposes of clause (D) of paragraph (1)— 
"(A) An individual will be presumed, with respect to 
any month, to have been engaged in self-employment in 
such month until it is shown to the satisfaction of the Sec-
retary that such individual rendered no substantial services 
in such month with respect to any trade or business the net 
income or loss of which is includible in computing (as pro-
vided in paragraph (5) of this subsection) his net earnings 
or net loss from self-employment for any taxable year. The 
Secretary shall by regulations prescribe the methods and 
criteria for determining whether or not an individual has 
rendered substantial services wdth respect to any trade or 
business. 
"(B) An individual will be presumed, with respect to any 
month, to have rendered services for wages (determined as 
provided in paragraph (5) of this subsection) of more than 
$100 until it is shown to the satisfaction of the Secretary 
that such individual did not render such services in such 
month for more than such amount. 
"(5) (A) An individual's earnings for a taxable year shall be 
(i) the sum of his w^ages for services rendered in such year and 
his net earnings from self-employment for such year, minus (ii) 
any net loss from self-employment for such year. 
"(B) In determining an individual's net earnings from self-
employment and his net loss from self-employment for purposes 
of subparagraph (A) of this paragraph and paragraph (4), the 
provisions of section 211, other than paragraphs (1), (4), and (5) 
of subsection (c), shall be applicable; and any excess of income 
over deductions resulting from such a computation shall be his net 
earnings from self-employment and any excess of deductions over 
income so resulting shall be his net loss from self-employment. 
Ante, 
pp. 937, 
938, 945. 
74 S T A T . ] 
PUBLIC LAW 8 6 - 7 7 8 - S E P T . 13, 1960 
957 
"(C) For purposes of this subsection, an individual's wages 
shall be computed without regard to the limitations as to amounts 
of remuneration specified in subsections (a), (g)(2), (g)(3), 
(h) (2), and (j) of section 209; and in making such computation gg'J""'' ^'^' ^^^' 
services which do not constitute employment as defined in section 
210, performed within the United States by the individual as an 
employee or performed outside the United States in the active 
military or naval service of the United States, shall be deemed 
to be employment as so defined if the remuneration for such serv-
ices is not includible in computing his net earnings or net loss 
from self-employment, 
"(6) For purposes of this subsection, wages (determined as 
provided in paragraph (5) (C)) which, according to reports re-
ceived by the Secretary, are paid to an individual during a tax-
able year shall be presumed to have been paid to him for services 
performed in such year until it is shown to the satisfaction of 
the Secretary that they were paid for services perforaied in an-
other taxable year. If such reports with respect to an individual 
show his w^ages for a calendar year, such individual's taxable 
year shall be presumed to be a calendar year for purposes of 
this subsection until it is shown to the satisfaction of the Secre-
tary that his taxable year is not a calendar year. 
"(7) Where an individual's excess earnings are charged to a 
month and the excess earnings so charged are less than the total 
of the payments (without regard to such charging) to which all 
persons are entitled under section 202 for such month on the 
'*^ "^^ ^°2-
basis of his wages and self-employment income, the difference 
between such total and the excess so charged to such month shall 
be paid (if it is otherwise payable under this title) to such indi-
vidual and other persons in the proportion that the benefit to 
which each of them is entitled (without regard to such charg-
ing, without the application of section 202 (k) (3), and prior to the 
application of section 203(a)) bears to the total of the benefits 
to which all of them are entitled." 
(f) The subsection of section 203 of such Act redesignated as sub- 
"*"'*' P' ^*^-
section (h) by subsection (c) of this section is amended (1) by strik-
ing out "paragraph (4) of subsection (e)" wherever it appears and 
inserting in lieu thereof "paragraph (5) of subsection (f)", (2) by 
striking out in subparagraph (B) of paragraph (1) "paragraph (3) 
of subsection (g)" and inserting in lieu thereof "paragraph (3) of 
this subsection", (3) by striking out "(b)(1)" wherever it appears 
and inserting in lieu thereof "(b)", and (4) by striking out in para-
graph (3) "suspend the payment" and insert in lieu thereof "suspend 
the total or less than the total payment". 
(g) The subsection of section 203 of such Act redesignated as sub-
section (i) by subsection (c) of this section is amended by striking 
out "subsection (b), (f), or (g) of this section" and inserting in lieu 
thereof "subsection (b), (c), (g),or (h) of this section". 
(h) Subsection (1) of section 203 of such Act is amended by strik-
ing out "subsection (f) or (g) (1) (A)" and inserting in lieu thereof 
"subsection (g) or~(h) (1) (A)". 
(i) The last sentence of section 202 (n) (1) of such Act is amended 
by striking out "Section 203 (b) and (c)" and inserting in lieu thereof 
"Section203 (b), (c),and (d)". 
(j) (1) Clause (A) of section 202(q) (5) of such Act is amended by 
striking out "paragraph (1) or (2) of" and by inserting before the 
comma at the end thereof "or paragraph (1) of section 203 (c)". 
(2) Clause (B) of such section 2i02(q) (5) is amended by striking 
out "paragraph (1) or (2) of section 203(b), under section 203(c)" 
42 use 403. 
958 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
and inserting in lieu thereof "section 203 (b), under section 203 (c) (1), 
42 use 402. 
under section 203 (d^ (1)". 
45 use 228c. 
(k) (1) Clause (A) of section 202 (q) (6) of such Act is amended 
by striking out "section 203(b) (1) or (2), under section 203(c)" and 
inserting m lieu thereof "section 203(b), under section 203(c)(1), 
under section 203 (d) (1)". 
(2) Clause (D) of such section 202(q) (6) is amended by striking 
out "paragraph (1) or (2) of" and by inserting immediately before 
the period "or paragraph (1) of section 203(c)". 
(1) Section 202(t) (7) of such Act is amended by striking out "Sub-
sections (b) and (c) of section 203" and inserting in lieu thereof 
"Subsections (b), (c^,and (d) of section 203". 
(m) Section 208(a)(3) of such Act is amended by striking out 
"section 203(e)" and inserting in lieu thereof "section 203(f)". 
(n) Section 215 (g) of such Act is amended by striking out "203 (a)" 
and inserting in lieu thereof "203(a) and deductions under section 
203(b)". 
(o) (1) Section 3(e) of the Kailroad Ketirement Act of 1937 is 
amended by striking out "subsections (f) and (g) (2) of section 203 
of the Social Security Act" and inserting in lieu thereof "subsections 
(g) and (h) (2) of section 203 of the Social Security Act". 
45 use 228e. 
(£) Sectiou 5(i) (1) (ii) of the Railroad Eetirement Act of 1937 
is amended— 
(A) by striking out "section 203 (e)" each place it appears and 
inserting in lieu thereof "section 203(f)"; 
(B) by striking out "section 203(g) (3)" and inserting in lieu 
thereof "section 203 (h) (3)"; and 
(C) by striking out "earnings" each place it appears and in-
serting in lieu thereof "excess earnings". 
Ante. p. 953, 
(p) ggctiou 203 (c), (d), (e), (g), and (i) of the Social Security 
Act as amended by this Act shall be eflFective with respect to monthly 
benefits for months after December 1960. 
(q) Section 203 (b), (f), and (h) of the Social Security Act as 
amended by this Act shall be effective with respect to taxable years 
beginning after December 1960. 
(r) Section 203(1) of the Social Security Act as amended by this 
Act, to the extent that it applies to section 203(g) of the Social Se-
curity Act as amended by this Act, shall be effective with respect to 
monthly benefits for months after December 1960 and, to the extent 
that it applies to section 203(h) (1) (A) of the Social Security Act as 
amended oy this Act, shall be effective with respect to taxable years 
beginning after December 1960. 
Supra. 
(s) The amendments made by subsections (i), (j), (k), (1), (m), 
(nj, and (o) of this section, to the extent that they make changes in 
reierences to provisions of section 203 of the Social Security Act, 
shall take effect in the manner provided in subsections (p) and (q) 
of this section for the provisions of such section 203 to which the 
respective references so changed relate. 
(t) In any case where— 
(1) an individual has earnings (as defined in section 203 (e) (4) 
of the Social Security Act as in effect prior to the enactment of 
this Act) in a taxable year which begins before 1961 and ends in 
1961 (but not on December 31,1961), and 
(2) such individual's spouse or child entitled to monthly bene-
fits on the basis of such individual's self-employment income has 
excess earnings (as defined in section 203(f)(3) of the Social 
Security Act as amended by this Act) in a taxable year which 
begins after 1960, and 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
(3) one or more months in the taxable year specified in para-
graph (2) are included in the taxable year specified in para-
graph (1), 
then, if a deduction is imposed against the benefits payable to such 
individual with respect to a month described in paragraph (3), such 
spouse or child, as the case may be, shall not, for purposes of subsec-
tions (b) and (f) of section 203 of the Social Security Act as amended 
by this Act, be entitled to a payment for such month, 
TITLE III—BENEFIT AMOUNTS 
INCREASE I N INSURANCE BENEFITS OF CHILDREN OF DECEASED WORKERS 
SEC. 301. (a) The second sentence of section 202(d) (2) of the 
42 use 402. 
Social Security Act is amended to read as follows: "Such child's in-
surance benefit for each month shall, if such individual has died in or 
prior to such month, be equal to three-fourths of the primary insur-
ance amount of such individual." 
(b) The amendment made by this section shall apply only with re-
spect to monthly benefits under section 202 of the Social Security Act 
for months after the second month following the month in which this 
Act is enacted. 
(c) Where— 
(1) one or more persons were entitled (without the applica-
tion of section 202(j) (1) of the Social Security Act) to monthly 
benefits under section 202 of such Act for the second month fol-
lowing the month in which this Act is enacted on the basis of the 
wages and self-employment income of a deceased individual (but 
not including any person who became so entitled by reason of sec-
tion 208 of this Act); and 
^"^ "^'' ^®*-
(2) no person, other than (i) those persons referred to in 
paragraph (1) of this subsection (ii) those persons w^io are en-
titled to benefits under section 202 (d), (e), (f), or (g) of the 
Social Security Act but would not be so entitled except for the en- 
Ante, p. 949. 
actment of section 208 of this Act, is entitled to benefits under 
such section 202 on the basis of such individual's wages and self-
employment income for any subsequent month or for any month 
after the second month following the month in which this Act is 
enacted and prior to such subsequent month; and 
(3) the total of the benefits to which all persons referred to 
in paragraph (1) of this subsection are entitled under section 202 
of the Social Security Act on the basis of such individual's wages 
and self-employment income for such subsequent month exceeds 
the maximum of benefits payable, as provided in section 203(a) 
of such Act, on the basis of such wages and self-employment in-
come, 
then the amount of the benefit to which each such person referred to 
in paragraph (1) of this subsection is entitled for such subsequent 
month shall be determined— 
(4) in case such person is entitled to benefits under section 202 
(e), (f), (g), or (h), as though this section and section 208 had 
not been enacted, or 
(5) in case such person is entitled to benefits under section 
202(d), as though (i) no person is entitled to benefits under sec-
tion 202 (e), (f), (g), or (h) for such subsequent month, and 
(ii) the maximum of benefits payable, as described in paragraph 
(3), is such maximum less the amount of each person's benefit for 
such month determined pursuant to paragraph (4). 
Ante, 
p. 953. 
960 
PUBLIC LAW 86-778-SEPT. 13, 1&60 
[74 STAT. 
M A X I M U M FAMILY BENEFITS I N CERTAIN CASES 
42 use 403. 
gEc. 302. (a) Section 203(a)(3) of the Social Security Act is 
amended— 
(1) by striking out "and is not less than $68, then such total 
of benefits shall not be reduced to less than the smaller of" and 
inserting in lieu thereof ", then such total of benefits shall not be 
reduced to less than $99.10 if such primary insurance amount is 
$66, to less than $102.40 if such primary insurance amount is $67, 
to less than $106.50 if such primary insurance amount is $68, or, 
if such primary insurance amount is higher than $68, to less than 
the smaller of"; and 
(2) by striking out "the last figure in column V of the table 
appearing in section 215(a)" and inserting in lieu thereof "the 
amount determined under this subsection without regard to this 
paragraph, or $206.60, whichever is larger". 
(b) The amendments made by subsection (a) shall apply only in 
42 use402,423. ^^^ ^^gg ^f mouthly benefits under section 202 or section 223 of the 
Social Security Act for months after the month following the month 
in which this Act is enacted, and then only (1) if the insured individ-
ual on the basis of whose wages and self-employment income such 
monthly benefits are payable became entitled (without the applica-
Post. p. 967. 
i-ion of section 202(j) (1) or section 223(b) of such Act) to benefits 
under section 202(a) or section 223 of such Act after the month 
following the month in which this Act is enacted, or (2) if such 
insured individual died before becoming so entitled and no person 
was entitled (without the application of section 202(j) (1) or section 
223(b) of such Act) on the basis of such wages and self-employment 
income to monthly benefits under title II of the Social Security Act 
for the month follow^ing the month in which this Act is enacted 
or any prior month. 
COMPUTATIONS AND RECOMPUTATIONS OF PRIMARY INSURANCE AMOUNTS 
42 use 415. 
SEC 303. (a) Section 215(b) of the Social Security Act is amended 
to read as follows: 
"(b) (1) For the purposes of column III of the table appearing in 
subsection (a) of this section, an individual's 'average monthly wage' 
shall be the quotient obtained by dividing— 
"(A) the total of his wages paid in and self-employment 
income credited to his 'benefit computation years' (determined 
under paragraph (2)), by 
"(B) the number of months in such years. 
" (2) (A) The number of an individual's 'benefit computation years' 
shall be equal to the number of elapsed years (determined under 
paragraph (3) of this subsection), reduced by five; except that the 
number of an individual's benefit computation years shall in no case 
be less than two. 
"(B) An individual's 'benefit computation years' shall be those 
computation base years, equal in number to the number determined 
under subparagraph (A), for which the total of his wages and 
self-employment income is the largest. 
"(C) For the purposes of subparagraph (B), 'computation base 
years' include only calendar years occurring— 
" (i) after December 31,1950, and 
"(ii) prior to the year in which the individual became entitled 
to old-age insurance benefits or died, whichever first occurred; 
except that the year in which the individual became entitled to old-
age insurance benefits or died, as the case may be, shall be included as 
a computation base year if the Secretary determines, on the basis of 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
961 
evidence available to him at the time of the computation of the pri-
mary insurance amount for such individual, that the inclusion of such 
year would result in a higher primary insurance amount. Any cal-
endar year all of which is included in a period of disability shall not 
be included as a computation base year. 
"(3) For the purposes of paragraph (2), an individual's 'elapsed 
years' shall be the number of calendar years— 
"(A) after (i) December 31, 1950, or (ii) if later, December 
31 of the year in which he attained the age of twenty-one, and 
"(B) prior to (i) the year in which he died, or (ii) if earlier, 
the first year after December 31, 1960, in which he both was 
fully insured and had attained retirement age. 
For the purposes of the preceding sentence, any calendar year any 
part of which was included in a period of disability shall not be 
mcluded in such number of calendar years. 
