42 U.S.C. § 401 : US Code - Section 401: Trust Funds

Search 42 U.S.C. § 401 : US Code - Section 401: Trust Funds

(a) Federal Old-Age and Survivors Insurance Trust Fund
There is hereby created on the books of the Treasury of the
United States a trust fund to be known as the "Federal Old-Age and
Survivors Insurance Trust Fund". The Federal Old-Age and Survivors
Insurance Trust Fund shall consist of the securities held by the
Secretary of the Treasury for the Old-Age Reserve Account and the
amount standing to the credit of the Old-Age Reserve Account on the
books of the Treasury on January 1, 1940, which securities and
amount the Secretary of the Treasury is authorized and directed to
transfer to the Federal Old-Age and Survivors Insurance Trust Fund,
and, in addition, such gifts and bequests as may be made as
provided in subsection (i)(1) of this section, and such amounts as
may be appropriated to, or deposited in, the Federal Old-Age and
Survivors Insurance Trust Fund as hereinafter provided. There is
hereby appropriated to the Federal Old-Age and Survivors Insurance
Trust Fund for the fiscal year ending June 30, 1941, and for each
fiscal year thereafter, out of any moneys in the Treasury not
otherwise appropriated, amounts equivalent to 100 per centum of -
(1) the taxes (including interest, penalties, and additions to
the taxes) received under subchapter A of chapter 9 of the
Internal Revenue Code of 1939 (and covered into the Treasury)
which are deposited into the Treasury by collectors of internal
revenue before January 1, 1951; and
(2) the taxes certified each month by the Commissioner of
Internal Revenue as taxes received under subchapter A of chapter
9 of such Code which are deposited into the Treasury by
collectors of internal revenue after December 31, 1950, and
before January 1, 1953, with respect to assessments of such taxes
made before January 1, 1951; and
(3) the taxes imposed by subchapter A of chapter 9 of such Code
with respect to wages (as defined in section 1426 of such Code),
and by chapter 21 (other than sections 3101(b) and 3111(b)) of
the Internal Revenue Code of 1954 with respect to wages (as
defined in section 3121 of such Code) reported to the
Commissioner of Internal Revenue pursuant to section 1420(c) of
the Internal Revenue Code of 1939 after December 31, 1950, or to
the Secretary of the Treasury or his delegates pursuant to
subtitle F of the Internal Revenue Code of 1954 after December
31, 1954, as determined by the Secretary of the Treasury by
applying the applicable rates of tax under such subchapter or
chapter 21 (other than sections 3101(b) and 3111(b)) to such
wages, which wages shall be certified by the Commissioner of
Social Security on the basis of the records of wages established
and maintained by such Commissioner in accordance with such
reports, less the amounts specified in clause (1) of subsection
(b) of this section; and
(4) the taxes imposed by subchapter E of chapter 1 of the
Internal Revenue Code of 1939, with respect to self-employment
income (as defined in section 481 of such Code), and by chapter 2
(other than section 1401(b)) of the Internal Revenue Code of 1954
with respect to self-employment income (as defined in section
1402 of such Code) reported to the Commissioner of Internal
Revenue on tax returns under such subchapter or to the Secretary
of the Treasury or his delegate on tax returns under subtitle F
of such Code, as determined by the Secretary of the Treasury by
applying the applicable rate of tax under such subchapter or
chapter (other than section 1401(b)) to such self-employment
income, which self-employment income shall be certified by the
Commissioner of Social Security on the basis of the records of
self-employment income established and maintained by the
Commissioner of Social Security in accordance with such returns,
less the amounts specified in clause (2) of subsection (b) of
this section.
