26 U.S.C. § 3309 — State law coverage of services performed

Page 2824 TITLE 26—INTERNAL REVENUE CODE § 3308 § 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 instrumen- tality of the United States an exemption from taxation, such instrumentality shall not be ex- empt from the tax imposed by section 3301 un- less 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. (Added Pub. L. 86–778, title V, § 531(d)(1), Sept. 13, 1960, 74 Stat. 983.) Editorial Notes REFERENCES IN TEXT Enacted before or after the enactment of this section, referred to in text, means enacted before or after Sept. 13, 1960, the date of approval of Pub. L. 86–778. PRIOR PROVISIONS A prior section 3309 was renumbered section 3311 of this title. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section applicable with respect to remuneration paid after 1961 for services performed after 1961, see section 535 of Pub. L. 86–778, set out as an Effective Date of 1960 Amendment note under section 3305 of this title. APPLICABILITY TO FEDERAL LAND BANKS, FEDERAL IN- TERMEDIATE CREDIT BANKS, AND BANKS FOR CO- OPERATIVES Applicability of this section to Federal land banks, Federal intermediate credit banks, and banks for co- operatives, see section 531(g) of Pub. L. 86–778, set out as a note under section 3305 of this title. § 3309. State law coverage of services performed for nonprofit organizations or governmental entities (a) State law requirements For purposes of section 3304(a)(6)— (1) except as otherwise provided in sub- sections (b) and (c), the services to which this paragraph applies are— (A) service excluded from the term ‘‘em- ployment’’ solely by reason of paragraph (8) of section 3306(c), and (B) service excluded from the term ‘‘em- ployment’’ solely by reason of paragraph (7) of section 3306(c); and (2) the State law shall provide that a govern- mental entity, including an Indian tribe, or any other organization (or group of govern- mental entities or other organizations) which, but for the requirements of this paragraph, would be liable for contributions with respect to service to which paragraph (1) applies may elect, for such minimum period and at such time as may be provided by State law, to pay (in lieu of such contributions) into the State unemployment fund amounts equal to the amounts of compensation attributable under the State law to such service. The State law may provide safeguards to ensure that govern- mental entities or other organizations so electing will make the payments required under such elections. (b) Section not to apply to certain service This section shall not apply to service per- formed— (1) in the employ of (A) a church or conven- tion or association of churches, (B) an organi- zation which is operated primarily for reli- gious purposes and which is operated, super- vised, controlled, or principally supported by a church or convention or association of church- es, or (C) an elementary or secondary school which is operated primarily for religious pur- poses, which is described in section 501(c)(3), and which is exempt from tax under section 501(a); (2) by a duly ordained, commissioned, or li- censed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order; (3) in the employ of a governmental entity referred to in paragraph (7) of section 3306(c), if such service is performed by an individual in the exercise of his duties— (A) as an elected official; (B) as a member of a legislative body, or a member of the judiciary, of a State or polit- ical subdivision thereof, or of an Indian tribe; (C) as a member of the State National Guard or Air National Guard; (D) as an employee serving on a temporary basis in case of fire, storm, snow, earth- quake, flood, or similar emergency; (E) in a position which, under or pursuant to the State or tribal law, is designated as (i) a major nontenured policymaking or advi- sory position, or (ii) a policymaking or advi- sory position the performance of the duties of which ordinarily does not require more than 8 hours per week; or (F) as an election official or election work- er if the amount of remuneration received by the individual during the calendar year for services as an election official or election worker is less than $1,000; (4) in a facility conducted for the purpose of carrying out a program of— (A) rehabilitation for individuals whose earning capacity is impaired by age or phys- ical or mental deficiency or injury, or (B) providing remunerative work for indi- viduals who because of their impaired phys- ical or mental capacity cannot be readily ab- sorbed in the competitive labor market, by an individual receiving such rehabilitation or remunerative work; (5) as part of an unemployment work-relief or work-training program assisted or financed in whole or in part by any Federal agency or an agency of a State or political subdivision thereof or of an Indian tribe, by an individual receiving such work relief or work training; and (6) by an inmate of a custodial or penal in- stitution. (c) Nonprofit organizations must employ 4 or more This section shall not apply to service per- formed during any calendar year in the employ Page 2825 TITLE 26—INTERNAL REVENUE CODE § 3309 of any organization unless on each of some 20 days during such calendar year or the preceding calendar year, each