"(4) The provisions of this subsection shall be applicable only in 
the case of an individual with respect to whom not less than six of the 
quarters elapsing after 1950 are quarters of coverage, and— 
"(A) who becomes entitled to benefits after December 1960 
under section 202 (a) or section 223; or 
"^^ ^^^ '*°^' ""• 
"(B) who dies after December 1960 without being entitled to 
benefits under section 202(a) or section 223; or 
"(C) who files an application for a recomputation under sub-
section (f) (2) (A) after December 1960 and is (or would, but for 
the provisions of subsection (f) (6), be) entitled to have his pri-
mary insurance amount recomputed under subsection (f) (2) (A)j 
or 
"(D) who dies after December 1960 and whose survivors are 
(or would, but for the provisions of subsection (f) (6), be) en-
titled to a recomputation of his primary insurance amount under 
subsection (f) (4). 
"(5) In the case of any individual— 
"(A) to whom the provisions of this subsection are not made 
applicable by paragraph (4), but 
"(B) (i) prior to 1961, met the requirements of this paragraph 
(including subparagraph (E) thereof) as in effect prior to the 
enactment of the Social Security Amendments of 1960, or (ii) 
after 1960, meets the conditions of subparagraph (E) of this 
paragraph as in effect prior to such enactment, 
then the provisions of this subsection as in effect prior to such enact-
ment shall apply to such individual for the purposes of column I I I 
of the table appearing in subsection (a) of this section." 
(b) Section 215(c)(2)(B) of such Act is amended to read as 
'^s use 4is. 
follows: 
"(B) to whom the provisions of neither paragraph (4) nor 
paragraph (5) of subsection (b) are applicable." 
(c) (1) Section 215(d) (1) (A) of such Act is amended to read as 
follows: 
"(A) In the computation of such benefit, such individual's 
average monthly wage shall (in lieu of being determined under 
section 209(f) of this title as in effect prior to the enactment of 
such amendments) be determined as provided in subsection (b) 
of this section (but without regard to paragraphs (4) and (5) 
thereof), except that for the purposes of paragraphs (2) (C) (i) 
and (3)(A)(i) of subsection (b), December 31, 1936, shall be 
used instead of December 31, 1950." 
(2) Section 215(d)(1)(C) of such Act is amended by striking out 
"any part" and inserting in lieu thereof "all"; and by striking out the 
last sentence thereof. 
48232 0-61-61 
962 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
42 use 415. 
(3) Section 215(d) (2) (B) of such Act is amended by striking out 
"paragraph (5)" and inserting in lieu thereof "paragraph (4)". 
(4) Section 215(d) of such Act is further amended by adding at 
the end thereof the following new paragraph: 
"(3) The provisions of this subsection as in effect prior to the en-
actment of the Social Security Amendments of 1960 shall be applica-
ble in the case of an individual who meets the requirements of sub-
section (b) (5) (as in effect after such enactment) but without regard 
to whether such individual has six quarters of coverage aft«r 1950." 
(d) (1) Effective with respect to individuals who become entitled 
42 use 402. 
to benefits under section 202(a) of the Social Security Act after 1960, 
section 215(e) (3) of such Act is amended to read as follows: 
"(3) if an individual has self-employment income in a taxable 
year which begins prior to the calendar year in which he becomes 
entitled to old-age insurance benefits and ends after the last day 
of the month preceding the month in which he becomes so en-
titled, his self-employment income in such taxable year shall not 
be counted in determining his benefit computation years, except 
as provided in subsection (f) (3) (C)." 
(2) Effective with respect to individuals who meet any of the sub-
paragraphs of paragraph (4) of section 215(b) of the Social Security 
Act, as amended by this Act, section 215(e) of the Social Security 
Act is further amended by inserting "and" after the semicolon at the 
end of paragraph (2) and by striking out paragraph (4). 
(e) (1) Effective with respect to applications for recomputation 
under section 215(f) (2) of the Social Security Act filed after 1960, 
section 215(f) (2) of such Act is amended by striking out "1954" the 
first time it appears and inserting in lieu thereof "1960", and by strik-
ing out "no earlier than six months" in subparagraph (A) (iii). 
(2) Section 215(f)(2)(B) of such Act is amended to read as fol-
lows: 
"(B) A recomputation pursuant to subparagraph (A) shall be 
made— 
" (i) only as provided in subsection (a) (1), if the provisions of 
subsection (b), as amended by the Social Security Amendments of 
1960, were applicable to the last previous computation of the in-
dividual's primary insurance amount, or 
"(ii) as provided in subsection (a) (1) and (3), in all other 
cases. 
Such recomputation shall be made as though the individual became 
entitled to old-age insurance benefits in the month in which he filed 
the application for such recomputation, except that if clause (i) of 
this subparagraph is applicable to such recomputation, the computa-
tion base years referred to in subsection (b) (2) shall include only 
calendar years occurring prior to the year in which he filed his appli-
cation for such recomputation." 
(3) Section 215(f) (3) of such Act is amended to read as follows: 
" (3) (A) Upon application by an individual— 
"(i) who became entitled to old-age insurance benefits under 
section 202(a) after December 1960, or 
"(ii) whose primary insurance amount was recomputed as pro-
vided in paragraph (2) (B) (ii) of this subsection on the basis of 
an application filed after December 1960, 
the Secretary shall recompute his primary insurance amount if such 
application is filed after the calendar year in which he became entitled 
to old-age insurance benefits or in which he filed application for the 
recomputation of his primary insurance amount under clause (ii) of 
this sentence, whichever is the later. 
Such recomputation under this 
subparagraph shall be made as provided in subsection (a) (1) and (3) 
74 S T A T . ] 
PUBLIC LAW 8 6 - 7 7 8 - S E P T . 13, 1960 
963 
of this section, except that such individual's computation base years 
referred to in subsection (b) (2) shall include the calendar year re-
ferred to in the preceding sentence. 
Such recomputation under this 
subparagraph shall be effective for and after the first month for which 
his last previous computation of his primary insurance amount was 
effective, but in no event for any month prior to the twenty-fourth 
month before the month in which the application for such recomputa-
tion is filed. 
"(B) In the case of an individual who dies after December 1960 
and— 
" (i) who, at the time of death was not entitled to old-age insur-
ance benefits under section 202 (a), or 
^^ "^^ *°^-
"(ii) who became entitled to such old-age insurance benefits 
after December 1960, or 
"(iii) whose primary insurance amount was recomputed under 
paragraph (2) of this subsection on the basis of an application 
filed after December 1960, or 
"(iv) whose primary insurance amount was recomputed under 
paragraph (4) of this subsection, 
the Secretary shall recompute his primary insurance amount upon the 
filing of an application by a person entitled to monthly benefits or a 
lump-sum death payment on the basis of such individual's wages and 
self-employment income. Such recomputation shall be made as pro-
vided in subsection (a) (1) and (3) of this section, except that such 
individual's computation base years referred to in subsection (b) (2) 
shall include the calendar year in which he died in the case of an 
individual who was not entitled to old-age insurance benefits at the 
time of death or whose primary insurance amount was recomputed un-
der paragraph (4) of this subsection, or in all other cases, the calendar 
year in which he filed his application for the last previous computa-
tion of his primary insurance amount. In the case of monthly oene-
fits, such recomputation shall be effective for and after the month in 
which the person entitled to such monthly benefits became so entitled, 
but in no event for any month prior to the twenty-fourth month before 
the month in which the application for such recomputation is filed. 
"(C) In the case of an mdividual who becomes entitled to old-age 
insurance benefits in a calendar year after 1960, if such individual has 
self-employment income in a taxable year which begins prior to such 
calendar year and ends after the last day of the month preceding the 
month in which he became so entitled, the Secretary shall recompute 
such individual's primary insurance amount after the close of such 
taxable year and shall take into account in determining the individ-
ual's benefit computation years only such self-employment income in 
such taxable year as is credited, pursuant to section 212, to the year 
preceding the year in which he became so entitled. 
Such recomputa-
tion shall be effective for and after the first month in which he became 
entitled to old-age insurance benefits." 
(4) (A) Section 215(f) (4) of such Act is amended by striking out 
"1954" in the first sentence and inserting in lieu thereof "1960", and 
by striking out the second and third sentences and inserting in lieu 
thereof the following: "If the recomputation is permitted by sub-
E
aragraph (A), the recomputation shall be made (if at all) as though 
e had filed application for a recomputation under paragraph (2) 
(A) in the month in which he died. If the recomputation is permitted 
by subparagraph (B), the recomputation shall take into account only 
the wages and selr-employment income which were considered in the 
last previous computation of his primary insurance amount and the 
compensation (described in section 205 (o)) paid to him in the years 
in which such wages were paid or to which such self-employment 
income was credited." 
42 use 412. 
42 use 405. 
Ante, p. 963. 
42 use 423. 
Post, p. 967. 
42 use 415. 
Ante, p. 961. 
964 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
(B) Ejffective in the case of deaths occurring on or after the date 
of the enactment of this Act, the first sentence of such section 215 
(f) (4) is further amended by striking out "(without the application 
of clause (iii^ thereof)". 
(f) Effective with respect to individuals who become entitled to 
benefits under section 223 of the Social Security Act after 1960, sec-
tion 223(a)(2) of such Act (as amended by section 402(b) of this 
Act) is amended to read as follows: 
"(2) Such individual's disability insurance benefit for any month 
shall be equal to his primary insurance amount for such month deter-
mined under section 215 as though he had attained retirement age in— 
" ^ A) the first month of his waiting period, or 
"(B) in any case in which clause (li) of paragraph (1) of this 
subsection is applicable, the first month for which he becomes 
entitled to such disability insurance benefits, 
and as though he had become entitled to old-age insurance benefits in 
the month in which he filed his application for disability insurance 
benefits. 
For the purposes of the preceding sentence, in the case of 
a woman who both was fully insured and had attained retirement age 
in or before the first month referred to in subparagraph (A) or (B) 
of such sentence, as the case may be, the elapsed years referred to in 
section 215(b) (3) shall not include the first year in which she both 
was fully insured and had attained retirement age, or any year 
thereafter." 
(g) (1) In the case of any individual who both was fully insured 
and had attained retirement age prior to 1961 and (A) who becomes 
entitled to old-age insurance oenefits after 1960, or (B) who dies 
after 1960 without being entitled to such benefits, then, notwithstand-
ing the amendments made by the preceding subsections of this section, 
the Secretary shail also compute such individual's primary insurance 
amount on the basis of such individual's average monthly wage deter-
mined under the provisions of section 215 of the Social Security Act 
in effect prior to the enactment of this Act with a closing date deter-
mined under section 215(b)(3)(B) of such Act as then in effect, 
but only if such closing date would have been applicable to such com-
putation had this section not been enacted. 
If the primary insurance 
amount resulting from the use of such an average monthly wage is 
higher than the primary insurance amount resulting from the use of an 
average monthly wage determined pursuant to the provisions of sec-
tion 215 of the Social Security Act, as amended by the Social Security 
Amendments of 1960, such higher primary insurance amount shall be 
the individual's primary insurance amount for purposes of such sec-
tion 215. The terms used in this subsection shall have the meaning 
assigned to them by title I I of the Social Security Act. 
(2) Notwithstanding the amendments made by the preceding sub-
sections of this section, in the case of any individual who was entitled 
(without regard to the provisions of section 223(b) of the Social 
ges"**'' ^^* ^ ^ ^' Security Act) to a disability insurance benefit under such section 223 
for the month before the month in which he became entitled to an 
42 use 402. 
old-age insurance benefit under section 202(a) of such Act, or in which 
he died, and such disability insurance benefit was based upon a pri-
mary insurance amount determined under the provisions of section 
215 of the Social Security Act in effect prior to the enactment of this 
Act, the Secretary shall, in applying the provisions of such section 
215(a) (except paragraph (4) thereof), for purposes of determining 
benefits payable under section 202 of such Act on the basis of such in-
dividual s wages and self-employment income, determine such in-
dividual's average monthly ^^E^ under the provisions of section 215 
of the Social Security Act in effect prior to the enactment of this Act. 
42 use 401 et 
seq. 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
965 
The provisions of this paragraph shall not apply with respect to any 
such individual, entitled to such old-age insurance benefits, (i) who 
applies, after 1960, for a recomputation (to which he is entitled) of 
his primary insurance amount under section 215(f) (2) of such Act, gg'a"'*' ^^* ^^^' 
or (li) who dies after 1960 and meets the conditions for a recomputa-
tion of his primary insurance amount under section 215(f) (4) of such 
Act. 
(h) In any case where application for recomputation under section 
215(f) (3) of the Social Security Act is filed on or after the date of 
^"'^' P- 9". 
the enactment of this Act with respect to an individual for whom 
the last previous computation of the primary insurance amount was 
based on an application filed prior to 1961, or who died before 1961, 
the provisions of section 215 of such Act as in effect prior to the enact-
ment of this Act shall apply except that— 
(1) such recomputation shall be made as provided in section 
215(a) of the Social Security Act (as in effect prior to the en-
actment of this Act) and as though such individual first became 
entitled to old-age insurance benefits in the month in which 
he filed his application for such recomputation or died without 
filing such an application, and his closing date for such purposes 
shall be as specified in such section 215(f) (3); and 
(2) the provisions of section 215(b) (4) of the Social Security 
Act (as in effect prior to the enactment of this Act) shall apply 
^"'^' P- ^^i-
only if they were applicable to the last previous computation of 
such individual's primary insurance amount, or would have been 
applicable to such computation if there had been taken into 
account— 
(A) his wages and self-employment income in the year 
in which he became entitled to old-age insurance benefits or 
filed application for the last previous recomputation of his 
primary insurance amount, where he is living at the time of 
the application for recomputation under this subsection, or 
(B) his wages and seli-employment income in the year 
in which he died without becoming entitled to old-age insur-
ance benefits, or (if he was entitled to such benefits) the 
year in which application was filed for the last previous 
computation of his primary insurance amount or in which 
he died, whichever first occurred, where he has died at the 
time of the application for such recomputation. 
If the primary insurance amount of an individual was recomputed 
under section 215(f) (3) of the Social Security Act as in effect prior 
to the enactment of this Act, and such amount would have been larger 
if the recomputation had been made under such section as modified 
by this subsection, then the Secretary shall recompute such primary 
insurance amount under such section as so modified, but only if an 
application for such recomputation is filed on or after the date of the 
enactment of this Act. 
A recomputation under the preceding sentence 
shall be effective for and after the first month for which the last 
previous recomputation of such individual's primary 
insurance 
amount under such section 215 was effective, but in no event for any 
month prior to the twenty-fourth month before the month in which 
the application for a recomputation is filed under the preceding 
sentence. 
(i)(l) In the case of an application for a recomputation under 
section 215(f) (2) of the Social Security Act filed after 1954 and prior 
to 1961, the provisions of section 215 (f) (2) of such Act in effect prior 
to the enactment of this Act shall apply. 
(2) In the case of an individual who died after 1954 and prior to 
1961 and who was entitled to an old-age insurance benefit under sec-
Post, 
p. 967. 
966 
PUBLIC LAW S6-778-SEPT. 13, 1960 
[74 STAT. 
42 use 402. 
^JQj^ 202(a) at the time of his death, the provisions of section 215(f) 
Ante, p. 963. 
^4^ ^f ^1^^ Social Securitj Act in effect prior to the enactment of this 
Act shall apply. 
(j) In the case of an individual whose average monthly wage is 
computed under the provisions of section 215 (b) of the Social Security 
Ante. p. 960. 