The amounts appropriated by clauses (3) and (4) of this subsection
shall be transferred from time to time from the general fund in the
Treasury to the Federal Old-Age and Survivors Insurance Trust Fund,
and the amounts appropriated by clauses (1) and (2) of subsection
(b) of this section shall be transferred from time to time from the
general fund in the Treasury to the Federal Disability Insurance
Trust Fund, such amounts to be determined on the basis of estimates
by the Secretary of the Treasury of the taxes, specified in clauses
(3) and (4) of this subsection, paid to or deposited into the
Treasury; and proper adjustments shall be made in amounts
subsequently transferred to the extent prior estimates were in
excess of or were less than the taxes specified in such clauses (3)
and (4) of this subsection. All amounts transferred to either Trust
Fund under the preceding sentence shall be invested by the Managing
Trustee in the same manner and to the same extent as the other
assets of such Trust Fund. Notwithstanding the preceding sentence,
in any case in which the Secretary of the Treasury determines that
the assets of either such Trust Fund would otherwise be inadequate
to meet such Fund's obligations for any month, the Secretary of the
Treasury shall transfer to such Trust Fund on the first day of such
month the amount which would have been transferred to such Fund
under this section as in effect on October 1, 1990; and such Trust
Fund shall pay interest to the general fund on the amount so
transferred on the first day of any month at a rate (calculated on
a daily basis, and applied against the difference between the
amount so transferred on such first day and the amount which would
have been transferred to the Trust Fund up to that day under the
procedures in effect on January 1, 1983) equal to the rate earned
by the investments of such Fund in the same month under subsection
(d) of this section.
(b) Federal Disability Insurance Trust Fund
There is hereby created on the books of the Treasury of the
United States a trust fund to be known as the "Federal Disability
Insurance Trust Fund". The Federal Disability Insurance Trust Fund
shall consist of such gifts and bequests as may be made as provided
in subsection (i)(1) of this section, and such amounts as may be
appropriated to, or deposited in, such fund as provided in this
section. There is hereby appropriated to the Federal Disability
Insurance Trust Fund for the fiscal year ending June 30, 1957, and
for each fiscal year thereafter, out of any moneys in the Treasury
not otherwise appropriated, amounts equivalent to 100 per centum of
-
(1)(A) 1/2 of 1 per centum of the wages (as defined in
section 3121 of the Internal Revenue Code of 1954) paid after
December 31, 1956, and before January 1, 1966, and reported to
the Secretary of the Treasury or his delegate pursuant to
subtitle F of the Internal Revenue Code of 1954, (B) 0.70 of 1
per centum of the wages (as so defined) paid after December 31,
1965, and before January 1, 1968, and so reported, (C) 0.95 of 1
per centum of the wages (as so defined) paid after December 31,
1967, and before January 1, 1970, and so reported, (D) 1.10 per
centum of the wages (as so defined) paid after December 31, 1969,
and before January 1, 1973, and so reported, (E) 1.1 per centum
of the wages (as so defined) paid after December 31, 1972, and
before January 1, 1974, and so reported, (F) 1.15 per centum of
the wages (as so defined) paid after December 31, 1973, and
before January 1, 1978, and so reported, (G) 1.55 per centum of
the wages (as so defined) paid after December 31, 1977, and
before January 1, 1979, and so reported, (H) 1.50 per centum of
the wages (as so defined) paid after December 31, 1978, and
before January 1, 1980, and so reported, (I) 1.12 per centum of
the wages (as so defined) paid after December 31, 1979, and
before January 1, 1981, and so reported, (J) 1.30 per centum of
the wages (as so defined) paid after December 31, 1980, and
before January 1, 1982, and so reported, (K) 1.65 per centum of
the wages (as so defined) paid after December 31, 1981, and
before January 1, 1983, and so reported, (L) 1.25 per centum of
the wages (as so defined) paid after December 31, 1982, and
before January 1, 1984, and so reported, (M) 1.00 per centum of
the wages (as so defined) paid after December 31, 1983, and
before January 1, 1988, and so reported, (N) 1.06 per centum of
the wages (as so defined) paid after December 31, 1987, and
before January 1, 1990, and so reported, (O) 1.20 per centum of
the wages (as so defined) paid after December 31, 1989, and
before January 1, 1994, and so reported, (P) 1.88 per centum of
the wages (as so defined) paid after December 31, 1993, and
before January 1, 1997, and so reported, (Q) 1.70 per centum of
the wages (as so defined) paid after December 31, 1996, and
before January 1, 2000, and so reported, and (R) 1.80 per centum
of the wages (as so defined) paid after December 31, 1999, and so
reported, which wages shall be certified by the Commissioner of
Social Security on the basis of the records of wages established
and maintained by such Commissioner in accordance with such
reports; and
(2)(A) 3/8 of 1 per centum of the amount of self-employment
income (as defined in section 1402 of the Internal Revenue Code
of 1954) reported to the Secretary of the Treasury or his
delegate on tax returns under subtitle F of the Internal Revenue
Code of 1954 for any taxable year beginning after December 31,
