An Act to provide that the excess of collections from the Federal unemployment tax over unemployment compensation administrative expenses shall be used to establish and maintain a $200 million reserve in the Federal unemployment account which will be available for advances to the States, to provide that the remainder of such excess shall be returned to the States, and for other purposes
PL 83-567 (H.R.5173), enacted 08/05/1954

PUBLIC LAW 567-AUG. 5, 1954 
[68 S T A T . 
Regulations. 
Cooperative pro-
grams. 
Repeals. 
33 u s e 701b. 
Exception. 
33 u s e 701b-l. 
Appropriations. 
Short title. 
days prior to transmission of the plan to the Congress through the 
President. 
The views and recommendations of the Secretary of the 
Interior, and the Secretary of the Army, if received by the Secretary of 
Agriculture prior to the expiration of the above sixty-day period, shall 
accompany the plan transmitted by the Secretary of Agriculture to 
the Congress through the President: Provided further^ That, prior to 
any Federal participation in the works of improvement under this 
Act, the President shall issue such rules and regulations as he deems 
necessary or desirable to carry out the purposes of this Act, and to 
assure the coordination of the work authorized under this Act and 
related work of other agencies including the Department of the 
Interior and the Department of the Army. 
SEC. 6. The Secretary is authorized in cooperation with other 
Federal and with States and local agencies to make investigations and 
surveys of the watersheds of rivers and other waterways as a basis 
for the development of coordinated programs. 
In areas where the 
programs of the Secretary of Agriculture may affect public or other 
lands under the jurisdiction of the Secretary of the Interior, the 
Secretary of the Interior is authorized to cooperate with the Secre-
tary of Agriculture in the planning and development of works or 
programs for such lands. 
SEC. 7. The provisions of the Act of June 22, 1936 (49 Stat. 1570), 
as amended and supplemented, conferring authority upon the Depart-
ment of Agriculture under the direction of the Secretary of Agricul-
ture to make preliminary examinations and surveys and to prosecute 
works of improvement for runoff and waterflow retardation and soil 
erosion prevention on the watersheds of rivers and other waterways 
are hereby repealed: Provided^ That (a) the authority of that Depart-
ment of Agriculture, under the direction of the Secretary, to prosecute 
the works of improvement for runoff and waterflow retardation and 
soil erosion prevention authorized to be carried out by the Department 
by the Act of December 22, 1944 (58 Stat. 887), as amended, and (b) 
the authority of the Secretary of Agriculture to undertake emergency 
measures for runoff retardation and soil erosion prevention author-
ized to be carried out by section 7 of the Act of June 28,1938 (52 Stat. 
1215), as amended by section 216 of the Act of May 17,1950 (64 Stat. 
163), shall not be affected by the provisions of this section. 
SEC. 8. There are hereby authorized to be appropriated such sums 
as may be necessary to carry out the purposes of this Act, such sums 
to remain available until expended. 
SEC. 9. This Act may be cited as the "Watershed Protection and 
Flood Prevention Act". 
Approved August 4, 1954. 
August 5, 1954 
[H. R. 5173] 
Public Law 567 
CHAPTER 657 
AN ACT 
To provide that the excess of collections from the Federal unemployment tax 
over employment security administrative expenses shall be used to establish 
and maintain a $200,000,000 reserve in the Federal unemployment account 
which will be available for advances to the States, to provide that the remain-
der of such excess shall be returned to the States, and for other purposes. 
E mp 1 o y m e n t 
Security Adminis-
trative 
Financing 
Act of 1954. 
49 Stat. 639. 
42 u s e 1101. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assenribled^ That this Act may 
be cited as the "Employment Security Administrative Financing Act 
of 1954". 
SEC. 2. So much of title I X of the Social Security Act as precedes 
section 904 thereof is hereby amended to read as follows: 
68 S T A T . ] 
PUBLIC LAW 567-AUG. 5, 1954 
669 
"TITLE IX—MISCELLANEOUS PROVISIONS 
RELATING 
TO EMPLOYMENT 
SECURITY 
"APPROPRIATIONS 
"SEC. 901. (a) (1) There are hereby appropriated to the Unemploy-
ment Trust Fund, out of any moneys in the Treasury not otherwise 
appropriated, for the fiscal year ending June 30, 1954, and for each 
fiscal year thereafter, an amount equal to the amount by which— 
"(A) 100 per centum of the tax (including interest, penalties, 
and additions to the tax) received during the fiscal year under 
the Federal Unemployment Tax Act and covered into the 
Treasury; exceeds 
"(B) the sum of (i) the employment security administrative 
expenditures for such year, (ii) the refunds of such tax (includ-
ing interest on such refunds) made during such fiscal year, and 
(iii) the amounts appropriated by section 1202 (b) for such fiscal 
year. 