_^QI^ ^g amended by this Act, and— 
(1) who is entitled, by reason of the provisions of section 
202(j)(l) or section 223(b) of the Social Security Act, to a 
monthly benefit for any month prior to January 1961, or 
(2) who is (or would, but for the fact that such recomputation 
would not result in a higher primary insurance amount for such 
individual, be) entitled, oy reason of section 215(f) of the Social 
Security Act, to have his primary insurance amount recomputed 
effective for a month prior to January 1961, 
his average monthly wage as determined under the provisions of such 
section 215(b) shall be his average monthly wage for the purposes of 
determining his primary insurance amount for such prior month. 
(k) Section 102(f) (2) (B) of the Social Security Amendments of 
42usc4'i5,note. ^^^^ ^^ amended bv inserting after "Social Security Act" in the second 
• ' 
* sentence thereof 
as in effect prior to the enactment of the Social 
Security Amendments of 1960"; and by striking out "bond" and 
inserting in lieu thereof "month". 
ELIMINATIGN OF CERTAIN OBSOLETE REC0MPUTATI0N8 
SEC. 304. (a) The first sentence of section 215(f) (5) of the Social 
42 use 415. 
Security Act is amended by striking out "after the close of such tax-
able year by such individual or (if he died without filing such appli-
cation)" and inserting in lieu thereof the following: "by such individ-
ual after the close of such taxable year and prior to January 1961 or 
(if he died without filing such application and such death occurred 
prior to January 1961)". 
42usc4iSnote. 
(b) Sectiou 102(e) (5) of the Social Security Amendments of 1954 
is amended by adding at the end thereof the following new sub-
paragraph : 
"(D) Notwithstanding the provisions of subparagraphs (A), (B), 
and (C), the primary insurance amount of an individual shall not 
be recomputed under such provisions unless such individual files the 
application referred to in subparagraph (A) or (B) prior to January 
1961 or, if he dies without filing such application, his death occurred 
prior to January 1961." 
42use4i5note. 
((,) Sectlou 102(e) (8) of the Social Security Amendments of 1954 
is amended by inserting before the period at the end thereof "but only 
if such individual files the application referred to in subparagraph 
(A) of such section prior to January 1961 or (if he dies without 
filing such application) his death occurred prior to January 1961". 
(d) Section 5(c)(1) of the Social Security Act Amendments of 
42usc4i7note. ^^52 is amended by adding at the end thereof the following new 
sentence: "Notwithstanding the preceding provisions of this para-
graph, the primary insurance amount of an individual shall not be 
recomputed under such provisions unless such individual files the 
application referred to in clause (A) of the first sentence of this para-
graph prior to January 1961 or, if he dies without filing such appli-
cation, his death occurred prior to January 1961." 
42 use 402. 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
967 
TITLE IV—DISABILITY INSUKANCE BENEFITS AND 
T H E DISABILITY FKEEZE 
ELIMINATION OF REQUIREMENT OF ATTAINMENT OF AGE FIFTY FOR 
DISABILITY INSURANCE BENEFITS 
SEC. 401. (a) Section 223(a) (1) (B) of the Social Security Act is 
^^ "^c 423. 
amended by striking out "has attained the age of fifty and". 
(b) The last sentence of section 223(c) (3) of such Act is amended 
by striking out the semicolon and all that follows and inserting in lieu 
thereof a period. 
(c) The amendments made by this section shall apply only with 
respect to monthly benefits under sections 202 and 223 of the Social 
Security Act for months after the month following the month in which 
this Act is enacted which are based on the wages and self-employment 
income of an individual who did not attain the age of fifty in or prior 
to the month following the month in which this Act is enacted, but 
only where applications for such benefits are filed in or after the month 
in which this Act is enacted. 
ELIMINATION OF THE WAITING PERIOD FOR DISABILITY INSURANCE 
BENEFITS IN CERTAIN CASES 
SEC. 402. (a) Section 223(a)(1) of the Social Security Act is 
amended by striking out "shall be entitled to a disability insurance 
benefit for each month, beginning with the first month after his wait-
ing period (as defined in subsection (c)(3)) in which he becomes so 
entitled to such insurance benefits" and inserting in lieu thereof the 
following: "shall be entitled to a disability insurance benefit (i) for 
each month beginning wuth the first month after his waiting period 
(as defined in subsection (c) (3)) in which he becomes so entitled to 
such insurance benefits, or (ii) for each month beginning with the first 
month during all of which he is under a disability and in which he 
becomes so entitled to such insurance benefits, but only if he was en-
titled to disability insurance benefits which terminated, or had a period 
of disability (as defined in section 216(i)) which ceased, within the 
^'^ "^^ '*^^' 
60-month period preceding the first month in which he is under such 
disability,". 
(b) Section 223(a) (2) of such Act is amended to read as follows: 
^"*^' ^' ^^^ 
"(2) Such individual's disability insurance benefit for any month 
shall be equal to his primary insurance amount for such month deter-
mined under section 215 as though he became entitled to old-age 
^^ "^^ ^^^* 
insurance benefits in— 
" (A) the first month of his waiting period, or 
"(B) in any case in which clause (ii) of paragraph (1) of this 
subsection is applicable, the first month for which he becomes so 
entitled to such disability insurance benefits." 
(c) The first sentence of section 223(b) of such Act is amended to 
read as follows: "No application for disability insurance benefits shall 
be accepted as a valid application for purposes of this section (1) if 
it is filed more than nine months before the first month for which the 
applicant becomes entitled to such benefits, or (2) in any case in which 
clause (ii) of paragraph (1) of subsection (a) is applicable, if it is 
filed more than six months before the first month for which the appli-
cant becomes entitled to such benefits; and any application filed 
within such nine months' period or six months' period, as the case may 
be, shall be deemed to have been filed in such first month." 
(d) The second sentence of section 223(b) of such Act is amended 
by striking out "if he files application therefor" and inserting in lieu 
42 use 423. 
968 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
thereof "if he is continuously under a disability after such month and 
until he files application therefor, and he files such application". 
Post. p. 969. 
{e){l) 
The first sentence of section 216(i)(2) of such Act is 
amended to read as follows: "The term 'period of disability' means a 
continuous period (beginning and ending as hereinafter provided in 
this subsection) during which an individual was under a disability (as 
defined in paragraph (1)), but only if such period is of not less than 
six full calendar months' duration or such individual was entitled 
to benefits under section 223 for one or more months in such period." 
(2) (A) The fifth sentence of such section 216 (i) (2) is amended 
by inserting ", or, in any case in which clause (ii) of section 223(a) 
(1) is applicable, more than six months before the first month for 
w^hich such applicant becomes entitled to benefits under section 223," 
after " (as determined under this paragraph)". 
(B) Such section 216(i) (2) is further amended by adding at the 
end thereof the following new sentence: "Any application for a dis-
ability determination which is filed within such three months' period 
or six months' period shall be deemed to have been filed on such 
first day or in such first month, as the case may be." 
(f) The amendments made by subsections (a) and (b) shall apply 
only with respect to benefits under section 223 of the Social Security 
Act for the month in which this Act is enacted and subsequent months. 
The amendment made by subsection (c) shall apply only in the 
case of applications for benefits under such section 223 filed after the 
seventh month before the month in which this Act is enacted. 
The 
amendment made by subsection (d) shall apply only in the case of 
applications for benefits under such section 223 filed in or after the 
month in which this Act is enacted. 
The amendment made by sub-
section (e) shall apply only in the case of individuals who become 
entitled to benefits under such section 223 in or after the month in 
which this Act is enacted. 
42 use 422. 
42 use 402. 
PERIOD OF TRIAL WORK BY DISABLED INDIVIDUAL 
SEC. 403. (a) Section 222 of the Social Security Act is amended 
by striking out subsection (c) and inserting in lieu thereof the 
following: 
"Period of Trial Work 
"(c) (1) The term 'period of trial work', with respect to an indi-
vidual entitled to benefits under section 223 or 202 (d), means a period 
of months beginning and ending as provided in paragraphs (3) and 
"(2) For purposes of sections 216(i) and 223, any services ren-
dered by an individual during a period of trial work shall be deemed 
not to have been rendered by such individual in determining whether 
his disability has ceased in a month during such period. For pur-
poses of this subsection the term 'services' means activity which is 
performed for remuneration or gain or is determined by the Secre-
tary to be of a type normally performed for remuneration or gain. 
"(3) A period of trial work for any individual shall begin with 
the month in which he becomes entitled to disability insurance bene-
fits,- or, in the case of an individual entitled to benefits under section 
202(d) who has attained the age of eighteen, with the month in which 
he becomes entitled to such benefits or the month in which he attains 
the age of eighteen, whichever is later. Notwithstanding the preced-
ing sentence, no period of trial work may begin for any individual 
prior to the beginning of the month following the month in which 
this paragraph is enacted; and no such period may begin for an in-
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
969 
dividual in a period of disability of such individual in which he had 
a previous period of trial work. 
"(4) A period of trial work for any individual shall end with the 
close of whichever of the following months is the earlier: 
"(A) the ninth month, beginning on or after the first day of 
such period, in which the individual renders services (whether 
or not such nine months are consecutive) ; or 
"(B) the month in which his disability (as defined in section 
223(c) (2)) ceases (as determined after application of paragraph 
^^ "^^ '^^^^ 
(2) of this subsection). 
"(5) In the case of an individual who becomes entitled to benefits 
under section 223 for any month as provided in clause (ii) of subsec-
tion (a) (1) of such section, the preceding provisions of this subsec-
tion shall not apply with respect to services in any month beginning 
with the first month for which he is so entitled and ending with the 
first month thereafter for which he is not entitled to benefits under 
section 223," 
(b) Section 223(a) (1) of such Act is amended by striking out "the 
^"'^'"" ^^'^^ 
first month in which any of the following occurs: his disability ceases, 
he dies, or he attains the age of sixty-five" and inserting in lieu 
thereof "whichever of the following months is the earliest: the month 
in which he dies, the month in which he attains the age of sixty-five, 
or the third month following the month in which his disability ceases". 
(c) The fourth sentence of section 216 (i) (2) of such Act is amend-
ed by striking out "the first month in which either the disability 
ceases or the individual attains the age of sixty-five" and inserting in 
lieu thereof "the month preceding whichever of the following months 
is the earlier: the month in which the individual attains age sixty-five 
or the third month following the month in which the disability 
ceases". 
(d)(1) The first sentence of section 202(d)(1) of such Act is 
^'"«'P-^46. 
amended by inserting "or" before "attains the age of eighteen and 
is not under a disability (as defined in section 223(c)) which began 
before he attained sucn age" and by striking out ", or ceases to be 
under a disability (as so defined) on or after the day on which he 
attains age eighteen". 
(2) Such section 202(d) (1) is further amended by inserting after 
the nrst sentence the following new sentence: "Entitlement of any 
child to benefits under this subsection shall also end with the month 
preceding the third month following the month in which he ceases 
to be under a disability (as so defined) after the month in which he 
attains age eighteen." 
(e)(1) The amendment made by subsection (a) shall be effective 
only with respect to months beginning after the month in which this 
Act is enacted. 
(2) The amendments made by subsections (b) and (d) shall apply 
only with respect to benefits under section 223(a) or 202(d) of the 
Social Security Act for months after the month in which this Act 
is enacted in the case of individuals who, without regard to such 
amendments, would have been entitled to such benefits for the month 
in which this Act is enacted or for any succeeding month. 
(3) The amendment made by subsection (c) shall apply only in the 
case of individuals who have a period of disability (as defined in sec-
tion 216(i) of the Social Security Act) beginning on or after the date 
of the enactment of this Act, or beginning before such date and con-
tinuing, without regard to such amendment, beyond the end of the 
month in which this Act is enacted. 
970 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 S T A T . 
SPECIAL INSURED STATUS TEST IN CERTAIN CASES FOR DISABILITY PURPOSES 
SEC. 404. (a) In the case of any individual who does not meet the 
42 use 416. 
requirements of section 216(i) (3) of the Social Security Act with 
respect to any quarter, or who is not insured for disability insurance 
42 use 423. 
benefits as determined under section 223(c)(1) of such Act with 
respect to any month in a quarter, such individual shall be deemed 
to have met such requirements with respect to such quarter or to be 
so insured with respect to such month of such quarter, as the case 
may be, if— 
(1) he had a total of not less than twenty quarters of coverage 
42 use 413, 
^
g
^
g defined in section 213 of such Act) during the period ending 
with the close of such quarter, and 
(2) all of the quarters elapsing after 1950 and up to but exclud-
ing such quarter were quarters of coverage with respect to him 
and there were not fewer than six such quarters of coverage. 
(b) Subsection (a) shall apply only in the case of applications 
for disability insurance benefits under section 223 of the Social Secu-
rity Act, or for disability determinations under section 216 (i) of 
such Act, filed in or after the month in which this Act is enacted, 
and then only with respect to an individual who, but for such subsec-
tion (a), would not meet the requirements for a period of disability 
under section 216 (i) with respect to the quarter in which this Act is 
enacted or any prior quarter and would not meet the requirements 
for benefits under section 223 with respect to the month in which 
this Act is enacted or any prior month. No benefits under title I I 
of the Social Security Act for the month in which this Act is enacted 
or any prior month shall be payable or increased by reason of the 
amendment made by such subsection. 
TITLE V—EMPLOYMENT SECUKITY 
PART 1—SHORT TITLE 
SEC. 501. This title may be cited as the "Employment Security 
eitation of title, j^^t of 1960". 
PART 2 — E M P L O Y M E N T SECURITY ADMINISTRATIVE F I N A N C I N G 
A M E N D M E N T S 
A M E N D M E N T O F T I T L E IX OF THE SOCIAL SECURITY ACT 
SEC. 521. Title I X of the Social Security Act (42 U.S.C, sec. 
68 Stat. 668. 
nQi ^nd followiug) is amended to read as follows: 
"TITLE IX—MISCELLANEOUS PROVISIONS RELATING 
TO EMPLOYMENT SECURITY 
"EMPLOYMENT SECURITY ADMINISTRATION ACCOUNT 
"Establishment of Account 
"SEC. 901. (a) There is hereby established in the Unemployment 
Trust Fund an employment security administration account. 
42 use 401 et 
seq. 
"Appropriations to Account 
; hereby appropriated to the t 
the employment security adn 
out of any moneys in the Treasury not otherwise appropriated, for 
the fiscal year ending June 30, 1961, and for each fiscal year there-
"(b) (1) There is hereby appropriated to the Unemployment Trust 
Fund for credit to the employment security administration account, 
— 
- 
fQJ. 
74 S T A T . ] 
PUBLIC LAW 8 6 - 7 7 8 - S E P T . 13, 1960 
971 
after, an amount equal to 100 per centum of the tax (including inter-
est, penalties, and additions to the tax) received during the fiscal year 
under the Federal Unemployment Tax Act and covered into the 
^°*'' ^' ^^°* 
Treasury. 
"(2) The amount appropriated by paragraph (1) shall be trans-
ferred at least monthly from the general fund of the Treasury to the 
Unemployment Trust Fund and credited to the employment security 
administration account. 
Each such transfer shall be based on esti-
mates made by the Secretary of the Treasury of the amounts received 
in the Treasury. Proper adjustments shall be made in the amounts 
subsequently transferred, to the extent prior estimates (including 
estimates for the fiscal year ending June 30, 1960) were in excess of 
or were less than the amounts required to be transferred. 