1956, and before January 1, 1966, (B) 0.525 of 1 per centum of
the amount of self-employment income (as so defined) so reported
for any taxable year beginning after December 31, 1965, and
before January 1, 1968, (C) 0.7125 of 1 per centum of the amount
of self-employment income (as so defined) so reported for any
taxable year beginning after December 31, 1967, and before
January 1, 1970, (D) 0.825 of 1 per centum of the amount of self-
employment income (as so defined) so reported for any taxable
year beginning after December 31, 1969, and before January 1,
1973, (E) 0.795 of 1 per centum of the amount of self-employment
income (as so defined) so reported for any taxable year beginning
after December 31, 1972, and before January 1, 1974, (F) 0.815 of
1 per centum of the amount of self-employment income (as so
defined) as reported for any taxable year beginning after
December 31, 1973, and before January 1, 1978, (G) 1.090 per
centum of the amount of self-employment income (as so defined) so
reported for any taxable year beginning after December 31, 1977,
and before January 1, 1979, (H) 1.0400 per centum of the amount
of self-employment income (as so defined) so reported for any
taxable year beginning after December 31, 1978, and before
January 1, 1980, (I) 0.7775 per centum of the amount of self-
employment income (as so defined) so reported for any taxable
year beginning after December 31, 1979, and before January 1,
1981, (J) 0.9750 per centum of the amount of self-employment
income (as so defined) so reported for any taxable year beginning
after December 31, 1980, and before January 1, 1982, (K) 1.2375
per centum of the amount of self-employment income (as so
defined) so reported for any taxable year beginning after
December 31, 1981, and before January 1, 1983, (L) 0.9375 per
centum of the amount of self-employment income (as so defined) so
reported for any taxable year beginning after December 31, 1982,
and before January 1, 1984, (M) 1.00 per centum of the amount of
self-employment income (as so defined) so reported for any
taxable year beginning after December 31, 1983, and before
January 1, 1988, (N) 1.06 per centum of the self-employment
income (as so defined) so reported for any taxable year beginning
after December 31, 1987, and before January 1, 1990, (O) 1.20 per
centum of the amount of self-employment income (as so defined) so
reported for any taxable year beginning after December 31, 1989,
and before January 1, 1994, (P) 1.88 per centum of the amount of
self-employment income (as so defined) so reported for any
taxable year beginning after December 31, 1993, and before
January 1, 1997, (Q) 1.70 per centum of the amount of self-
employment income (as so defined) so reported for any taxable
year beginning after December 31, 1996, and before January 1,
2000, and (R) 1.80 per centum of the amount of self-employment
income (as so defined) so reported for any taxable year beginning
after December 31, 1999, which self-employment income shall be
certified by the Commissioner of Social Security on the basis of
the records of self-employment income established and maintained
by the Commissioner of Social Security in accordance with such
returns.
(c) Board of Trustees; duties; reports to Congress
With respect to the Federal Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance Trust Fund (hereinafter
in this subchapter called the "Trust Funds") there is hereby
created a body to be known as the Board of Trustees of the Trust
Funds (hereinafter in this subchapter called the "Board of
Trustees") which Board of Trustees shall be composed of the
Commissioner of Social Security, the Secretary of the Treasury, the
Secretary of Labor, and the Secretary of Health and Human Services,
all ex officio, and of two members of the public (both of whom may
not be from the same political party), who shall be nominated by
the President for a term of four years and subject to confirmation
by the Senate. A member of the Board of Trustees serving as a
member of the public and nominated and confirmed to fill a vacancy
occurring during a term shall be nominated and confirmed only for
the remainder of such term. An individual nominated and confirmed
as a member of the public may serve in such position after the
expiration of such member's term until the earlier of the time at
which the member's successor takes office or the time at which a
report of the Board is first issued under paragraph (2) after the
expiration of the member's term. The Secretary of the Treasury
shall be the Managing Trustee of the Board of Trustees (hereinafter
in this subchapter called the "Managing Trustee"). The Deputy
Commissioner of Social Security shall serve as Secretary of the
Board of Trustees. The Board of Trustees shall meet not less
frequently than once each calendar year. It shall be the duty of
the Board of Trustees to -
(1) Hold the Trust Funds;
(2) Report to the Congress not later than the first day of
April of each year on the operation and status of the Trust Funds
during the preceding fiscal year and on their expected operation
and status during the next ensuing five fiscal years;
(3) Report 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;
(4) Recommend improvements in administrative procedures and
policies designed to effectuate the proper coordination of the
old-age and survivors insurance and Federal-State unemployment
compensation program; and
(5) Review 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.