"(2) The amount appropriated by paragraph (1) for any fiscal year 
shall be transferred from the general fund in the Treasury to the 
Unemployment Trust Fund at the close of such fiscal year. Each such 
transfer shall be based on estimates made by the Secretary of the 
Treasury as of the close of such fiscal year, but proper adjustment shall 
be made in the amount transferred at the close of the succeeding fiscal 
year to the extent that such estimates prove to be erroneous. The 
Secretary of the Treasury shall make his estimate of those employment 
security administrative expenditures for any fiscal year which are 
described in subsection (b) (1) only after consultation with the 
Secretary of Labor. 
"(b) For the purposes of subsection (a), the term 'employment 
security administrative expenditures' means, in the case of any fiscal 
year, the sum of— 
"(1) the aggregate of the amounts expended during the fiscal 
year for the purpose of assisting the States in (A) the administra-
tion of their unemployment compensation laws (including admin-
istration pursuant to agreements under title IV of the Veterans' 
Readjustment Assistance Act of 1952), (B) 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 , sec. 49-49n), 
and (C) carrying into effect section 602 of the Servicemen's Read-
justment Act of 1944, as amended; and 
"(2) the amount estimated by the Secretary of Labor as equal 
to the necessary expenses incurred during the fiscal year for the 
performance by the Department of Labor of its functions (except 
its functions with respect to Puerto Rico and the Virgin Islands) 
under (i) this title and titles I I I and X I I of this Act, (ii) the 
Federal Unemployment Tax Act, (iii) the provisions of the Act 
of June 6, 1933, as amended, (iv) title IV (except section 602) 
of the Servicemen's Readjustment Act of 1944, as amended, and 
(v) title IV of the Veterans' Readjustment Act of 1962; and 
"(3) the amount estimated by the Secretary of the Treasury as 
equal to the necessary expenses incurred during the fiscal year 
for the performance by the Department of the Treasury of its 
functions under this title and titles I I I and X I I of this Act and 
under the Federal Unemployment Tax Act. 
Unem p 1 o ym e nt 
Trust Fimd. 
53 Stat 
1396. 
26 u s e 1611 
1 8 3, 
"Emp1o y m e nt 
security adminis-
t r a t i v e expendi-
tures." 
66 Stat. 684. 
38 u s e 991-999. 
48 Stat. 113. 
39 u s e 338. 
58 Stat. 294. 
38 u s e 695b. 
" A M O U N T S CREDITED TO FEDERAL UNEMPLOYMENT ACCOUNT 
"SEC, 902. Whenever any amount is transferred to the Unemploy-
ment Trust Fund under section 901 (a), there shall be credited (as 
670 
PUBLIC LAW 567~AUG. 5, 1954 
[68 STAT. 
of the beginning of the succeeding fiscal year) to the Federal unem-
ployment account so much of such amount as equals whichever of the 
following is the lesser: 
"(1) The total amount so transferred; or 
"(2) The amount by which $200,000,000 exceeds the adjusted 
. •'-; -' [; 
balance in the Federal unemployment account at the close of the 
fiscal year for which the transfer is made. 
Adjusted b ai- jTor the purposes of the preceding sentence, the term 'adjusted balance' 
means the amount by which the balance in the Federal unemployment 
account exceeds the sum of the outstanding advances under section 
1202 (c) to the Federal unemployment account. 
"AMOUNTS CREDITED TO STATES' ACCOUNTS 
ance 
Post, p. 672. 
"SEC. 903. (a) So much of any amount transferred to the Unemploy-
ment Trust Fund at the close of any fiscal year under section 901 (a) 
as is not credited to the Federal unemployment account under section 
902 shall be credited (as of the beginning of the succeeding fiscal 
year) to the accounts of the States in the Unemployment Trust Fund. 
Each State's share of the funds to be credited under this subsection 
as of any July 1 shall be determined by the Secretary of Labor and 
certified by him to the Secretary of the Treasury on or before that 
date on the basis of reports furnished by the States to the Secretary 
o:^ Labor by June 1 and shall bear the same ratio to the total amount 
to be so credited as the amount of wages subject to contributions under 
such State unemployment compensation law during the preceding 
calendar year which have been reported to the State by May 1 bears 
to the total of wages subject to contributions under all State compen-
sation laws during such calendar year which have been reported to 
• , 
the States by such May 1. 