"(3) The Secretary of the Treasury is directed to pay from time 
to time from the employment security administration account into the 
Treasury, as repayments to the account for refunding internal reve-
nue collections, amounts equal to all refunds made after June 30,1960, 
of amounts received as tax under the Federal Unemployment Tax Act 
(including interest on such refunds). 
"Administrative Expenditures 
"(c) (1) There are hereby authorized to be made available for ex-
penditure out of the employment security administration account for 
the fiscal year ending June 30, 1961, and for each fiscal year there-
after— 
" (A) such amounts (not in excess of $350,000,000 for any fiscal 
year) as the Congress may deem appropriate for the purpose 
of— 
"(i) assisting the States in the administration of their un-
employment compensation laws as provided in title I I I (in-
cluding administration pursuant to agreements under any 
Federal unemployment compensation law, except the Tem-
porary Unemployment 
Compensation Act of 1958, as 
H ^^^- ^^^Q ^^^ 
amended), 
note. 
"(ii) the establishment and maintenance of systems of 
public employment offices in accordance with the Act of June 
6,1933, as amended (29 U.S.C, sees. 49-49n), and 
48 stat. 113. 
"(iii) carrying into effect section 2012 of title 38 of the 
United States Code; 
'2 stat. 1221. 
"(B) such amounts as the Congress may deem appropriate for 
the necessary expenses of the Department of Labor for the per-
formance of its functions under— 
" (i) this title and titles I I I and X I I of this Act, 
42 use 501-503; 
"(ii) the Federal Unemployment Tax Act, 
'^°^'' ""• ^'^• 
" (iii) the provisions of the Act of June 6,1933, as amended, 
29 USID" 49-4'9k 
"(iv) subchapter II of chapter 41 (except section 2012) 
72 stat. 1221. * 
of title 38 of the United States Code, and 
"(v) any Federal unemployment compensation law, ex-
cept the Temporary Unemployment Compensation Act of 
1958, as amended. 
"(2) The Secretary of the Treasury is directed to pay from the 
employment security administration account into the Treasury as 
miscellaneous receipts the amount estimated by him which will be 
expended during a three-month period by the Treasury Department 
for the performance of its functions under— 
"(A) this title and titles I I I and X I I of this Act, including the 
expenses of banks for servicing unemployment benefit payment 
and clearing accounts which are offset by the maintenance of 
balances of Treasury funds with such banks. 
42 use 501-503. 
Post, p. 978. 
972 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
Post, p. 980. 
«(g^ ^^^ Federal Unemployment Tax Act, and 
"(C) any Federal unemployment compensation law with re-
spect to which responsibility for administration is vested in the 
Secretary of Labor. 
In determining the expenses taken into account under subparagraphs 
(B) and (C), there shall be excluded any amount attributable to the 
42 use 1400. 
Temporary Unemployment Compensation Act of 1958, as amended. 
If it subsequently appears that the estimates under this paragraph in 
any particular period w^ere too high or too low, appropriate adjust-
ments shall be made by the Secretary of the Treasury in future 
payments. 
"Additional Tax Attributable to Reduced Credits 
" (d) (1) The Secretary of the Treasury is directed to transfer from 
the employment security administration account— 
"(A) To the Federal unemployment account, an amount equal 
to the amount by which— 
"(i) 100 per centum of the additional tax received under 
the Federal Unemployment Tax Act with respect to any State 
by reason of the reduced credits provisions of section 3302(c) 
(2) or (3) of such Act and covered into the Treasury for the 
repayment of advances made to the State under section 1201, 
exceeds 
"(ii) the amount transferred to the account of such State 
pursuant to subparagraph (B) of this paragraph. 
Any amount transferred pursuant to this subparagraph shall be 
credited against, and shall operate to reduce, that balance of ad-
vances, made under section 1201 to the State, with respect to which 
employers paid such additional tax. 
"(B) To the account (in the Unemployment Trust Fund) of 
the State with respect to w^hich employers paid such additional 
tax, an amount equal to the amount by which such additional tax 
received and covered into the Treasury exceeds that balance of 
advances, made under section 1201 to the State, with respect to 
which employers paid such additional tax. 
If, for any taxable year, there is with respect to any State both a bal-
ance described in section 3302(c)(2) of the Federal Unemployment 
Tax Act and a balance described in section 3302(c) (3) of such Act, 
this paragraph shall be applied separately with respect to section 3302 
(c) (2) (and the balance described therein) and separately with re-
spect to section 3302(c) (3) (and the balance described therein). 
"(2) The Secretary of the Treasury is directed to transfer from 
the employment security administration account— 
"(A) To the general fund of the Treasury, an amount equal 
to the amount by which— 
"(i) 100 per centum of the additional tax received under 
the Federal Unemployment Tax Act with respect to any 
State by reason of the reduced credit provision of section 104 
of the Temporary Unemployment Compensation Act of 1958, 
as amended, and covered into the Treasury, exceeds 
"(ii) the amount transferred to the account of such State 
pursuant to subparagraph (B) of this paragraph. 
"(B) To the account (in the Unemployment Trust Fund) of 
the State with respect to which employers paid such additional 
tax, an amount equal to the amount by which— 
"(i) such additional tax received and covered into the 
Treasury, exceeds 
42 use 1400c. 
74 S T A T . ] 
PUBLIC LAW 8 6 - 7 7 8 - S E P T . 13, 1960 
973 
"(ii) the total amount restorable to the Treasury under 
section 104 of the Temporary Unemployment Compensation 
'^^ "^^ i4ooc. 
Act of 1958, as amended, as limited by Public Law 85-457. 
Ij us^c eal^note. 
"(3) Transfers under this subsection shall be as of the beginning 
of the month succeeding the month in which the moneys were credited 
to the employment security administration account pursuant to sub-
section (b) (2). 
"Revolving Fund 
"(e)(1) There is hereby established in the Treasury a revolving 
fund which shall be available to make the advances authorized by this 
subsection. There are hereby authorized to be appropriated, without 
fiscal year limitation, to such revolving fund such amounts as may be 
necessary for the purposes of this section. 
"(2) The Secretary of the Treasury is directed to advance from 
time to time from the revolving fund to the employment security 
administration account such amounts as may be necessary for the 
purposes of this section. 
If the net balance in the employment 
security administration account as of the beginning of any fiscal year 
is $250,000,000, no advance may be made under this subsection during 
such fiscal year. 
"(3) Advances to the employment security administration account 
made under this subsection shall bear interest until repaid at a rate 
equal to the average rate of interest (computed as of the end of the 
calendar month next preceding the date of such advance) borne by all 
interest-bearing obligations of the United States then forming a part 
of the public debt; except that where such average rate is not a multiple 
of one-eighth of 1 per centum, the rate of interest shall be the multiple 
of one-eighth of 1 per centum next lower than such average rate. 
"(4) Advances to the employment security administration account 
made under this subsection, plus interest accrued thereon, shall be re-
paid by the transfer from time to time, from the employment security 
administration account to the revolving fund, of such amounts as the 
Secretary of the Treasury, in consultation with the Secretary of Labor, 
determines to be available in the employment security administration 
account for such repayment. 
Any amount transferred as a repayment 
under this paragraph shall be credited against, and shall operate to 
reduce, any balance of advances (plus accrued interest) repayable 
under this subsection. 
"Determination of Excess and Amount To Be Retained in Employ-
ment Security Administration Account 
"(f)(1) The Secretary of the Treasury shall determine as of the 
close of each fiscal year (beginning with the fiscal year ending June 30, 
1961) the excess in the employment security administration account. 
"(2) The excess in the employment security administration account 
as of the close of any fiscal year is the amount by which the net 
balance in such account as of such time (after the application of section 
902(b)) exceeds the net balance in the employment security admin-
istration account as of the beginning of that fiscal year (including the 
fiscal year for which the excess is bein^ computed) for which the net 
balance was higher than as of the beginning of any other such fiscal 
year. 
"(3) If the entire amount of the excess determined under para-
graph (1) as of the close of any fiscal year is not transferred to the 
Federal unemployment account, there shall be retained (as of the 
beginning of the succeeding fiscal year) in the employment security 
administration account so much of the remainder as does not increase 
Post, 
p. 974. 
974 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
the net balance in such account (as of the beginning of such succeed-
ing fiscal year) above $250,000,000. 
"(4) For the purposes of this section, the net balance in the em-
ployment security administration account as of any time is the amount 
in such account as of such time reduced by the sum of— 
"(A) the amounts then subject to transfer pursuant to sub-
section (d), and 
"(B) the balance of advances (plus interest accrued thereon) 
then repayable to the revolving fund established by subsection (e). 
The net balance in the employment security administration account 
as of the beginning of any fiscal year shall be determined after the 
disposition of the excess in such account as of the close of the preceding 
fiscal year. 
"TRANSFERS BETWEEN FEDERAL UNEMPLOYMENT ACCOUNT AND 
EMPLOYMENT SECURITY ADMINISTRATION ACCOUNT 
"Transfers to Federal Unemployment Account 
"SEC. 902. (a) Whenever the Secretary of the Treasury deter-
Ante, p. 973. 
iriines pursuant to section 901 (f) that there is an excess in the employ-
ment security administration account as of the close of any fiscal 
year, there shall be transferred (as of the beginning of the succeeding 
fiscal year) to the Federal unemployment account the total amount 
of such excess or so much thereof as is required to increase the amount 
in the Federal unemployment account to whichever of the following 
is the greater: 
"(1) $550,000,000, or 
"(2) The amount (determined by the Secretary of Labor and 
certified by him to the Secretary of the Treasury) equal to four-
tenths of 1 per centum of the total wages subject to contributions 
under all State unemployment compensation laws for the calendar 
year ending during the fiscal year for which the excess is 
determined. 
"Transfers to Employment Security Administration Account 
"(b) The amount, if any, by which the amount in the Federal un-
employment account as of the close of any fiscal year exceeds the 
greater of the amounts specified in paragraphs (1) and (2) of sub-
section (a) shall be transferred to the employment security adminis-
tration account as of the close of such fiscal year. 
" A M O U N T S TRANSFERRED TO STATE ACCOUNTS 
"In General 
"SEC. 903. (a)(1) Except as provided in subsection (b), when-
Post, p. 979. 
ever, after the application of section 1203 with respect to the excess 
in the employment security administration account as of the close of 
any fiscal year, there remains any portion of such excess, the remainder 
of such excess shall be transferred (as of the beginning of the suc-
ceeding 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 July 1— 
"(A) shall be determined by the Secretary of Labor and certi-
fied by him to the Secretary of the Treasury before that date on the 
basis of reports furnished by the States to the Secretary of Labor 
before June 1, and 
74 S T A T . ] 
PUBLIC LAW 8 6 - 7 7 8 - S E P T . 13, 1960 
975 
"(B) shall bear the same ratio to the total amount to be so 
transferred as the amount of wages subject to contributions under 
such State's unemployment compensation law during the preced-
ing calendar year which have been reported to the State before 
May 1 bears to the total of wages subject to contributions under 
all State unemployment compensation laws during such calendar 
year which have been reported to the States before May 1. 
"Limitations on Transfers 
"(b) (1) If the Secretary of Labor finds that on July 1 of any fiscal 
year— 
" (A) a State is not eligible for certification under section 303, or 
^^ ^^^ ^o^. 
"(B) the law of a State is not approvable under section 3304 
of the Federal Unemployment Tax Act, 
^°^'- ^' ^*^-
then the amount available for transfer to such State's account shall, 
in lieu of being so transferred, be transferred to the Federal unemploy-
ment account as of the beginning of such July 1. If, during the fiscal 
year beginning on such July 1, the Secretary of Labor finds and 
certifies to the Secretary of the Treasury that such State is eligible for 
certification under section 303, 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 July 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 trans-
ferred 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 1201. The sum by which 
^°«'' P- ^^S. 
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 the date of 
the enactment of the Employment Security Act of 1960 to 
the State under section 1201, and 
"(ii) second, any balance of advances made on or after 
such date to the State under section 1201. 
"Use of Transferred Amounts 
"(c) (1) Except as provided in paragraph (2), amounts transferred 
to the account of a State pursuant to subsections (a) and (b) shall be 
used only in the payment of cash benefits to individuals with respect 
to their unemployment, exclusive of expenses of administration. 
"(2) A State may, pursuant to a specific appropriation made by the 
legislative body of the State, use money withdrawn from its account 
in the payment of expenses incurred by it for the administration of 
its unemployment compensation law and public employment offices if 
and only if— 
"(A) the purposes and amounts were specified in the law mak-
ing the appropriation, 
"(B) the appropriation law did not authorize the obligation of 
such money after the close of the two-year period which began on 
the date of enactment of the appropriation law. 
976 
PUBUC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
"(C) the money is withdrawn and the expenses are incurred 
after such date of enactment, and 
"(D) the appropriation law limits the total amount which 
may be obligated during a fiscal year to an amount which does 
not exceed the amount by which (i) the aggregate of the amounts 
transferred to the account of such State pursuant to subsections 
(a) and (b) during such fiscal year and the four preceding fiscal 
years, 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 during such five fiscal 
years. 
For the purposes of subparagraph (D), amounts used by a State 
during any fiscal year shall be charged against equivalent amounts 
which were first transferred and which have not previously been so 
charged; except that no amount obligated for administration during 
any fiscal year may be charged against any amount transferred dur-
ing a fiscal year earlier than the fourth preceding fiscal year. 
"UNEMPLOYMENT TRUST FUND 
"Establishment, etc. 
"SEC. 904. (a) There is hereby established in the Treasury of the 
United States a trust fund to be known as the 'Unemployment Trust 
Fund', hereinafter in this title called the 'Fund'. 
The Secretary of 
the Treasury is authorized and directed to receive and hold in the 
Fund all moneys deposited therein by a State agency from a State 
unemployment fund, or by the Railroad Retirement Board to the 
credit of the railroad unemployment insurance account or the railroad 
unemployment insurance administration fund, or otherwise deposited 
in or credited to the Fund or any account therein. 
Such deposit 
may be made directly with the Secretary of the Treasury, w^th any 
depositary designated by him for such purpose, or with any Federal 
Reserve Bank. 
"Investments 
"(b) It shall be the duty of the Secretary of the Treasury to invest 
such portion of the Fund as is not, in his judgment, required to meet 
current withdrawals. Such investment may be made only in interest-
bearing obligations of the United States or in obligations guaranteed 
as to both principal and interest by the United States. For such 
purpose such obligations may be acquired (1) on original issue at the 
issue price, or (2) by purchase of outstanding obligations at the 
market price. 
The purposes for which obligations of the United 
31 use 7^74' 
States may be issued under the Second Liberty Bond Act, as amended, 
are herebv extended to authorize the issuance at par of special obliga-
tions exclusively to the Fund. 
Such special obligations shall bear 
interest at a rate equal to the average rate of interest, computed as of 
the end of the calendar month next preceding the date of such issue, 
borne by all interest-bearing obligations of the United States then 
forming part of the public debt; except that where such average rate 
is not a multiple of one-eighth of 1 per centum, the rate of interest 
of such special obligations shall be the multiple of one-eighth of 1 
per centum next lower than such average rate. 
Obligations other 
than such special obligations may be acquired for the Fund only on 
such terms as to provide an investment yield not less than the yield 
which would be required in the case of special obligations if issued 
to the Fund upon the date of such acquisition. Advances made to 
Post, p. 979. 