The report provided for in paragraph (2) of this subsection shall
include a statement of the assets of, and the disbursements made
from, the Trust Funds during the preceding fiscal year, an estimate
of the expected future income to, and disbursements to be made
from, the Trust Funds during each of the next ensuing five fiscal
years, and a statement of the actuarial status of the Trust Funds.
Such statement shall include a finding by the Board of Trustees as
to whether the Federal Old-Age and Survivors Insurance Trust Fund
and the Federal Disability Insurance Trust Fund, individually and
collectively, are in close actuarial balance (as defined by the
Board of Trustees). Such report shall include an actuarial opinion
by the Chief Actuary of the Social Security Administration
certifying that the techniques and methodologies used are generally
accepted within the actuarial profession and that the assumptions
and cost estimates used are reasonable. Such report shall also
include an actuarial analysis of the benefit disbursements made
from the Federal Old-Age and Survivors Insurance Trust Fund with
respect to disabled beneficiaries. Such report shall be printed as
a House document of the session of the Congress to which the report
is made. A person serving on the Board of Trustees shall not be
considered to be a fiduciary and shall not be personally liable for
actions taken in such capacity with respect to the Trust Funds.
(d) Investments
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 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 States may be issued under chapter 31 of title 31 are
hereby extended to authorize the issuance at par of public-debt
obligations for purchase by the Trust Funds. Such obligations
issued for purchase 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. Each obligation issued for
purchase by the Trust Funds under this subsection shall be
evidenced by a paper instrument in the form of a bond, note, or
certificate of indebtedness issued by the Secretary of the Treasury
setting forth the principal amount, date of maturity, and interest
rate of the obligation, and stating on its face that the obligation
shall be incontestable in the hands of the Trust Fund to which it
is issued, that the obligation is supported by the full faith and
credit of the United States, and that the United States is pledged
to the payment of the obligation with respect to both principal and
interest. The Managing Trustee may purchase other interest-bearing
obligations of the United States or obligations guaranteed as to
both principal and interest 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) Sale of acquired obligations
Any obligations acquired by the Trust Funds (except public-debt
obligations issued exclusively to the Trust Funds) may be sold by
the Managing Trustee at the market price, and such public-debt
obligations may be redeemed at par plus accrued interest.
(f) Proceeds from sale or redemption of obligations; interest
The interest on, and the proceeds from the sale or redemption of,
any obligations held in the Federal Old-Age and Survivors Insurance
Trust Fund and the Federal Disability Insurance Trust Fund shall be
credited to and form a part of the Federal Old-Age and Survivors
Insurance Trust Fund and the Disability Insurance Trust Fund,
respectively. Payment from the general fund of the Treasury to
either of the Trust Funds of any such interest or proceeds shall be
in the form of paper checks drawn on such general fund to the order
of such Trust Fund.
(g) Payments into Treasury
(1)(A) The Managing Trustee of the Trust Funds (which for
purposes of this paragraph shall include also the Federal Hospital
Insurance Trust Fund and the Federal Supplementary Medical
Insurance Trust Fund established by subchapter XVIII of this
chapter) is directed to pay from the Trust Funds into the Treasury -

(i) (!1) the amounts estimated by the Managing Trustee, the
Commissioner of Social Security, and the Secretary of Health and
Human Services which will be expended, out of moneys appropriated
from the general fund in the Treasury, during a three-month
period by the Department of Health and Human Services for the
administration of subchapter XVIII of this chapter, and by the
Department of the Treasury for the administration of subchapters
II and XVIII of this chapter and chapters 2 and 21 of the
Internal Revenue Code of 1986, less
(ii) (!1) the amounts estimated (pursuant to the applicable
method prescribed under paragraph (4) of this subsection) by the
Commissioner of Social Security which will be expended, out of
moneys made available for expenditures from the Trust Funds,
during such three-month period to cover the cost of carrying out
the functions of the Social Security Administration, specified in
section 432 of this title, which relate to the administration of
provisions of the Internal Revenue Code of 1986 other than those
referred to in clause (i) and the functions of the Social
Security Administration in connection with the withholding of
taxes from benefits, as described in section 407(c) of this
title, pursuant to requests by persons entitled to such benefits
or such persons' representative payee.