V ' 
"(b) If the Secretary of Labor finds that on July 1 of any fiscal 
42 use 503. 
"(1) a State is not eligible for certification under section 303, 
or 
"(2) the law of a State is not approvable under section 1603 of 
26 use 1603. 
the Federal Unemployment Tax Act, 
then the amount available for crediting to such State's account shall, 
in lieu of being so credited, be credited to the Federal unemployment 
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 
.jf.':: 
to the Secretary of the Treasury that such State is eligible for certifica-
tion under section 303, that the law of such State is approvable under 
such section 1603, 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 credit 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 unemploy-
ment account. 
"(c) (1) Amounts credited to the account of a State pursuant to 
subsection (a) shall, except as provided in paragraph (2), 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— 
68 S T A T . ] 
PUBLIC LAW 567-AUG. 5, 1954 
671 
" (A) the purposes and amounts were specified in the law making 
the appropriation, 
"(B) the appropriation law did not authorize the expenditure 
of such money after the close of the two-year period which began 
on the date of enactment of the appropriation law, 
"(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 so used during a fiscal year to an amount which does not 
exceed the amount by which (i) the aggregate of the amounts 
credited to the account of such State pursuant to subsection (a) 
during such fiscal year and the four preceding fiscal years, exceeds 
(ii) the aggregate of the amounts used by the State pursuant to 
this paragraph and charged against the amounts credited to the 
account of such State during any of such five fiscal years. 
For the purposes of subparagraph (D), amounts used by a State 
during any nscal year shall be charged against equivalent amounts 
which were first credited and which have not previously been so 
charged; except that no amount used during any fiscal year may be 
charged against any amount credited during a fiscal year earlier 
than the fourth preceding fiscal year." 
SEC. 3. Title X I I of the Social Security Act is hereby amended to 
read as follows: 
58 Stat. 790. 
42 use 1321. 
"TITLE XII—ADVANCES TO STATE UNEMPLOYMENT 
FUNDS 
"SEC. 1201. (a) If— 
"(1) the balance in the unemployment fund of a State in the 
Unemployment Trust Fund at the close of September 30, 1953, or 
at the close of the last day in any ensuing calendar quarter, is 
less than the total compensation paid out under the unemploy-
ment compensation law of such State during the twelve-month 
period ending at the close of such day; 
"(2) the Governor of such State applies to the Secretary of 
Labor during the calendar quarter following such day for an 
advance under this subsection; and 
"(3) the Secretary of Labor finds that the conditions specified 
in paragraphs (1) and (2) have been met, 
the Secretary of Labor shall certify to the Secretary of the Treasury 
such amounts as may be specified in the application of the Governor, 
but the aggregate of the amounts so certified pursuant to any such 
application shall not exceed the highest total compensation paid 
out under the unemployment compensation law of such State during 
any one of the four calendar quarters preceding the quarter in which 
such application was made. For the purposes of this subsection, (A) 
the application 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, and (B) tlie term 'compensation' means 
cash benefits payable to individuals with respect to their unemploy-
ment, exclusive of expenses 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 any State in the Unemploy-
ment Trust Fund the amounts 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 such transfer which 
is not restricted as to use pursuant to section 1)03 (b)). Any amount 
El i g i b i 1 i ty re-
quirement s. 
Certification. 
Application. 
T r a n 
funds. 
f e r of 
Ante, p. 670. 
672 
PUBLIC LAW 567-AUG. 5, 1954 
[68 S T A T . 
Repayments. 
^propriations. 
26 u s e 1611. 
Infra, 
Advances. 
26 u s e 1601(c). 
Ante, p. 671. 
26 use 1600. 
S
O transferred shall be an advance which shall be repaid (without 
interest) by the State to the Federal unemployment account in the 
manner provided in subsections (a) and (b) (1) of section 1202. 
"SEC. 1202. (a) The Governor of any State may at any time request 
that funds be transferred from the account of such State to the Federal 
unemployment account in repayment of part or all of any remaining 
balance of advances made to such State under section 1201. The Secre-
tary of Labor shall certify to the Secretary of the Treasury the amount 
stated in such request; and the Secretary of the Treasury shall 
promptly transfer such amount. 