^]^e Federal unemployment account pursuant to section 1203 shall 
not be invested. 
Post, 
pp. 9 7 8, 
979. 
74 ST AT.] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
977 
"Sale or Kedemption of Obligations 
"(c) Any obligations acquired by the Fimd (except special obliga-
tions issued exclusively to the Fund) may be sold at the market price, 
and such special obligations may be redeemed at par plus accrued 
interest. 
"Treatment of Interest and Proceeds 
"(d) The interest on, and the proceeds from the sale or redemption 
of, any obligations held in the Fund shall be credited to and form a 
part of the Fund. 
"Separate Book Accounts 
"(e) The Fund shall be invested as a single fund, but the Secretary 
of the Treasury shall maintain a separate book account for each State 
agency, the employment security administration account, the Federal 
unemployment account, the railroad unemployment insurance account, 
and the railroad unemployment insurance administration fund and 
shall credit quarterly (on March 31, June 30, September 30, and De-
cember 31, of each year) to each account, on the basis of the average 
daily balance of such account, a proportionate part of the earnings of 
the Fund for the quarter ending on such date. For the purpose of this 
subsection, the average daily balance shall be computed— 
"(1) in the case of any State account, by reducing (but not 
below zero) the amount in the account by the balance of advances 
made to the State under section 1201, and 
" (2) in the case of the Federal unemployment account— 
" (A) by adding to the amount in the account the aggregate 
of the reductions under paragraph (1), and 
"(B) by subtracting from the sum so obtained the balance 
of advances made under section 1203 to the account. 
"Payments to State Agencies and Railroad Retirement Board 
"(f) The Secretary of the Treasury is authorized and directed to 
pay out of the Fund to any State agency such amount as it may duly 
requisition, not exceeding the amount standing to the account of such 
State agency at the time of such payment. 
The Secretary of the 
Treasury is authorized and directed to make such payments out of the 
railroad unemployment insurance account for the payment of bene-
fits, and out of the railroad unemployment insurance administration 
fund for the payment of administrative expenses, as the Railroad 
Retirement Board may duly certify, not exceeding the amount stand-
ing to the credit of such account or such fund, as the case may be, at 
the time of such payment. 
"Federal Unemployment Account 
" (g) There is hereby established in the Unemployment Trust Fund 
a Federal unemployment account. There is hereby authorized to be 
appropriated to such Federal unemployment account a sum equal to 
(1) the excess of taxes collected prior to July 1, 1946, under title 
I X of this Act or under the Federal Unemployment Tax Actj over 
^"'*' "• ^^o-
the total unemployment administrative expenditures made prior to 
July 1, 1946, plus (2) the excess of taxes collected under the Federal 
Unemployment Tax Act after June 30, 1946, and prior to July 1, 
1953, over the unemployment administrative expenditures made after 
June 30, 1946, and prior to July 1, 1953. As used in this subsection, 
the term 'unemployment administrative expenditures' means expendi-
tures for grants under title I I I of this Act, expenditures for the 
^^ use 501-503. 
48232 0-61-62 
^ 
42 u s e 
1103 
note. 
978 
PUBLIC LAW 86-778-SEPT. 13, I960 
[74 S T A T . 
administration of that title by the Social Security Board, the Federal 
Security Administrator, or the Secretary of Labor, and expenditures 
Ante, p. 970. 
foj. ^he" administration of title I X of this Act, or of the Federal 
Post, p. 980. 
Unemployment Tax Act, by the Department of the Treasury, the 
Social Security Board, the Federal Security Administrator, or the 
Secretary of Labor. For the purposes of this subsection, there shall 
be deducted from the total amount of taxes collected prior to July 1, 
1943, under title I X of this Act, the sum of $40,561,886.43 which was 
authorized to be appropriated by the Act of August 24, 1937 (50 
Stat. 754), and the sum of $18,451,846 which was authorized to be 
appropriated by section 11(b) of the Kailroad Unemployment 
II J'|t- gigios- 
Insurance Act." 
AMENDMENT OF TITLE XII OF THE SOCIAL SECURITY ACT 
SEC. 522. (a) Title X I I of the Social Security Act (42 U.S.C, sec. 
1321 and following) is amended to read as follows: 
"TITLE XII—ADVANCES TO STATE 
UNEMPLOYMENT 
FUNDS 
"ADVANCES TO STATE UNEMPLOYMENT FUNDS 
"SEC. 1201. (a) (1) Advances shall be made to the States from the 
Federal unemployment account in the Unemployment Trust Fund as 
provided in this section, and shall be repayable, without interest, in 
^A^nte, pp. 972, the manner provided in sections 901(d)(1), 903(b)(2), and 1202. 
An advance to a State for the payment of compensation in any month 
may be made if— 
"(A) the Governor of the State applies therefor no earlier 
than the first day of the preceding month, and 
"(B) he furnishes to the Secretary of Labor his estimate of the 
amount of an advance which will be required by the State for 
the payment of compensation in such month. 
"(2) In the case of any application for an advance under this sec-
tion to any State for any month, the Secretary of Labor shall— 
"(A) determine the amount (if any) which he finds will be 
required by such State for the payment of compensation in such 
month, and 
"(B) certify to the Secretary of the Treasury the amount (not 
greater than the amount estimated by the Governor of the State) 
determined under subparagraph (A). 
The aggregate of the amounts certified by the Secretary of Labor 
with respect to any month shall not exceed the amount which the 
Secretary of the Treasury reports to the Secretary of Labor is avail-
able in the Federal unemployment account for advances with respect 
to such month. 
" (3) For purposes of this subsection— 
"(A) an application for an advance shall be made on such 
forms, and shall contain such information and data (fiscal and 
otherwise) concerning the operation and administration of the 
State unemployment compensation law, as the Secretary of Labor 
deems necessary or relevant to the performance of his duties 
under this title, 
"(B) the amount required by any State for the payment of 
compensation in any month shall be determined with due allow-
ance for contingencies and taking into account all other amounts 
that will be available in the State's unemployment fund for the 
payment of compensation in such month, and 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
979 
"(C) the term 'compensation' means cash benefits payable to 
individuals with respect to their unemployment, exclusive of ex-
penses of administration. 
"(b) The Secretary of the Treasury shall, prior to audit or settle-
ment by the General Accounting Office, transfer from the Federal 
unemployment account to the account of the State in the Unemploy-
ment Trust Fund the amount certified under subsection (a) by the 
Secretary of Labor (but not exceeding that portion of the balance in 
the Federal unemployment account at the time of the transfer which 
is not restricted as to use pursuant to section 903(b) (1)). 
Ante, 
p. 975. 
II 
REPAYMENT BY STATES OF ADVANCES TO STATE UNEMPLOYMENT FUNDS 
"SEC. 1202. The Governor of any State may at any time request 
that funds be transferred from the account of such State to the Fed-
eral unemployment account in repayment of part or all of that balance 
of advances, made to such State under section 1201, specified in the 
request. The Secretary of Labor shall certify to the Secretary of the 
Treasury the amount and balance specified in the request; and the 
Secretary of the Treasury shall promptly transfer such amount in 
reduction of such balance. 
u 
ADVANCES TO FEDERAL UNEMPLOYMENT ACCOUNT 
"SEC. 1203. There are hereby authorized to be appropriated to the 
Federal unemployment account, as repayable advances (without in-
terest), such sums as may be necessary to carry out the purposes of 
this title. Whenever, after the application of section 901(f) (3) with 
respect to the excess in the employment security administration ac-
count as of the close of any fiscal year, there remains any portion of 
such excess, so much of such remainder as does not exceed the balance 
of advances made pursuant to this section shall be transferred to the 
general fund of the Treasury and shall be credited against, and shall 
operate to reduce, such balance of advances. 
Ante, 
p. 973. 
U DEFINITION OF GOVERNOR 
"SEC. 1204. When used in this title, the term 'Governor' includes the 
Commissioners of the District of Columbia." 
(b) (1) No amount shall be transferred on or after the date of the 
enactment of this Act from the Federal unemployment account to the 
account of any State in the Unemployment Trust Fund pursuant to 
any application made under section 1201(a) of the Social Security 
Act as in effect before such date; except that, if— 
(A) some but not all of an amount certified by the Secretary 
of Labor to the Secretary of the Treasury for transfer to the ac-
count of any State was transferred to such account before such 
date, and 
(B) the Governor of such State, after the date of the enact-
ment of this Act, requests the Secretary of the Treasury to transfer 
all or any part of the remainder to such account, 
the Secretary of the Treasury shall, prior to audit or settlement by 
the General Accounting Office, transfer from the Federal unemploy-
ment account to the account of such State in the Unemployment Trust 
Fund the amount so requested or (if smaller) the amount available 
in the Federal unemployment account at the time of the transfer. No 
such amount shall be transferred under this paragraph after the one-
year period beginning on the date of the enactment of this Act. 
(2) For purposes of section 3302(c) of the Federal Unemployment 
^°^'' P- ^^°-
Tax Act and titles IX and XII of the Social Security Act^ if any Ji"'^' PP- 9^°' 
980 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
amount is transferred pursuant to paragraph (1) to the unemploy-
ment account of any State, such amount shall be treated as an ad-
vance made before the date of the enactment of this Act. 
AMENDMENTS TO THE FEDERAL UNEMPLOYMENT TAX ACT 
Increase in Tax Rate 
26 use 3301. 
SEC. 523. (a) Section 3301 of the Internal Revenue Code of 1954 
(relating to rate of tax under Federal Unemployment Tax Act) is 
amended— 
(1) by striking out "1955" and inserting in lieu thereof "1961", 
and 
(2) by striking out "3 percent" and inserting in lieu thereof 
"3.1 percent". 
Computation of Credits Against Tax 
26 use 3302. 
^jj^ Sectiou 3302 of such Code (relating to credits against tax) is 
amended by striking out subsection (c) and inserting in lieu thereof 
the following new subsections: 
" (c) 
LIMIT ON TOTAL CREDITS.— 
"(1) The total credits allowed to a taxpayer under this section 
shall not exceed 90 percent of the tax against which such credits 
are allowable. 
"(2) If an advance or advances have been made to the unem-
ployment account of a State under title X I I of the Social Se-
Ante, pp. 9 7 8, 
curity Act before the date of the enactment of the Employment 
Security Act of 1960, then the total credits (after applying sub-
sections (a) and (b) and paragraph (1) of this subsection) 
otherwise allowable under this section for the taxable year in the 
case of a taxpayer subject to the unemployment compensation 
law of such State shall be reduced— 
"(A) in the case of a taxable year baginning with the 
fourth consecutive January 1 as of the beginning of which 
there is a balance of such advances, by 5 percent of the tax 
imposed by section 3301 with respect to the wages paid by 
such taxpayer during such taxable year which are attrib-
utable to such State; and 
"(B) in the case of any succeeding taxable year beginning 
with a consecutive January 1 as of the beginning of which 
there is a balance of such advances, by an additional 5 per-
cent, for each such succeeding taxable year, of the tax im-
posed by section 3301 with respect to the wages paid by such 
taxpayer during such taxable year which are attributable to 
such State. 
"(3) If an advance or advances have been made to the un-
employment account of a State under title X I I of the Social 
Security Act on or after the date of the enactment of the Em-
ployment Security Act of 1960, then the total credits (after 
applying subsections (a) and (b) and paragraphs (1) and (2) 
of this subsection) otherwise allowable under this section for the 
taxable year in the case of a taxpayer subject to the unemploy-
ment compensation law of such State shall be reduced— 
"(A) (i) in the case of a taxable year beginning with the 
second consecutive January 1 as of the beginning of which 
there is a balance of such advances, by 10 percent of the 
tax imposed by section 3301 with respect to the wages paid 
by such taxpayer during such taxable year which are at-
tributable to such State: and 
74 S T A T . ] 
PUBLIC LAW 8 6 - 7 7 8 ~ S E P T . 13, 1960 
981 
"(ii) in the case of any succeeding taxable year beginning 
with a consecutive January 1 as of the beginning of which 
there is a balance of such advances, by an additional 10 per-
cent, for each such succeeding taxable year, of the tax im-
posed by section 3301 with respect to the wages paid by 
^"*°' P- ^^°-
such taxpayer during such taxable year which are attribu-
table to such State; 
"(B) in the case of a taxable year beginning w ith the third 
or fourth consecutive January 1 as of the beginning of which 
there is a balance of such advances, by the amount deter-
mined by multiplying the wages paid by such taxpayer during 
such taxable year which are attributable to such State by the 
percentage (if any) by which— 
"(i) 2.7 percent, exceeds 
"(ii) the average employer contribution rate for such 
State for the calendar year preceding such taxable year; 
and 
"(C) in the case of a taxable year beginning with the fifth 
or any succeeding consecutive January 1 as of the beginning 
of which there is a balance of such advances, by the amount 
determined by multiplying the wages paid by such taxpayer 
during such taxable year which are attributable to such State 
by the percentage (if any) by which— 
"(i) the 5-year benefit cost rate applicable to such 
State for such taxable year or (if higher) 2.7 per-
cent, exceeds 
"(ii) the average employer contribution rate for such 
State for the calendar year preceding such taxable year. 
"(d) DEFINITIONS AND SPECIAL RULES RELATING TO SUBSECTION 
(c). 
"(1) RATE OF TAX DEEMED TO BE 3 PERCENT.—In applying sub-
section (c), the tax imposed by section 3301 shall be computed at 
the rate of 3 percent in lieu of 3.1 percent. 
"(2) WAGES ATTRIBUTABLE TO A PARTICULAR STATE.—For pur-
poses of subsection (c), wages shall be attributable to a particular 
State if they are subject to the unemployment compensation law 
of the State, or (if not subject to the unemployment compensation 
law of any State) if they are determined (under rules or regula-
tions prescribed by the Secretary or his delegate) to be attribut-
able to such State. 
"(3) ADDITIONAL TAXES INAPPLICABLE WHERE ADVANCES ARE 
REPAID BEFORE N
O
V
E
M
B
E
R 10 O
F T
A
X
A
B
L
E YEAR.—Paragraph (2) or 
(3) of subsection (c) shall not apply with respect to any State for 
the taxable year if (as of the beginning of November 10 of such 
year) there is no balance of advances referred to in such para-
graph. 
"(4) AVERAGE EMPLOYER CONTRIBUTION RATE.—For purposes of 
subparagraphs (B) and (C) of subsection (c)(3), the average 
employer contribution rate for any State for any calendar year 
is that percentage obtained by dividing— 
"(A) the total of the contributions paid into the State 
unemployment fund with respect to such calendar year, by 
"(B) the total of the remuneration subj ect to contributions 
under the State unemployment compensation law with re-
spect to such calendar year. 
For purposes of subparagraph (C) of subsection (c) (3), if the 
average employer contribution rate for any State for any cal-
endar year (determined without regard to this sentence) equals 
or exceeds 2.7 percent, such rate shall be determined by increas-
982 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 ST A T . 
ing the amount taken into account under subparagraph (A) of 
the preceding sentence by the aggregate amount of employee pay-
ments (if any) into the unemployment fund of such State with 
respect to such calendar year which are to be used solely in the 
payment of unemployment compensation. 