Such payments shall be carried into the Treasury as the net amount
of repayments due the general fund account for reimbursement of
expenses incurred in connection with the administration of
subchapters II and XVIII of this chapter and chapters 2 and 21 of
the Internal Revenue Code of 1986. A final accounting of such
payments for any fiscal year shall be made at the earliest
practicable date after the close thereof. There are hereby
authorized to be made available for expenditure, out of any or all
of the Trust Funds, such amounts as the Congress may deem
appropriate to pay the costs of the part of the administration of
this subchapter, subchapter VIII of this chapter, subchapter XVI of
this chapter, and subchapter XVIII of this chapter for which the
Commissioner of Social Security is responsible, the costs of
subchapter XVIII of this chapter for which the Secretary of Health
and Human Services is responsible, and the costs of carrying out
the functions of the Social Security Administration, specified in
section 432 of this title, which relate to the administration of
provisions of the Internal Revenue Code of 1986 other than those
referred to in clause (i) of the first sentence of this
subparagraph and the functions of the Social Security
Administration in connection with the withholding of taxes from
benefits, as described in section 407(c) of this title, pursuant to
requests by persons entitled to such benefits or such persons'
representative payee. Of the amounts authorized to be made
available out of the Federal Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance Trust Fund under the
preceding sentence, there are hereby authorized to be made
available from either or both of such Trust Funds for continuing
disability reviews -
(i) (!1) for fiscal year 1996, $260,000,000;
(ii) (!1) for fiscal year 1997, $360,000,000;
(iii) for fiscal year 1998, $570,000,000;
(iv) for fiscal year 1999, $720,000,000;
(v) for fiscal year 2000, $720,000,000;
(vi) for fiscal year 2001, $720,000,000; and
(viii) (!2) for fiscal year 2002, $720,000,000.
For purposes of this subparagraph, the term "continuing disability
review" means a review conducted pursuant to section 421(i) of this
title and a review or disability eligibility redetermination
conducted to determine the continuing disability and eligibility of
a recipient of benefits under the supplemental security income
program under subchapter XVI of this chapter, including any review
or redetermination conducted pursuant to section 207 or 208 of the
Social Security Independence and Program Improvements Act of 1994
(Public Law 103-296).
(B) After the close of each fiscal year -
(i) the Commissioner of Social Security shall determine -
(I) the portion of the costs, incurred during such fiscal
year, of administration of this subchapter, subchapter VIII of
this chapter, subchapter XVI of this chapter, and subchapter
XVIII of this chapter for which the Commissioner is responsible
and of carrying out the functions of the Social Security
Administration, specified in section 432 of this title, which
relate to the administration of provisions of the Internal
Revenue Code of 1986 (other than those referred to in clause
(i) of the first sentence of subparagraph (A)) and the
functions of the Social Security Administration in connection
with the withholding of taxes from benefits, as described in
section 407(c) of this title, pursuant to requests by persons
entitled to such benefits or such persons' representative
payee, which should have been borne by the general fund of the
Treasury,
(II) the portion of such costs which should have been borne
by the Federal Old-Age and Survivors Insurance Trust Fund,
(III) the portion of such costs which should have been borne
by the Federal Disability Insurance Trust Fund,
(IV) the portion of such costs which should have been borne
by the Federal Hospital Insurance Trust Fund, and
(V) the portion of such costs which should have been borne by
the Federal Supplementary Medical Insurance Trust Fund (and, of
such portion, the portion of such costs which should have been
borne by the Medicare Prescription Drug Account in such Trust
Fund), and
(ii) the Secretary of Health and Human Services shall determine
-
(I) the portion of the costs, incurred during such fiscal
year, of the administration of subchapter XVIII of this chapter
for which the Secretary is responsible, which should have been
borne by the general fund of the Treasury,
(II) the portion of such costs which should have been borne
by the Federal Hospital Insurance Trust Fund, and
(III) the portion of such costs which should have been borne
by the Federal Supplementary Medical Insurance Trust Fund (and,
of such portion, the portion of such costs which should have
been borne by the Medicare Prescription Drug Account in such
Trust Fund).