"(b) (1) There are hereby appropriated to the Unemployment 
Trust Fund for credit to the Federal unemployment account, out of 
any moneys in the Treasury not otherwise appropriated, amounts equal 
to the amounts by which (A) 100 per centum of the additional tax 
received under the Federal I^nemployment Tax Act by reason of the 
reduced credits provisions of section 1601 (c) (2) of such Act and 
covered into the Treasury, exceeds (B) the amounts appropriated by 
paragraph (2). Any amount so appropriated shall be credited against, 
and shall operate to reduce, the remaining balance of advances under 
section 1201 to the State with respect to which employers paid such 
additional tax. 
"(2) Whenever the amount of such additional tax paid, received, 
and covered into the Treasury exceeds the remaining balance of 
advances under section 1201 to the State, there is hereby appropriated 
to the Unemployment Trust Fund for credit to the account of such 
State, out of any moneys in the Treasury not otherwise appropriated, 
an amount equal to such excess. 
"(o) The amounts appropriated by paragraphs (1) and (2) shall 
be transferred at the close of the month in which the moneys were 
covered into the Treasury to the Unemployment Trust Fund for credit 
to the Federal unemployment account or to the account of the State, 
as the case may be, as of the first day of the succeeding month. 
"(c) There are hereby authorized to be appropriated to the Federal 
unemployment account, as repayable advances (without interest), 
such sums as may be necessary to carry out the purposes of this title. 
"SEC. 1203. When used in this title, the term 'Governor' shall 
include the Commissioners of the District of Columbia." 
SEC. 4. Section 1601 (c) of the Internal Revenue Code (Federal 
Unemployment Tax Act) is hereby amended to read as follows: 
"(c) LIMIT ON TOTAL CREDITS.— 
"(1) The total credits allowed to a taxpayer under this section 
shall not exceed 90 per centum 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 
Security Act, and if any balance of such advance or advances 
has not been returned to the Federal unemployment account as 
provided in that title before December 1 of the taxable year, then 
the total credits (after other reductions under this section) other-
wise allowable under this section for such 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 beginning with the 
fourth consecutive January 1 on which such a balance of 
unreturned advances existed, by 5 per centum of the tax 
imposed by section 1600 with respect to the wages paid by 
such taxpayer during such taxable year which are attributable 
to such State; and 
68 
S T A T . ] 
PUBLIC LAW 567-AUG. 5, 1954 
673 
"(B) in the case of any succeeding taxable year beginning 
with a consecutive January 1 on which such a balance of 
unreturned advances existed, by an additional 5 per centum, 
for each such succeeding taxable year, of the tax imposed 
by section 1600 with respect to the wages paid by such 
taxpayer during such taxable year which are attributable 
to such State. 
For the purposes of this paragraph, wages shall be attributable to 
a particular State if they are subject to the unemployment com-
pensation law of the State, or (if not subject to the unemployment 
compensation law of any State) if they are determined (under 
rules or regulations prescribed by the Secretary) to be attributable 
to such State." 
SEC. 5. (a) (1) Section 303 (a) (5) of the Social Security Act is 
hereby amended by striking out the semicolon and insertinjr in lieu 
thereof a colon and the following: ''''Provided further^ That the 
amounts specified by section 903 (c) (2) may, subject to the conditions 
prescribed in such section, be used for expenses incurred by the State 
for administration of its unemployment compensation law and public 
employment offices;". 
(2) Section 1603 (a) (4) of the Internal Kevenue Code is hereby 
amended by striking out the semicolon and inserting in lieu thereof 
a colon and the following: '•'• 
Provided further^ That the amounts speci-
fied by section 903 (c) (2) of the Social Security Act may, subject to 
the conditions prescribed in such section, be used for expenses incurred 
by the State for administration of its unemployment compensation 
law and public employment offices;". 
(3) Section 1607 (f) of the Internal Revenue Code is hereby 
amended by striking out the period at the end thereof and inserting 
in lieu thereof a colon and the following: '•''Provided further^ That the 
amounts specified by section 903 (c) (2) of the Social Security Act 
may, subject to the conditions prescribed in such section, be used for 
expenses incurred by the State for administration of its unemploy-
ment compensation law and public employment offices.". 
(b) Section 904 (a) of the Social Security Act is hereby amended 
by striking out "or deposited pursuant to appropriations to the Federal 
unemployment account" and inserting in lieu thereof ", or otherwise 
deposited in or credited to the Fund or any account therein". 
(c) Section 904 (b) of the Social Security Act is hereby amended 
by adding at the end thereof the following new sentence: "Advances 
to the Federal unemployment account pursuant to section 1202 (c) 
shall not be invested." 