"(5) 5-YEAR BENEFIT C
O
S
T RATE.—For purposes of Subpara-
graph (C) of subsection (c) (3), the 5-year benefit cost rate ap-
plicable to any State for any taxable year is that percentage 
obtained by dividing— 
" (A) one-fifth of the total of the compensation paid under 
the State unemployment compensation law during the 5-year 
period ending at the close of the second calendar year pre-
ceding such taxable year, by 
"(B) the total of the remuneration subject to contribu-
tions under the State unemployment compensation law with 
respect to the first calendar year preceding such taxable year. 
"(6) ROUNDING.—If any percentage referred to in either sub-
paragraph (B) or (C) of subsection (c) (3) is not a multiple of .1 
percent, it shall be rounded to the nearest multiple of .1 percent. 
" (7) 
DETERMINATION AND CERTIFICATION OF PERCENTAGES.—The 
percentage referred to in subsection (c)(3) (B) or (C) for any 
taxable year for any State having a balance referred to therein 
shall be determined by the Secretary of Labor, and shall be certi-
fied by him to the Secretary of the Treasury before June 1 of 
such year, on the basis of a report furnished by such State to the 
Secretary of Labor before May 1 of such year. Any such State 
report shall be made as of the close of March 31 of the taxable 
year, and shall be made on such forms, and shall contain such 
information, as the Secretary of Labor deems necessary to the 
performance of his duties under this section. 
" (8) CROSS REFERENCE .— 
"For reduction of total credits allowable under subsection (c), see 
section 104 of the Temporary Unemployment Compensation Act of 1958." 
Effective Date 
(c) The amendments made by subsection (a) shall apply only with 
respect to the calendar year 1961 and calendar years thereafter. 
42 use 501. 
Ante, p. 971. 
42 use 1400c. 
CONFORMING AMENDMENTS 
SEC. 524. (a) Section 301 of the Social Security Act is amended to 
read as follows: 
"APPROPRIATIONS 
"SEC. 301. The amounts made available pursuant to section 901(c) 
(1) (A) for the purpose of assisting the States in the administration 
of their unemployment compensation laws shall be used as hereinafter 
provided." 
(b) Section 104 of the Temporary Unemployment Compensation 
Act of 1958, as amended, is amended— 
(1) by striking out subsection (b); and 
(2) by amending subsection (a) by striking out the heading 
and "(a)", and by striking out "by December 1" and inserting in 
lieu thereof "before November 10". 
74 
S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
983 
PART 3—EXTENSION OF COVERAGE UNDER UNEMPLOYMENT 
COMPENSATION PROGRAM 
FEDERAL INSTRUMENTALITIES 
SEC. 531. (a) Section 3305(b) of the Internal Revenue Code of 1954 
is amended to read as follows: 
"(b) FEDERAL INSTRUMENTALITIES IN GENERAL.—The legislature of 
any State may require any instrumentality of the United States (other 
than an instrumentality to which section 3306(c)(6) applies), and 
the individuals in its employ, to make contributions to an unemploy-
ment fund under a State unemployment compensation law approved 
by the Secretary of Labor under section 3304 and (except as provided 
in section 5240 of the Revised Statutes, as amended (12 U.S.C., sec. 
484), and as modified by subsection (c)), to comply otherwise with 
such law. The permission granted in this subsection shall apply (A) 
only to the extent that no discrimination is made against such instru-
mentality, so that if the rate of contribution is uniform upon all other 
persons subject to such law on account of having individuals in their 
employ, and upon all employees of such persons, respectively, the con-
tributions required of such instrumentality or the individuals in its 
employ shall not be at a greater rate than is required of such other 
persons and such employees, and if the rates are determined sepa-
rately for different persons or classes of persons having individuals 
in their employ or for different classes of employees, the determination 
shall be based solely upon unemployment experience and other factors 
bearing a direct relation to unemployment risk; (B) only if such 
State law makes provision for the refund of any contributions re-
quired under such law from an instrumentality of the United States 
or its employees for any year in the event such State is not certified by 
the Secretary of Labor under section 3304 with respect to such year; 
and (C) only if such State law makes provision for the payment of 
unemployment compensation to any employee of any such instrumen-
tality of the United States in the same amount, on the same terms, 
and subject to the same conditions as unemployment compensation is 
payable to employees of other employers under the State unemploy-
ment compensation law." 
(b) The third sentence of section 3305(g) of such Code is amended 
by striking out "not wholly" and inserting in lieu thereof "neither 
wholly nor partially". 
(c) Section 3306(c) (6) of such Code is amended to read as follows: 
"(6) service performed in the employ of the United States 
Government or of an instrumentality of the United States which 
is— 
"(A) wholly or partially owned by the United States, or 
"(B) exempt from the tax imposed by section 3301 by 
virtue of any provision of law which specifically refers to 
such section (or the corresponding section of prior law) in 
granting such exemption;". 
(d) (1) Chapter 23 of such Code is amended by renumbering sec-
tion 3308 as section 3309 and by inserting after section 3307 the fol-
lowing new section: 
"SEC. 3308. INSTRUMENTALITIES OF THE UNITED STATES. 
"Notwithstanding any other provision of law (whether enacted 
before or after the enactment of this section) which grants to any 
instrumentality of the United States an exemption from taxation, such 
instrumentality shall not be exempt from the tax imposed by section 
3301 unless such other provision of law grants a specific exemption, 
by reference to section 3301 (or the corresponding section of prior 
law), from the tax imposed by such section." 
26 u s e 3305. 
Infra. 
Post, 
p» 986. 
26 u s e 3306. 
Ante, 
p. 980. 
26 U S e 
3308, 
3309, 3307. 
984 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 ST A T . 
42 u s e 1361. 
42 use 1367. 
73 Stat. 390. 
12 u s e 6 4 O
Z 
note. 
Ante, p. 983. 
(2) The table of sections for such chapter is amended by striking 
out the last line and inserting in lieu thereof the following: 
"Sec. 3308. Instrumentalities of the United States. 
"Sec. 3309. Short title." 
(e) So much of the first sentence of section 1501(a) of the Social 
Security Act as precedes paragraph (1) is amended by striking out 
"wholly" and inserting in lieu thereof "wholly or partially". 
(f) The first sentence of section 1507(a) of the Social Security Act 
is amended by striking out "wholly" and inserting in lieu thereof 
"wholly or partially". 
(g) Notwithstanding section 203(b) of the Farm Credit Act of 
1959, sections 3305(b), 3306(c) (6), and 3308 of the Internal Revenue 
Code of 1954 and sections 1501(a) and 1507(a) of the Social Security 
Act shall be applicable, according to their terms, to the Federal land 
banks, Federal intermediate credit banks, and banks for cooperatives. 
26 u s e 3306. 
AMERICAN AIRCRAFT 
SEC. 532. (a) So much of section 3306(c) of the Internal Revenue 
Code of 1954 as precedes paragraph (1) thereof is amended by striking 
out "or (B) on or in connection with an American vessel" and all that 
follows down through the phrase "outside the United States," and by 
inserting in lieu thereof the following: "or (B) on or in connection 
with an American vessel or American aircraft under a contract of 
service which is entered into within the United States or during the 
performance of which and while the employee is employed on the 
vessel or aircraft it touches at a port in the United States, if the em-
ployee is employed on and in connection with such vessel or aircraft 
when outside the United States,". 
(b) Section 3306 (c) (4) of such Code is amended to read as follows: 
"(4) service performed on or in connection with a vessel or 
aircraft not an American vessel or American aircraft, if the 
employee is employed on and in connection with such vessel or 
aircraft when outside the United States;". 
(c) Section 3306 (m) of such Code is amended— 
(1) by striking out the heading and inserting in lieu thereof 
the following: 
" (m) AMERICAN VESSEL AND AIRCRAFT.—"; and 
(2) by striking out the period at the end thereof and inserting 
in lieu thereof a semicolon and the following: "and the term 
'American aircraft' means an aircraft registered under the laws 
of the United States." 
26 use 501. 
FEEDER ORGANIZATIONS, ETC. 
SEC. 533. Section 3306(c) (8) of the Internal Revenue Code of 1954 
is amended to read as follows: 
"(8) service performed in the employ of a religious, charitable, 
educational, or other organization described in section 501(c) (3) 
which is exempt from income tax under section 501 (a);". 
FRATERNAL BENEFICIARY SOCIETIES, AGRICULTURAL ORGANIZATIONS, VOL-
UNTARY EMPLOYEES' BENEFICIARY ASSOCIATIONS, ETC. 
SEC. 534. Section 3306(c) (10) of the Internal Revenue Code of 
1954 is amended to read as follows: 
"(10) (A) service performed in any calendar quarter in the 
employ of any organization exempt from income tax under sec-
tion 501(a) (other than an organization described in section 
74 S T A T . ] 
PUBLIC LAW 8 6 - 7 7 8 - S E P T . 13, 1960 
985 
401 (a)) or under section 521, if the remuneration for such service 
^^ "^^ '*°^' ^^i-
is less than $50, or 
"(B) service performed in the employ of a school, college, or 
university, if such service is performed by a student who is en-
rolled and is regularly attending classes at such school, college, or 
university;". 
EFFECTIVE DATE 
SEC. 535. The amendments made by this part (other than the amend-
ments made by subsections (e) and (i) of section 531) shall apply with 
respect to remuneration paid after 1961 for services performed after 
1961. The amendments made by subsections (e) and (f) of section 531 
shall apply with respect to any week of unemployment which begins 
after December 31,1960. 
PART 4—EXTENSION OF FEDERAL-STATE UNEMPLOYMENT COMPENSA-
TION PROGRAM To PUERTO RICO 
EXTENSION OF TITLES III, IX, AND XII OF THE SOCIAL SECURITY ACT 
SEC. 541. Effective on and after January 1,1961, paragraphs (1) and 
(2) of section 1101 (a) of the Social Security Act are amended to read 
'^^ "^^ ^^oi. 
as follows: 
"(1) The term 'State', except where otherwise provided, in-
cludes the District of Columbia and the Commonwealth of Puerto 
Rico, and when used in titles I, IV, V, VII, X, and XIVincludes 
JTu's^^^J'goi 
the Virgin Islands and Guam. 
701, 902! 1201,' 
" (2) The term 'United States' when used in a geographical sense ^^^ ^
• 
means, except where otherwise provided, the States, the District of 
Columbia, and the Commonwealth of Puerto Rico." 
FEDERAL EMPLOYEES AND EX-SERVICEMEN 
SEC. 542. (a) (1) Effective with respect to weeks of unemployment 
beginning after December 31, 1965, section 1503(b) of such Act is 
42 use i363. 
amended oy striking out "Puerto Rico or". 
(2) Effective with respect to first claims filed after December 31, 
1965, paragraph (3) of section 1504 of such Act is amended by strik- 
^^ ^^^ ^364. 
ing out "Puerto Rico or" wherever appearing therein. 
(b) (1) Effective on and after January 1,1961 (but only in the case 
of weeks of unemployment beginning before January 1, 1966)— 
(A) Section 1502(b) of such Act is amended W striking out 
^2 use 1362. 
" ( D ) Any" and inserting in lieu thereof "(b) (1) Except as pro-
vided in paragraph (2), any", and by adding at the end thereof 
the following new paragraph: 
"(2) In the case of the Commonwealth of Puerto Rico, the agree-
ment shall provide that compensation will be paid by the Common-
wealth of Puerto Rico to any Federal employee whose Federal service 
and Federal wages are assigned under section 1504 to such Common-
wealth, with respect to unemployment after December 31, 1960 (but 
only in the case of weeks of unemployment beginning before January 
1, 1966), in the same amount, on the same terms, and subject to the 
same conditions as the compensation which would be payable to such 
emplovee under the unemployment compensation law of the District 
of Columbia if such employee's Federal service and Federal wages 
had been included as employment and wages under such law, except 
that if such employee, without regard to his Federal service and Fed-
eral wages, has employment or wages sufficient to qualify for any com-
pensation during the benefit year under such law, then payments of 
compensation under this subsection shall be made only on the basis 
986 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 S T A T . 
of his Federal service and Federal wages. In applying this para-
Ante, p. 985. 
graph Or subsection (b) of section 1503, as the case may be, employ-
ment and wages under the unemployment compensation law of the 
Commonwealth of Puerto Rico shall not be combined with Federal 
service or Federal wages." 
(B) Section 1503(a) of such Act is amended by adding at the 
end thereof the following: "For the purposes of this subsection, 
the term 'State' does not include the Commonwealth of Puerto 
Rico." 
(C) Section 1503(b) of such Act is amended by adding at the 
end thereof the following: "This subsection shall apply in respect 
of the Commonwealth of Puerto Rico only if such Common-
wealth does not have an agreement under this title with the 
Secretary." 
(2) Effective on and after January 1, 1961 (but only in the case 
of first claims filed before January 1, 1966), section 1504 of such Act 
is amended by adding after and below paragraph (3) the following: 
"For the purposes of paragraph (2), the term 'United States' does 
not include the Commonwealth of Puerto Rico." 
(c) Effective on and after January 1,1961— 
(1) section 1503(d) of such Act is amended by striking out 
"Puerto Rico and", and by striking out "agencies" each place it 
appears and inserting in lieu thereof "agency"; and 
42 use 1371. 
^2) section 1511(e) of such Act is amended by striking out 
"Puerto Rico or". 
Ante, p. 984. 
^^^ rpj^^ j^g^ Sentence of section 1501(a) of such Act is amended 
to read as follows: 
"For the purpose of paragraph (5) of this subsection, the term 
'United States' when used in the geographical sense means the States, 
the District of Columbia, the Commonwealth of Puerto Rico, and 
the Virgin Islands." 
EXTENSION o r FEDERAL UNEMPLOYMENT TAX ACT 
SEC. 543. (a) Effective with respect to remuneration paid after 
December 31, 1960, for services performed after such date, section 
26 use 3306. 
3306(j) of the Internal Revenue Code of 1954 is amended to read as 
follows: 
"(j) STATE, UNITED STATES, AND CITIZEN.—For purposes of this 
chapter— 
"(1) STATE.—The term 'State' includes the District of Colum-
bia and the Commonwealth of Puerto Rico. 
"(2) UNITED STATES.—The term 'United States' when used in 
a geographical sense includes the States, the District of Columbia, 
and the Commonwealth of Puerto Rico. 
An individual who is a citizen of the Commonwealth of Puerto Rico 
(but not otherwise a citizen of the United States) shall be considered 
for purposes of this section, as a citizen of the United States." 
(b) The unemployment compensation law of the Commonwealth of 
Puerto Rico shall be considered as meeting the requirements of— 
(1) Section 3304(a)(2) of the Federal Unemployment Tax 
Act, if such law provides that no compensation is payable with 
respect to any day of unemployment occurring before January 1, 
1959. 
(2) Section 3304(a) (3) of the Federal Unemployment Tax 
42 use 503. 
Act and section 303(a) (4) of the Social Security Act, if such 
law contains the provisions required by those sections and if it 
requires that, on or before February 1, 1961, there be paid over to 
the Secretary of the Treasury, for credit to the Puerto Rico 
26 use 3304. 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
987 
account in the Unemployment Trust Fund, an amount equal to 
the excess of— 
(A) the aggregate of the moneys received in the Puerto 
Rico unemployment fund before January 1, 1961, over 
(B) the aggregate of the moneys paid from such fund 
before January 1, 1961, as unemployment compensation or 
as refunds of contributions erroneously paid. 