(C) After the determinations under subparagraph (B) have been
made for any fiscal year, the Commisioner (!3) of Social Security
and the Secretary shall each certify to the Managing Trustee the
amounts, if any, which should be transferred from one to any of the
other such Trust Funds and the amounts, if any, which should be
transferred between the Trust Funds (or one of the Trust Funds) and
the general fund of the Treasury, in order to ensure that each of
the Trust Funds and the general fund of the Treasury have borne
their proper share of the costs, incurred during such fiscal year,
for -
(i) the parts of the administration of this subchapter,
subchapter VIII of this chapter, subchapter XVI of this chapter,
and subchapter XVIII of this chapter for which the Commissioner
of Social Security is responsible,
(ii) the parts of the administration of subchapter XVIII of
this chapter for which the Secretary is responsible, and
(iii) carrying out the functions of the Social Security
Administration, specified in section 432 of this title, which
relate to the administration of provisions of the Internal
Revenue Code of 1986 (other than those referred to in clause (i)
of the first sentence of subparagraph (A)) and the functions of
the Social Security Administration in connection with the
withholding of taxes from benefits, as described in section
407(c) of this title, pursuant to requests by persons entitled to
such benefits or such persons' representative payee.
The Managing Trustee shall transfer any such amounts in accordance
with any certification so made.
(D) The determinations required under subclauses (IV) and (V) of
subparagraph (B)(i) shall be made in accordance with the cost
allocation methodology in existence on August 15, 1994, until such
time as the methodology for making the determinations required
under such subclauses is revised by agreement of the Commissioner
and the Secretary, except that the determination of the amounts to
be borne by the general fund of the Treasury with respect to
expenditures incurred in carrying out the functions of the Social
Security Administration specified in section 432 of this title and
the functions of the Social Security Administration in connection
with the withholding of taxes from benefits as described in section
407(c) of this title shall be made pursuant to the applicable
method prescribed under paragraph (4).
(2) The Managing Trustee is directed to pay from time to time
from the Trust Funds into the Treasury the amount estimated by him
as taxes imposed under section 3101(a) of the Internal Revenue Code
of 1986 which are subject to refund under section 6413(c) of such
Code with respect to wages (as defined in section 3121 of such
Code). Such taxes shall be determined on the basis of the records
of wages maintained by the Commissioner of Social Security in
accordance with the wages reported to the Secretary of the Treasury
or his delegate pursuant to subtitle F of such Code, and the
Commissioner of Social Security shall furnish the Managing Trustee
such information as may be required by the Trustee for such
purpose. The payments by the Managing Trustee shall be covered into
the Treasury as repayments to the account for refunding internal
revenue collections. Payments pursuant to the first sentence of
this paragraph shall be made from the Federal Old-Age and Survivors
Insurance Trust Fund and the Federal Disability Insurance Trust
Fund in the ratio in which amounts were appropriated to such Trust
Funds under clause (3) of subsection (a) of this section and clause
(1) of subsection (b) of this section.
(3) Repayments made under paragraph (1) or (2) of this subsection
shall not be available for expenditures but shall be carried to the
surplus fund of the Treasury. If it subsequently appears that the
estimates under either such paragraph in any particular period were
too high or too low, appropriate adjustments shall be made by the
Managing Trustee in future payments.
(4) The Commissioner of Social Security shall utilize the method
prescribed pursuant to this paragraph, as in effect immediately
before August 15, 1994, for determining the costs which should be
borne by the general fund of the Treasury of carrying out the
functions of the Commissioner, specified in section 432 of this
title, which relate to the administration of provisions of the
Internal Revenue Code of 1986 (other than those referred to in
clause (i) of the first sentence of paragraph (1)(A)). The Board of
Trustees of such Trust Funds shall prescribe the method of
determining the costs which should be borne by the general fund in
the Treasury of carrying out the functions of the Social Security
Administration in connection with the withholding of taxes from
benefits, as described in section 407(c) of this title, pursuant to
requests by persons entitled to such benefits or such persons'
representative payee. If at any time or times thereafter the Boards
of Trustees of such Trust Funds consider such action advisable,
they may modify the method of determining such costs.
(h) Benefit payments
Benefit payments required to be made under section 423 of this
title, and benefit payments required to be made under subsection
(b), (c), or (d) of section 402 of this title to individuals
entitled to benefits on the basis of the wages and self-employment
income of an individual entitled to disability insurance benefits,
shall be made only from the Federal Disability Insurance Trust
Fund. All other benefit payments required to be made under this
subchapter (other than section 426 of this title) shall be made
only from the Federal Old-Age and Survivors Insurance Trust Fund.