(d) Section 904 (e) of the Social Security Act is hereby amended 
by adding at the end thereof the following new sentence: "For the pur-
poses 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 aggregate of the 
outstanding advances under section 1201 from the Federal unem-
ployment account, 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 (l),and (B) by subtracting from the 
sum so obtained the aggregate of the outstanding advances from 
the Treasury to the account pursuant to section 1202 (c)." 
(e) Section 904 (g) of the Social Security Act is hereby repealed. 
(f) (1) Clause (2) of the second sentence of section 904 (h) of the 
Social Security Act is hereby amended to read as follows: "(2) the 
excess of taxes collected under the Federal Unemployment Tax Act 
Wages. 
60 Stat. 991. 
42 u s e 
503(a) 
(5). 
Ante, p. 670. 
26 u s e 
1603 
(a)(4). 
Ante, p. 670. 
26 u s e 1607(f). 
Ante, p. 670. 
58 Stat. 789. 
42 u s e 1104(a). 
49 Stat. 641. 
42 u s e 1104(b). 
Ante, p. 672. 
42 u s e 1104(e). 
Ante, p. 671. 
Ante, p. 672. 
Repeal. 
42 use 1104(g). 
61 Stat. 794; 64 
Stat. 560. 
42 u s e 1104(h). 
39777 O—55—pt. 1-
-45 
674 
PUBLIC LAW 568-AUG. 5, 1954 
[68 S T A T . 
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". 
(2) The third sentence of such section 904 (h) is hereby repealed. 
Approved August 5, 1954. 
August 5, 1 954 
[H. R. 303] 
Public Law 568 
CHAPTER 658 
AN ACT 
To transfer the maintenance and operation of liospital and health facilities for 
Indians to the Public Health Service, and for other purposes. 
Indian hospitals. 
Transfer to Pub-
lic Health Service. 
Restriction. 
HEW transfer to 
state or p r i v a t e 
institutions. 
Condition. 
Restriction. 
Failure to meet 
requirements. 
HEW 
r e g u l a -
tions. 
Personnel, etc. 
Be it enacted hy the Senate and House of Rep^'esentatives of the 
United States of AmeHca in Congress assembled^ That all functions, 
responsibilities, authorities, and duties of the Department of the 
Interior, the Bureau of Indian Affairs, Secretary of the Interior, 
and the Commissioner of Indian Affairs relating to the maintenance 
and operation of hospital and health facilities for Indians, and the 
conservation of the health of Indians, are hereby transferred to, and 
shall be administered by, the Surgeon General of the United States 
Public Health Service, under the supervision and direction of the 
Secretary of Health, Education, and Welfare: Provided^ That hos-
pitals now in operation for a specific tribe or tribes of Indians shall 
not be closed prior to July 1,1956, without the consent of the govern-
ing body of the tribe or its organized council. 
SEC. 2. Whenever the health needs of the Indians can be better met 
thereby, the Secretary of Health, Education, and Welfare is author-
ized in his discretion to enter into contracts with any State, Territory, 
or political subdivision thereof, or any private nonprofit corporation, 
agency or institution providing for the transfer by the United States 
Public Health Service of Indian hospitals or health facilities, includ-
ing initial operating equipment and supplies. 
It shall be a condition of such transfer that all facilities transferred 
shall be available to meet the health needs of the Indians and that 
such health needs shall be given priority over those of the non-Indian 
population. No hospital or health facility that has been constructed 
or maintained for a specific tribe of Indians, or for a specific group 
of tribes, shall be transferred by the Secretary of Health, Education, 
and Welfare to a non-Indian entity or organization under this Act 
unless such action has been approved by the governing body of the 
tribe, or by the governing bodies of a majority of the tribes, for which 
such .hospital or health facility has been constructed or maintained: 
Provided^ That if, following such transfer by the United States 
Public Health Service, the Secretary of Health, Education, and Wel-
fare finds the hospital or health facility transferred under this section 
is not thereafter serving the need of the Indians, the Secretary of 
Health, Education, and Welfare shall notify those charged w'ith man-
agement thereof, setting forth needed improvements, and in the event 
such improvements are not made within a time to be specified, shall 
immediately assume management and operation of such hospital or 
health facility. 
SEC. 3. The Secretary of Health, Education, and Welfare is also 
authorized to make such other regulations as he deems desirable to 
carry out the provisions of this Act. 
SEC. 4. The personnel, property, records, and unexpended balances 
of appropriations, allocations, and other funds (available or to be 
made available), which the Director of the Bureau of the Budget 
shall determine to relate primarily to the functions transferred to the