(c) Effective on and after January 1,1961, section 5(b) of the Act of 
June 6, 1933, as amended (29 U.S.C, sec. 49d(b)), is amended by 
^s ^tat. ii4. 
striking out "Puerto Rico, Guam," and inserting in lieu thereof 
"Guam". 
TITLE VI—MEDICAL SERVICES FOR T H E AGED 
AMENDMENTS TO TITLE I OF T H E SOCIAL SECURITY ACT 
SEC. 601. (a) The heading of title I of the Social Security Act is 
amended to read as follows: 
"TITLE I—GRANTS TO STATES FOR OLD-AGE ASSIST-
ANCE AND MEDICAL ASSISTANCE FOR T H E AGED" 
(b) Sections 1 and 2 of such Act are amended to read as follows: 
^^^ u s e 3o i, 
"APPROPRIATION 
"SECTION 1. For the purpose (a) of enabling each State as far as 
practicable under the conditions in such State, to furnish financial as-
sistance to a^ed needy individuals and of encouraging each State, as 
far as practicable under such conditions, to help such individuals 
attain self-care, and (b) of enabling each State, as far as practicable 
under the conditions in such State, to furnish medical assistance on 
behalf of aged individuals who are not recipients of old-age assistance 
but whose income and resources are insufficient to meet the costs of 
necessary medical services, there is hereby authorized to be appro-
priated for each fiscal year a sum sufficient to carry out the purposes 
of this title. The sums made available under this section shall be used 
for making payments to States which have submitted, and had ap-
proved by the Secretary of Health, Education, and Welfare (herein-
after referred to as the 'Secretary'), State plans for old-age assist-
ance, or for medical assistance for the aged, or for old-age assistance 
and medical assistance for the aged. 
"STATE OLD-AGE AND MEDICAL ASSISTANCE PLANS 
"SEC. 2. (a) A State plan for old-age assistance, or for medical 
assistance for the aged, or for old-age assistance and medical assistance 
for the aged must— 
"(1) provide that it shall be in effect in all political subdivi-
sions of the State, and, if administered by them, be mandatory 
upon them; 
" (2) provide for financial participation by the State; 
"(3) either provide for the establishment or designation of a 
single State agency to administer the plan, or provide for the 
establishment or designation of a single State agency to supervise 
the administration of the plan; 
988 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
"(4) provide for granting an opportunity for a fair hearing 
before the State agency to any individual whose claim for assist-
ance under the plan is denied or is not acted upon with reasonable 
promptness; 
"(5) provide such methods of administration (including meth-
ods relating to the establishment and maintenance of personnel 
standards on a merit basis, except that the Secretary shall exercise 
no authority with respect to the selection, tenure of office, and 
compensation of any individual employed in accordance with such 
methods) as are found by the Secretary to be necessary for the 
proper and efficient operation of the plan; 
"(6) provide that the State agency will make such reports, in 
such form and containing such information, as the Secretary may 
from time to time require, and comply with such provisions as 
the Secretary may from time to time find necessary to assure the 
correctness and verification of such reports; 
"(7) provide safeguards which restrict the use or disclosure of 
information concerning applicants and recipients to purposes 
directly connected with the administration of the State plan; 
"(8) provide that all individuals wishing to make application 
for assistance under the plan shall have opportunity to do so, 
and that such assistance shall be furnished with reasonable 
promptness to all eligible individuals; 
" (9) provide, if the plan includes assistance for or on behalf of 
individuals in private or public institutions, for the establishment 
or designation of a State authority or authorities which shall be 
responsible for establishing and maintaining standards for such 
institutions; 
" (10) if the State plan includes old-age assistance— 
"(A) provide that the State agency shall, in determining 
need for such assistance, take into consideration any other 
income and resources of an individual claiming old-age 
assistance; 
"(B) include reasonable standards, consistent with the ob-
jectives of this title, for determining eligibility for and the 
extent of such assistance; and 
"(C) provide a description of the services (if any) which 
the State agency makes available to applicants for and re-
cipients of such assistance to help them attain self-care, in-
cluding a description of the steps taken to assure, in the 
provision of such services, maximum utilization of other 
agencies providing similar or related services; and 
"(11) if the State plan includes medical assistance for the 
"(A) provide for inclusion of some institutional and some 
noninstitutional care and services; 
"(B) provide that no enrollment fee, premium, or similar 
charge will be imposed as a condition of any individual's 
eligibility for medical assistance for the aged under the plan; 
(C) provide for inclusion, to the extent required by regu-
lations prescribed by the Secretary, of provisions (conform-
ing to such regulations) with respect to the furnishing of 
such assistance to individuals who are residents of the State 
but are absent therefrom: 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
989 
"(D) include reasonable standards, consistent with the ob-
jectives of this title, for determining eligibility for and the 
extent of such assistance; and 
"(E) provide that no lien may be imposed against the 
proj)erty of any individual prior to his death on account of 
medical assistance for the aged paid or to be paid on his 
behalf under the plan (except pursuant to the judgment of a 
court on account of benefits incorrectly paid on behalf of 
such individual), and that there shall be no adjustment or 
recovery (except, after the death of such individual and his 
surviving spouse, if any, from such individual's estate) of 
any medical assistance for the aged correctly paid on behalf 
of such individual under the plan. 
"(b) The Secretary shall approve any plan which fulfills the con-
ditions specified in subsection (a), except that he shall not approve 
any plan which imposes, as a condition of eligibility for assistance 
under the plan— 
" (1) an age requirement of more than sixty-five years; or 
"(2) any residence requirement which (A) in the case of 
applicants for old-age assistance, excludes any resident of the 
State who has resided therein five years during the nine years 
immediately preceding the application for old-age assistance and 
has resided therein continuously for one year immediately preced-
mg the application, and (B) in the case of applicants for medical 
assistance for the aged, excludes any individual who resides in 
the State; or 
"(3) any citizenship requirement which excludes any citizen 
of the United States. 
"(c) Nothing in this title shall be construed to permit a State to 
have in etfect with respect to any period more than one State plan 
approved under this title." 
(c) Section 3(a) of such Act is amended to read as follows: 
^^ use 303. 
"SEC. 3. (a) From the sums appropriated therefor, the Secretary of 
the Treasury shall pay to each State which has a plan approved under 
this title, for each quarter, beginning with the quarter commencing 
October 1,1960— 
"(1) in the case of any State other than Puerto Rico, the Virgin 
Islands, and Guam, an amount equal to the sum of the f ollowmg 
proportions of the total amounts expended during such quarter 
as old-age assistance under the State plan (including expenditures 
for insurance premiums for medical or any other type of remedial 
care or the cost thereof)— 
"(A) four-fifths of such expenditures, not counting so 
much of any expenditure with respect to any month as 
exceeds the product of $30 multiplied by the total number 
of recipients of old-age assistance for such month (which 
total number, for purposes of this subsection, means (i) the 
number of individuals who received old-age assistance in the 
form of money payments for such month, plus (ii) the num-
ber of other individuals with respect to whom expenditures 
were made in such month as old-age assistance in the form 
of medical or any other type of remedial care) ; plus 
"(B) the Federal percentage (as defined in section 1101 (a) 
P°^*' P- 992. 
(8)) of the amount oy which such expenditures exceed the 
maximum which may be counted under clause (A), not count-
ing so much of any expenditure with respect to any month as 
exceeds the product of $65 multiplied by the total number of 
such recipients of old-age assistance for such month; plus 
990 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
"(C) the larger of the following: (i) the Federal medical 
percentage (as defined in section 6(c)) of the amount by 
which such expenditures exceed the maximum which may be 
counted under clause (B), not counting so much of any 
expenditure with respect to any month as exceeds (I) the 
product of $77 multiplied by the total number of such 
recipients of old-age assistance for such month, or (II) if 
smaller, the total expended as old-age assistance in the form 
of medical or any other type of remedial care with respect to 
such month plus the product of $65 multiplied by such total 
number of such recipients, or (ii) 15 per centum of the total 
of the sums expended during such quarter as old-age assist-
ance under the State plan in the form of medical or any other 
type of remedial care, not counting so much of any expendi-
ture with respect to any month as exceeds the product of $12 
multiplied by the total number of such recipients of old-age 
assistance for such month; and 
"(2) in the case of Puerto Rico, the Virgin Islands, and 
Guam, an amount equal to— 
"(A) one-half of the total of the sums expended during 
such quarter as old-age assistance under the State plan 
(including expenditures for insurance premiums for medical 
or any other type of remedial care or the cost thereof), not 
counting so much of any expenditure with respect to any 
month as exceeds $35 multiplied by the total number of 
recipients of old-age assistance for such month; plus 
"(B) the larger of the following amounts: (i) one-half 
of the amount by which such expenditures exceed the maxi-
mum which may be counted under clause (A), not counting 
so much of any expenditure w^ith respect to any month as 
exceeds (I) the product of $41 multiplied by the total num-
ber of such recipients of old-age assistance for such month, 
or (II) if smaller, the total expended as old-age assistance 
in the form of medical or any other type of remedial care 
with respect to such month plus the product of $35 multiplied 
by the total number of such recipients, or (ii) 15 per centum 
of the total of the sums expended during such quarter as 
old-age assistance under the State plan in the form of medi-
cal or any other type of remedial care, not counting so much 
of any expenditure with respect to any month as exceeds 
the product of $6 multiplied by the total number of such 
recipients of old-age assistance for such month; and 
"(3) m the case of any State, an amount equal to the Federal 
medical percentage (as defined in section 6(c)) of the total 
amounts expended during such quarter as medical assistance for 
the aged under the State plan (including expenditures for insur-
ance premiums for medical or any other type of remedial care or 
the cost thereof); and 
"(4) in the case of any State, an amount equal to one-half of 
the total of the sums expended during such quarter as found neces-
sary by the Secretary of Health, Education, and Welfare for the 
proper and efficient administration of the State plan, including 
services which are provided by the staff of the State agency (or 
of the local agency administering the State plan in the political 
subdivision) to applicants for and recipients of old-age assistance 
to help them attain self-care." 
42 use 303. 
(^j) Section 3(bU2) (B) of such Act is amended by striking out 
"old-age assistance and inserting in lieu thereof "assistance". 
74 S T A T . ] 
PUBLIC LAW 8 6 - 7 7 8 - S E P T . 13, 1960 
991 
(e) Section 4 of such Act is amended by striking out "State plan for 
old-age assistance which has been approved" and inserting in lieu 
thereof "State plan which has been approved under this title". 
(f) (1) Section 6 of such Act is amended by striking out "but does 
not include" and all that follows and inserting in lieu thereof "but 
does not include— 
"(1) any such payments to or care in behalf of anj'^ individual 
who is an inmate of a public institution (except as a patient in a 
medical institution) or any individual who is a patient in an 
institution for tuberculosis or mental diseases, or 
"(2) any such payments to any individual who has been diag-
nosed as having tuberculosis or psychosis and is a patient in a 
medical institution as a result thereof, or 
"(3^ any such care in behalf of any individual, who is a pa-
tient m a medical institution as a result of a diagnosis that he 
has tuberculosis or psychosis, with respect to any period after 
the individual has been a patient in such an institution, as a result 
of such diagnosis, for forty-two days." 
(2) Section 6 is further amended by inserting " ( a ) " immediately 
after "SEC. 6." and by adding after such section 6 the following new 
subsections: 
"(b) For purposes of this title, the term 'medical assistance for 
the aged' means payment of part or all of the cost of the following 
care and services for individuals sixty-five years of age or older who 
are not recipients of old-age assistance but whose income and re-
sources are insufficient to meet all of such cost— 
" (1) inpatient hospital services; 
" (2) skilled nursing-home services; 
"(3) physicians' services; 
" (4) outpatient hospital or clinic services; 
" (5) home health care services; 
" (6) private duty nursing services; 
" (7) physical therapy and related services; 
"(8) dental services; 
"(9) laboratory and X-ray services; 
"(10) prescribed drugs, eyeglasses, dentures, and prosthetic 
devices; 
" (11) diagnostic, screening, and preventive services; and 
"(12) any other medical care or remedial care recognized un-
der State law; 
except that such term does not include any such payments with re-
spect to— 
"(A) care or services for any individual who is an inmate of a 
public institution (except as a patient in a medical institution) or 
any individual who is a patient in an institution for tuberculosis 
or mental diseases; or 
"(B) care or services for any individual, who is a patient in a 
medical institution as a result of a diagnosis of tuberculosis or 
psychosis, with respect to any period after the individual has 
been a patient in such an institution, as a result of such diagnosis, 
for forty-two days. 
"(c) For purposes of this title, the term 'Federal medical percent-
age' for any State shall be 100 per centum less the State percentage; 
and the State percentage shall be that percentage which bears the 
same ratio to 50 per centum as the square of the per capita income of 
such State bears to the square of the per capita income of the con-
tinental United States (including Alaska) and Hawaii; except that 
(i) the Federal medical percentage shall in no case be less than 50 per 
centum or more than 80 per centum, and (ii) the Federal medical per-
42 use 304. 
42 use 306. 
/n/r*. 
992 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 S T A T . 
centage for Puerto Rico, the Virgin Islands, and Guam shall be 50 
per centum. The Federal medical percentag;e for any State shall be 
determined and promulgated in accordance with the provisions of sub-
paragraph (B) of section 1101(a)(8) (other than the proviso at 
the end thereof); except that the Secretary shall, as soon as possible 
after enactment of the Social Security Amendments of 1960, deter-
mine and promulgate the Federal medical percentage for each State— 
" (1) for the period beginning October 1,1960, and ending with 
the close of June 30, 1961, which promulgation shall be based 
on the same data with respect to per capita income as the data 
used by the Secretary in promulgating the Federal percentage 
(under section 1101(a) (8)) for such State for the fiscal year end-
ing June 30, 1961 (which promulgation of the Federal medical 
percentage shall be conclusive for such period), and 
"(2) for the period beginning July 1, 1961, and ending with 
the close of June 30, 1963, which promulgation shall be based on 
the same data with respect to per capita income as the data used 
by the Secretary in promulgating the Federal percentage (under 
section 1101(a) (8)) for such State for such period (which pro-
mulgation of the Federal medical percentage shall be conclusive 
for such period)." 
INCREASE IN LIMITATIONS ON ASSISTANCE PAYMENT TO PUERTO RICO, THE 
VIRGIN ISLANDS, AND GTJAM 
SEC. 602. Section 1108 of the Social Security Act is amended by— 
(1) striking out "$8,500,000" and inserting in lieu thereof 
"$9,000,000, of which $500,000 may be used only for payments 
certified with respect to section 3(a) (2) (B)"; 
(2) striking out "$300,000" and inserting in lieu thereof "$315,-
000, of which $15,000 may be used only for payments certified in 
respect to section 3(a) (2) (B)"; 
(3) striking out ^'$400,000" and inserting in lieu thereof "$420,-
000, of which $20,000 may be used only for payments certified in 
respect to section 3(a) (2) (B)"; and 
(4) striking out "titles I, IV, X, and XIV", and inserting in 
lieu thereof "titles I (other than section 3(a) (3) thereof), IV, 
X, and XIV". 
TECHNICAL AMENDMENT 
SEC. 603. (a) Section 618 of the Revenue Act of 1951 (65 Stat. 569) 
is amended by striking out "title I" and inserting in lieu thereof "title 
I (other than section 3(a)(3) thereof)". 