(i) Gifts and bequests
(1) The Managing Trustee may accept on behalf of the United
States money gifts and bequests made unconditionally to the Federal
Old-Age and Survivors Insurance Trust Fund, the Federal Disability
Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, or
the Federal Supplementary Medical Insurance Trust Fund (and for the
Medicare Prescription Drug Account and the Transitional Assistance
Account in such Trust Fund) or to the Social Security
Administration, the Department of Health and Human Services, or any
part or officer thereof, for the benefit of any of such Funds or
any activity financed through such Funds.
(2) Any such gift accepted pursuant to the authority granted in
paragraph (1) of this subsection shall be deposited in -
(A) the specific trust fund designated by the donor or
(B) if the donor has not so designated, the Federal Old-Age and
Survivors Insurance Trust Fund.
(j) Travel expenses
There are authorized to be made available for expenditure, out of
the Federal Old-Age and Survivors Insurance Trust Fund, or the
Federal Disability Insurance Trust Fund (as determined appropriate
by the Commissioner of Social Security), such amounts as are
required to pay travel expenses, either on an actual cost or
commuted basis, to individuals for travel incident to medical
examinations requested by the Commissioner of Social Security in
connection with disability determinations under this subchapter,
and to parties, their representatives, and all reasonably necessary
witnesses for travel within the United States (as defined in
section 410(i) of this title) to attend reconsideration interviews
and proceedings before administrative law judges with respect to
any determination under this subchapter. The amount available under
the preceding sentence for payment for air travel by any person
shall not exceed the coach fare for air travel between the points
involved unless the use of first-class accommodations is required
(as determined under regulations of the Commissioner of Social
Security) because of such person's health condition or the
unavailability of alternative accommodations; and the amount
available for payment for other travel by any person shall not
exceed the cost of travel (between the points involved) by the most
economical and expeditious means of transportation appropriate to
such person's health condition, as specified in such regulations.
The amount available for payment under this subsection for travel
by a representative to attend an administrative proceeding before
an administrative law judge or other adjudicator shall not exceed
the maximum amount allowable under this subsection for such travel
originating within the geographic area of the office having
jurisdiction over such proceeding.
(k) Experiment and demonstration project expenditures
Expenditures made for experiments and demonstration projects
under section 434 of this title shall be made from the Federal
Disability Insurance Trust Fund and the Federal Old-Age and
Survivors Insurance Trust Fund, as determined appropriate by the
Commissioner of Social Security.
(l) Interfund borrowing
(1) If at any time prior to January 1988 the Managing Trustee
determines that borrowing authorized under this subsection is
appropriate in order to best meet the need for financing the
benefit payments from the Federal Old-Age and Survivors Insurance
Trust Fund or the Federal Disability Insurance Trust Fund, the
Managing Trustee may borrow such amounts as he determines to be
appropriate from the other such Trust Fund, or, subject to
paragraph (5), from the Federal Hospital Insurance Trust Fund
established under section 1395i of this title, for transfer to and
deposit in the Trust Fund whose need for financing is involved.
(2) In any case where a loan has been made to a Trust Fund under
paragraph (1), there shall be transferred on the last day of each
month after such loan is made, from the borrowing Trust Fund to the
lending Trust Fund, the total interest accrued to such day with
respect to the unrepaid balance of such loan at a rate equal to the
rate which the lending Trust Fund would earn on the amount involved
if the loan were an investment under subsection (d) of this section
(even if such an investment would earn interest at a rate different
than the rate earned by investments redeemed by the lending fund in
order to make the loan).
(3)(A) If in any month after a loan has been made to a Trust Fund
under paragraph (1), the Managing Trustee determines that the
assets of such Trust Fund are sufficient to permit repayment of all
or part of any loans made to such Fund under paragraph (1), he
shall make such repayments as he determines to be appropriate.
(B)(i) If on the last day of any year after a loan has been made
under paragraph (1) by the Federal Hospital Insurance Trust Fund to
the Federal Old-Age and Survivors Insurance Trust Fund or the
Federal Disability Insurance Trust Fund, the Managing Trustee
determines that the OASDI trust fund ratio exceeds 15 percent, he
shall transfer from the borrowing Trust Fund to the Federal
Hospital Insurance Trust Fund an amount that -
(I) together with any amounts transferred from another
borrowing Trust Fund under this paragraph for such year, will
reduce the OASDI trust fund ratio to 15 percent; and
(II) does not exceed the outstanding balance of such loan.
(ii) Amounts required to be transferred under clause (i) shall be
transferred on the last day of the first month of the year
succeeding the year in which the determination described in clause
(i) is made.
(iii) For purposes of this subparagraph, the term "OASDI trust
fund ratio" means, with respect to any calendar year, the ratio of -

(I) the combined balance in the Federal Old-Age and Survivors
Insurance Trust Fund and the Federal Disability Insurance Trust
Fund, as of the last day of such calendar year, to
(II) the amount estimated by the Commissioner of Social
Security to be the total amount to be paid from the Federal Old-
Age and Survivors Insurance Trust Fund and the Federal
Disability Insurance Trust Fund during the calendar year
following such calendar year for all purposes authorized by this
section (other than payments of interest on, and repayments of,
loans from the Federal Hospital Insurance Trust Fund under
paragraph (1), but excluding any transfer payments between such
trust funds and reducing the amount of any transfer to the
Railroad Retirement Account by the amount of any transfers into
either such trust fund from that Account).
(C)(i) The full amount of all loans made under paragraph (1)
(whether made before or after January 1, 1983) shall be repaid at
the earliest feasible date and in any event no later than December
31, 1989.
(ii) For the period after December 31, 1987, and before January
1, 1990, the Managing Trustee shall transfer each month to the
Federal Hospital Insurance Trust Fund from any Trust Fund with any
amount outstanding on a loan made from the Federal Hospital
Insurance Trust Fund under paragraph (1) an amount not less than an
amount equal to (I) the amount owed to the Federal Hospital
Insurance Trust Fund by such Trust Fund at the beginning of such
month (plus the interest accrued on the outstanding balance of such
loan during such month), divided by (II) the number of months
elapsing after the preceding month and before January 1990. The
Managing Trustee may, during this period, transfer larger amounts
than prescribed by the preceding sentence.
(4) The Board of Trustees shall make a timely report to the
Congress of any amounts transferred (including interest payments)
under this subsection.
(5)(A) No amounts may be borrowed from the Federal Hospital
Insurance Trust Fund under paragraph (1) during any month if the
Hospital Insurance Trust Fund ratio for such month is less than 10
percent.
(B) For purposes of this paragraph, the term "Hospital Insurance
Trust Fund ratio" means, with respect to any month, the ratio of -
(i) the balance in the Federal Hospital Insurance Trust Fund,
reduced by the outstanding amount of any loan (including interest
thereon) theretofore made to such Trust Fund under this
subsection, as of the last day of the second month preceding such
month, to
(ii) the amount obtained by multiplying by twelve the total
amount which (as estimated by the Secretary) will be paid from
the Federal Hospital Insurance Trust Fund during the month for
which such ratio is to be determined (other than payments of
interest on, or repayments of loans from another Trust Fund under
this subsection), and reducing the amount of any transfers to the
Railroad Retirement Account by the amount of any transfer into
the Hospital Insurance Trust Fund from that Account.
(m) Accounting for unnegotiated benefit checks
(1) The Secretary of the Treasury shall implement procedures to
permit the identification of each check issued for benefits under
this subchapter that has not been presented for payment by the
close of the sixth month following the month of its issuance.
(2) The Secretary of the Treasury shall, on a monthly basis,
credit each of the Trust Funds for the amount of all benefit checks
(including interest thereon) drawn on such Trust Fund more than 6
months previously but not presented for payment and not previously
credited to such Trust Fund, to the extent provided in advance in
appropriation Acts.
(3) If a benefit check is presented for payment to the Treasury
and the amount thereof has been previously credited pursuant to
paragraph (2) to one of the Trust Funds, the Secretary of the
Treasury shall nevertheless pay such check, if otherwise proper,
recharge such Trust Fund, and notify the Commissioner of Social
Security.
(4) A benefit check bearing a current date may be issued to an
individual who did not negotiate the original benefit check and who
surrenders such check for cancellation if the Secretary of the
Treasury determines it is necessary to effect proper payment of
benefits.
(n) Payments to Funds in satisfaction of obligations
Not later than July 1, 2004, the Secretary of the Treasury shall
transfer, from amounts in the general fund of the Treasury that are
not otherwise appropriated -
(1) $624,971,854 to the Federal Old-Age and Survivors Insurance
Trust Fund;
(2) $105,379,671 to the Federal Disability Insurance Trust
Fund; and
(3) $173,306,134 to the Federal Hospital Insurance Trust Fund.
Amounts transferred in accordance with this subsection shall be in
satisfaction of certain outstanding obligations for deemed wage
credits for 2000 and 2001.