(b)The amendment made by subsection (a) shall take effect Octo-
ber 1,1960. 
EFFECTIVE DATES 
SEC. 604. The amendments made by section 601 of this Act shall take 
effect October 1, 1960, and the amendments made by section 602 shall 
be effective with respect to fiscal years ending after 1960. 
TITLE VII—MISCELLANEOUS 
INVESTMENT OF TRUST FUNDS 
SEC. 701. (a) Section 201(c) of the Social Security Act is amended 
by inserting after the third sentence the following new sentence: "The 
Board of Trustees shall meet not less frequently than once each six 
months." 
42 u s e 1308. 
Ante, p. 989. 
42 use 401. 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
993 
(b) Section 201 (c) (3) of such Act is amended to read as follows: 
"(3) Eeport immediately to the Congress whenever the Board 
of Trustees is of the opinion that the amount of either of the 
Trust Funds is unduly small;". 
(c) Section 201 (c) of such Act is further amended by striking out 
the period at the end of p a r a ^ p h (4) and inserting in lieu thereof 
"; and", and by inserting after paragraph (4) the following new 
paragraph: 
"(5) Eeview the general policies followed in managing the 
Trust Funds, and recommend changes in such policies, including 
necessary changes in the provisions of the law which govern the 
way in which the Trust Funds are to be managed." 
(d) Section 201(d) of such Act is amended to read as follows: 
^^ ^^^ ^^^' 
"(d) It shall be the duty of the Managing Trustee to invest such 
portion of the Trust Funds as is not, in his judgment, required to meet 
current withdrawals. Such investments maj^ be made only in interest-
bearing obligations of the United States or in obligations guaranteed 
as to both principal and interest by the United States. For such pur-
pose such obligations may be acquired (1) on original issue at the issue 
price, or (2) by purchase of outstanding obligations at the market 
price. The purposes for which obligations of tne United States may 
be issued under the Second Liberty Bond Act, as amended, are hereby 
^^ ^^^' ^s^-
extended to authorize the issuance at par of public-debt obligation 
for purchase by the Trust Funds. Such obligations issued for pur-
chase by the Trust Funds shall have maturities fixed with due regard 
for the needs of the Trust Funds and shall bear interest at a rate equal 
to the average market yield (computed by the Managing Trustee on 
the basis of market quotations as of the end of the calendar month 
next preceding the date of such issue) on all marketable interest-
bearing obligations of the United States then forming a part of the 
public debt which are not due or callable until after the expiration of 
four years from the end of such calendar month; except that where 
such average market yield is not a multiple of one-eighth of 1 per 
centum, the rate of interest of such obligations shall be the multiple of 
one-eighth of 1 per centum nearest such market yield. The Manag-
ing Trustee may purchase other interest-bearing obligations of the 
United States or obligations guaranteed as to both principal and in-
terest by the United States, on original issue or at the market price, 
only where he determines that the purchase of such other obligations 
is in the public interest." 
(e) Section 201(e) of such Act is amended by striking out "special 
^^ "^^ *°** 
obligations" each place it appears and inserting in lieu thereof 
"public-debt obligations". 
(f) The amendments made by this section shall take effect on the 
first day of the first month beginning after the date of the enactment 
of this Act. 
SURVIVAL o r ACTIONS 
SEC. 702. (a) Section 205 (g) of the Social Security Act is amended 
^^ use 405. 
by adding at the end thereof the following new sentence: "Any action 
instituted in accordance with this subsection shall survive notwith-
standing any change in the person occupying the office of Secretary 
or any vacancy in such office.^' 
(b) The amendment made by subsection (a) shall apply to actions 
which are pending in court on the date of the enactment of this Act 
or are commenced after such date. 
48232 0-61-63 
99* 
PUBUC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
PERIODS OF LIMITATION ENDING ON NONWORK DAYS 
Ante. p. 968. 
§^0. 703. Sectioii 216 of the Social Security Act is amended by 
adding at the end thereof the following new subsection: 
"Periods of Limitation Ending on Nonwork Days 
"(j) Where this title, any provision of another law of the United 
States (other than the Internal Kevenue Code of 1954) relating to 
or changing the effect of this title, or any regulation issued by the 
Secretary pursuant thereto provides for a period within which an 
act is required to be done which affects eligibility for or the amount 
of any benefit or payment under this title or is necessary to establish 
or protect any rights under this title, and such period ends on a 
Saturday, Sunday, or legal holiday, or on any other day all or part 
of which is declared to be a nonwork day for Federal employees 
by statute or Executive order, then such act shall be considered as 
done within such period if it is done on the first day thereafter which 
is not a Saturday, Sunday, or legal holiday or any other day all or 
part of which is declared to be a nonwork day for Federal employees 
by statute or Executive order. 
For purposes of this subsection, the 
day on which a period ends shall include the day on which an ex-
tension of such period, as authorized by law or by the Secretary 
pursuant to law^, ends. The provisions of this subsection shall not 
extend the period during which benefits under this title may (pur-
suant to section 202(j)(l) or 223(b)) be paid for months prior to 
the day application for such benefits is filed, or during which an 
application for benefits under this title may (pursuant to section 
202(j) (2) or 223(b)) be accepted as such." 
42 u s e 401a. 
ADVISORY COUNCIL ON SOCIAL SECURITY 
FINANCING 
SEC. 704. (a) Section 116(e) of the Social Security Amendments 
of 1956 is amended to read as follows: 
"(e) During 1963, 1966, and every fifth year thereafter, the Sec-
retary shall appoint an Advisory Council on Social Security Financ-
ing, with the same functions, and constituted in the same manner, 
as prescribed in the preceding subsections of this section. 
Each 
such Council shall report its findings and recommendations, as pre-
scribed in subsection (d), not later than January 1 of the second 
year after the year in which it is appointed, after which date such 
Council shall cease to exist, and such report and recommendations 
shall be included in the annual report of the Board of Trustees 
to be submitted to the Congress not later than the March 1 following 
such January 1." 
(b) Section 116 of the Social Security Amendments of 1956 is 
further amended by adding at the end thereof the following new 
subsection: 
"(f) The Advisory Council appointed under subsection (e) during 
1963 shall, in addition to the other findings and recommendations it 
is required to make, include in its report its findings and recommenda-
tions with respect to extensions of the coverage of the old-age, sur-
vivors, and disability insurance program, the adequacy of benefits 
under the program, and all other aspects of the program." 
74 S T A T . ] 
PUBLIC LAW 8Q-778-SEPT. 13, 1960 
995 
MEDICAL CARE GUIDES AND REPORTS FOR PUBLIC ASSISTANCE AND MEDICAL 
ASSISTANCE FOR THE AGED 
SEC. 705. Title X I of the Social Security Act is amended by adding ^Vo. "
®
*
^
' ^^° ^' 
at the end thereof the following new section: 
" M E D I C A L CARE GUIDES AND REPORTS FOR PUBLIC ASSISTANCE AND MEDICAL 
ASSISTANCE FOR THE AGED 
" S E C 1112. In order to assist the States to extend the scope and 
content, and improve the quality, of medical care and medical services 
for which payments are made to or on behalf of needy and low-incorne 
individuals under this Act and in order to promote better public 
understanding about medical care and medical assistance for needy 
and low-income individuals, the Secretary shall develop and revise 
from time to time guides or recommended standards as to the level, 
content, and quality of medical care and medical services for the use 
of the States in evaluating and improving their public assistance 
medical care programs and their programs of medical assistance for 
the aged; shall secure periodic reports from the States on items in-
cluded in, and the quantity of, medical care and medical services for 
which expenditures under such programs are made; and shall from 
time to time publish data secured from these reports and other in-
formation necessary to carry out the purposes of this section." 
TEMPORARY EXTENSION OF CERTAIN SPECIAL PROVISIONS RELATING TO 
STATE PLANS FOR AID TO THE BLIND 
SEC. 706. Section 344(b) of the Social Security Act Amendments 
of 1950 is amended by striking out "June 30, 1961" and inserting in 
lieu thereof "June 30,1964". 
M A T E R N A L A N D CHILD WELFARE 
42 use 12 0 2a 
note. 
42 use 701. 
SEC. 707. (a) (1) (A) Section 501 of the Social Security Act is 
amended by striking out "for each fiscal year beginning after June 30, 
1958, the sum of $21,500,000" and inserting in lieu thereof "for each 
fiscal year beginning after June 30, 1960, the sum of $25,000,000". 
(B) Section 502(a) (2) of such Act is amended by striking out "for 
^^ ^^^ ^°2. 
each fiscal year beginning after June 30, 1958, the Secretary shall 
allot $10,750,000 as follows: He shall allot to each State $60,000 (even 
though the amount appropriated for such year is less than $21,500,-
000), and shall allot each State such part of the remainder of the 
$10,750,000" and inserting in lieu thereof "for each fiscal year begin-
ning after June 30, 1960, the Secretary shall allot $12,500,000 as fol-
lows: He shall allot to each State $70,000 (even though the amount 
appropriated for such year is less than $25,000,000), and shall allot 
each State such part of the remainder of the $12,500,000". 
(C) The first sentence of section 502(b) of such Act is amended 
by striking out "for each fiscal year beginning after June 30, 1958, 
the sum of $10,750,000" and inserting in lieu thereof "for each fiscal 
year beginning after June 30, 1960, the sum of $12,500,000". 
(2) (A) Section 511 of such Act is amended by striking out "for each 
^^ use 7ii. 
fiscal year beginning after June 30, 1958, the sum of $20,000,000" 
and inserting in lieu thereof "for each fiscal year beginning after 
June 30, 1960, the sum of $25,000,000". 
996 
PUBLIC LAW 86-778-SEPT. 13, 1960 
[74 STAT. 
42 use 712. 
^g^ Section 512(a)(2) of such Act is amended by striking out 
"for each fiscal year beginning after June 30,1958, the Secretary shall 
allot $10,000,000 as follows: He shall allot to each State $60,000 (even 
though the amount appropriated for such year is less than $20,000,000) 
and shall allot the remainder of the $10,000,000" and inserting in lieu 
thereof "for each fiscal year beginning after June 30,1960, the Secre-
tary shall allot $12,500,000 as follows: He shall allot to each State 
$70,000 (even though the amount appropriated for such year is less 
than $25,000,000) and shall allot the remainder of the $12,500,000". 
(C) The first sentence of section 512(b) of such Act is amended 
by striking out "for each fiscal year beginning after June 30, 1958, 
the sum of $10,000,000" and inserting in lieu thereof "for each fiscal 
year beginning after June 30, 1960, the sum of $12,500,000". 
42 use 721. 
(3^ (^^ Section 521 of such Act is amended by striking out "for 
each fiscal year, beginning with the fiscal j^ear ending June 30, 1959, 
the sum of $17,000,000" and inserting in lieu thereof "for each fiscal 
year, beginning with the fiscal year ending June 30, 1961, the sum 
of $25,000,000". 
42 use 722. 
^g^ Section 522(a) such Act is amended by striking out "such por-
tion of $60,000" and inserting in lieu thereof "$50,000 or, if greater, 
such portion of $70,000". 
42 use 702. 
(b) (1) (A) The second sentence of section 502(b) of such Act is 
amended by inserting "from time to time" after "shall be allotted", 
and by inserting before the period at the end thereof the following: 
"; except that not more than 25 per centum of such sums shall be avail-
able for grants to State health agencies (administering or supervising 
42 use 703. 
ii^Q administration of a State plan approved under section 503), and 
to public or other nonprofit institutions of higher learning (situated 
in any State), for special projects of regional or national significance 
which may contribute to the advancement of maternal and child 
health". 
42 use 704. 
^g^ Section 504(c) of such Act is amended by adding at the end 
thereof the following new sentence: "Payments of grants for special 
projects under section 502(b) may be made in advance or by way of 
reimbursement, and in such installments, as the Secretary may de-
termine ; and shall be made on such conditions as the Secretary finds 
necessary to carry out the purposes of the grants." 
42 use 712. 
(2) (A) The second sentence of section 512(b) of such Act is 
amended by inserting "from time to time" after "shall be allotted", 
and by inserting before the period at the end thereof the following: 
"; except that not more than 25 per centum of such sums shall be 
available for grants to State agencies (administering or supervising 
the administration of a State plan approved under section 513), and 
to public or other nonprofit institutions of higher learning (situated 
in any State), for special projects of regional or national significance 
which may contribute to the advancement of services for crippled 
children". 
(B) Section 514(c) of such Act is amended by adding at the end 
thereof the following new sentence: "Payments of grants for special 
projects under section 512(b) may be made in advance or by way of 
reimbursement, and in such installments, as the Secretary may deter-
mine; and shall be made on such conditions as the Secretary finds 
necessary to carry out the purposes of J;he grants." 
42 use 714. 
74 S T A T . ] 
PUBLIC LAW 86-778-SEPT. 13, 1960 
997 
(3) Part 3 of title V of such Act is amended by inserting at the 
end thereof the following new section: 
"RESEARCH OR DEMONSTRATION PROJECTS 
"SEC. 526. (a) There are hereby authorized to be appropriated for 
each fiscal year such sums as the Congress may determine for grants 
by the Secretary to public or other nonprofit institutions of higher 
learning, and to public or other nonprofit agencies and organizations 
engaged in research or child welfare activities, for special research or 
demonstration projects in the field of child welfare which are of re-
gional or national significance and for special projects for the demon-
stration of new methods or facilities which show promise of substan-
tial contribution to the advancement of child welfare. 
" (b) Payments of grants for special projects under this section may 
be made in advance or by way of reimbursement, and in such install-
ments, as the Secretary may determine; and shall be made on such 
conditions as the Secretary finds necessary to carry out the purposes 
of the grants." 
(c) The amendments made by this section shall be effective only 
with respect to fiscal years beginning after June 30,1960. 
AMENDMENT PRESERVING RELATIONSHIP BETWEEN RAILROAD RETIREMENT 
AND OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE 
SEC. 708. Section l(q) of the Eailroad Eetirement Act of 1937 is 
45 use 228a. 
amended by striking out "1958" and inserting in lieu thereof "1960". 
5) 
MEANING o r TERM "SECRETARY 
SEC. 709. As used in this Act and the provisions of the Social 
Security Act amended by this Act the term "Secretary", unless the 
context otherwise requires, means the Secretary of Health, Education, 
and Welfare. 
AID TO T H E BLIND 
SEC. 710. (a) Effective for the period beginning with the first day of 
the calendar quarter which begins after the date of enactment of this 
Act, and ending with the close of June 30,1962, clause (8) of section 
1002(a) of the Social Security Act is amended to read as follows: 
^^ ^^^ ^202. 
"(8) provide that the State agency shall, in determining need, take 
into consideration any other income and resources of the individual 
claiming aid to the blind; except that, in making such determination, 
the State agency shall disregard either (i) the first $50 per month 
of earned income, or (ii) the first $85 per month of earned income plus 
one-half of earned income in excess of $85 per month;". 
(b) Effective Julv 1, 1962, clause (8) of such section 1002(a) is 
amended to read as follows: "(8) provide that the State agency shall, 
in determining need, take into consideration any other income and 
resources of the individual claiming aid to the blind; except that, in 
making such determination, the State agency shall disregard the first 
$85 per month of earned income, plus one-half of earned income in 
excess of $85 per month;". 
Approved September 13, 1960.