day being in a different cal- endar week, the total number of individuals who were employed by such organization in employ- ment (determined without regard to section 3306(c)(8) and by excluding service to which this section does not apply by reason of subsection (b)) for some portion of the day (whether or not at the same moment of time) was 4 or more. (d) Election by Indian tribe The State law shall provide that an Indian tribe may make contributions for employment as if the employment is within the meaning of section 3306 or make payments in lieu of con- tributions under this section, and shall provide that an Indian tribe may make separate elec- tions for itself and each subdivision, subsidiary, or business enterprise wholly owned by such In- dian tribe. State law may require a tribe to post a payment bond or take other reasonable meas- ures to assure the making of payments in lieu of contributions under this section. Notwith- standing the requirements of section 3306(a)(6), if, within 90 days of having received a notice of delinquency, a tribe fails to make contributions, payments in lieu of contributions, or payment of penalties or interest (at amounts or rates com- parable to those applied to all other employers covered under the State law) assessed with re- spect to such failure, or if the tribe fails to post a required payment bond, then service for the tribe shall not be excepted from employment under section 3306(c)(7) until any such failure is corrected. This subsection shall apply to an In- dian tribe within the meaning of section 4(e) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 5304(e)). (Added Pub. L. 91–373, title I, § 104(b)(1), Aug. 10, 1970, 84 Stat. 697; amended Pub. L. 94–566, title I, § 115(a), (b), (c)(2), (3), title V, § 506(a), Oct. 20, 1976, 90 Stat. 2670, 2671, 2687; Pub. L. 95–19, title III, § 302(b), Apr. 12, 1977, 91 Stat. 44; Pub. L. 105–33, title V, §§ 5405(a), 5407(a), Aug. 5, 1997, 111 Stat. 604, 605; Pub. L. 106–554, § 1(a)(7) [title I, § 166(b), (c)], Dec. 21, 2000, 114 Stat. 2763, 2763A–627; Pub. L. 115–141, div. U, title IV, § 401(a)(216), Mar. 23, 2018, 132 Stat. 1194.) Editorial Notes PRIOR PROVISIONS A prior section 3309 was renumbered section 3311 of this title. AMENDMENTS 2018—Subsec. (d). Pub. L. 115–141 substituted ‘‘25 U.S.C. 5304(e)’’ for ‘‘25 U.S.C. 450b(e)’’. 2000—Subsec. (a)(2). Pub. L. 106–554, § 1(a)(7) [title I, § 166(b)(1)], inserted ‘‘, including an Indian tribe,’’ after ‘‘the State law shall provide that a governmental enti- ty’’. Subsec. (b)(3)(B). Pub. L. 106–554, § 1(a)(7) [title I, § 166(b)(2)], inserted ‘‘, or of an Indian tribe’’ before semicolon at end. Subsec. (b)(3)(E). Pub. L. 106–554, § 1(a)(7) [title I, § 166(b)(3)], inserted ‘‘or tribal’’ after ‘‘the State’’. Subsec. (b)(5). Pub. L. 106–554, § 1(a)(7) [title I, § 166(b)(4)], inserted ‘‘or of an Indian tribe’’ after ‘‘an agency of a State or political subdivision thereof’’. Subsec. (d). Pub. L. 106–554, § 1(a)(7) [title I, § 166(c)], added subsec. (d). 1997—Subsec. (b)(1)(C). Pub. L. 105–33, § 5407(a), added subpar. (C). Subsec. (b)(3)(F). Pub. L. 105–33, § 5405(a), added sub- par. (F). 1977—Subsec. (a)(2). Pub. L. 95–19 substituted ‘‘(or group of governmental entities or other organiza- tions)’’ for ‘‘(or group of organizations)’’. 1976—Pub. L. 94–566, § 115(c)(3), substituted ‘‘services performed for nonprofit organizations or governmental entities’’ for ‘‘certain services performed for nonprofit organizations and for State hospitals and institutions of higher education’’ in section catchline. Subsec. (a)(1)(B). Pub. L. 94–566, § 115(a), struck out ‘‘performed in the employ of the State, or any instru- mentality of the State or of the State and one or more other States, for a hospital or institution of higher edu- cation located in the State, if such service is’’ after ‘‘service’’. Subsec. (a)(2). Pub. L. 94–566, § 506(a), substituted ‘‘a governmental entity or any other organization’’ for ‘‘an organization’’, ‘‘paragraph (1)’’ for ‘‘paragraph (1)(A)’’, and ‘‘that governmental entities or other orga- nizations’’ for ‘‘that organizations’’. Subsec. (b)(3). Pub. L. 94–566, § 115(b)(1), substituted reference to services performed in the employ of a gov- ernmental entity referred to in paragraph (7) of section 3306(c), if such services are performed by an individual in the exercise of his duties as an elected official, as a member of a legislative body, or a member of the judi- ciary, of a State or political subdivision thereof, as a member of the State National Guard or Air National Guard, as an employee serving on a temporary basis in case of fire, storm, snow, earthquake, flood, or similar emergency, or in a position which, under or pursuant to the State law, is designated as a major nontenured pol- icymaker or advisory position or a policymaking or ad- visory position the performance of the duties of which ordinarily does not require more than 8 hours per week, for reference to services performed in the employ of a school which is not an institution of higher education. Subsec. (b)(6). Pub. L. 94–566, § 115(b)(2), substituted ‘‘by an inmate of a custodial or penal institution’’ for ‘‘for a hospital in a State prison or other State correc- tional institution by an inmate of the prison or correc- tional institution’’. Subsec. (d). Pub. L. 94–566, § 115(c)(2), struck out sub- sec. (d) which defined ‘‘institution of higher edu- cation’’. See section 3304(f) of this title. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2000 AMENDMENT Amendment by Pub. L. 106–554 applicable to service performed on or after Dec. 21, 2000, with transition rule for service performed in the employ of an Indian tribe, see section 166(e) of Pub. L. 106–554, set out as a note under section 3306 of this title. EFFECTIVE DATE OF 1997 AMENDMENT Pub. L. 105–33, title V, § 5405(b), Aug. 5, 1997, 111 Stat. 605, provided that: ‘‘The amendments made by this sec- tion [amending this section] shall apply with respect to service performed after the date of the enactment of this Act [Aug. 5, 1997].’’ Pub. L. 105–33, title V, § 5407(b), Aug. 5, 1997, 111 Stat. 605, provided that: ‘‘The amendments made by this sec- tion [amending this section] shall apply with respect to service performed after the date of the enactment of this Act [Aug. 5, 1997].’’ EFFECTIVE DATE OF 1977 AMENDMENT Pub. L. 95–19, title III, § 302(d)(2), Apr. 12, 1977, 91 Stat. 45, provided that: ‘‘The amendment made by subsection (b) [amending this section] shall take effect as if in- cluded in the amendments made by section 506 of the Unemployment Compensation Amendments of 1976 [which amended this section in 1976, see Effective Date of 1976 Amendment note below].’’ Page 2826 TITLE 26—INTERNAL REVENUE CODE § 3310 EFFECTIVE DATE OF 1976 AMENDMENT For effective date of amendment by section 115(a), (b), (c)(2), (3) of Pub. L. 94–566, see section 115(d) of Pub. L. 94–566, set out as a note under section 3304 of this title. For effective date of amendment by section 506(a) of Pub. L. 94–566, see section 506(c) of Pub. L. 94–566, set out as a note under section 3304 of this title. EFFECTIVE DATE Section applicable with respect to certifications of State laws for 1972 and subsequent years, but only with respect to service performed after Dec. 31, 1971, see sec- tion 104(d)(1) of Pub. L. 91–373, set out as a note under section 3304 of this title. § 3310. Judicial review (a) In general Whenever under section 3303(b) or section 3304(c) the Secretary of Labor makes a finding pursuant to which he is required to withhold a certification with respect to a State under such section, such State may, within 60 days after the Governor of the State has been notified of such action, file with the United States court of ap- peals for the circuit in which such State is lo- cated or with the United States Court of Appeals for the District of Columbia, a petition for re- view of such action. A copy of the petition shall be forthwith transmitted by the clerk of the court to the Secretary of Labor. The Secretary of Labor thereupon shall file in the court the record of the proceedings on which he based his action as provided in section 2112 of title 28 of the United States Code. (b) Findings of fact The findings of fact by the Secretary of Labor, if supported by substantial evidence, shall be conclusive; but the court, for good cause shown, may remand the case to the Secretary of Labor to take further evidence, and the Secretary of Labor may thereupon make new or modified findings of fact and may modify his previous ac- tion, and shall certify to the court the record of the further proceedings. Such new or modified findings of fact shall likewise be conclusive if supported by substantial evidence. (c) Jurisdiction of court; review The court shall have jurisdiction to affirm the action of the Secretary of Labor or to set it aside, in whole or in part. The judgment of the court shall be subject to review by the Supreme Court of the United States upon certiorari or certification as provided in section 1254 of title 28 of the United States Code. (d) Stay of Secretary of Labor’s action (1) The Secretary of Labor shall not withhold any certification under section 3303(b) or section 3304(c) until the expiration of 60 days after the Governor of the State has been notified of the action referred to in subsection (a) or until the State has filed a petition for review of such ac- tion, whichever is earlier. (2) The commencement of judicial proceedings under this section shall stay the Secretary of Labor’s action for a period of 30 days, and the court may thereafter grant interim relief if war- ranted, including a further stay of the Secretary of Labor’s action and including such other relief as may be necessary to preserve status or rights. (Added Pub. L. 91–373, title I, § 131(b)(1), Aug. 10, 1970, 84 Stat. 703; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(F), (H), Oct. 4, 1976, 90 Stat. 1835; Pub. L. 98–620, title IV, § 402(28)(A), Nov. 8, 1984, 98 Stat. 3359.) Editorial Notes AMENDMENTS 1984—Subsec. (e). Pub. L. 98–620 struck out subsec. (e) which had provided that any judicial proceedings under this section were entitled to, and upon request of the Secretary of Labor or of the State would receive, a preference and would be heard and determined as expe- ditiously as possible. 1976—Subsec. (d)(2). Pub. L. 94–455, § 1906(b)(13)(F), substituted ‘‘the Secretary of Labor’s action’’ for ‘‘the Secretary’s action’’ in two places. Subsec. (e). Pub. L. 94–455, § 1906(b)(13)(H), substituted ‘‘of the Secretary of Labor’’ for ‘‘of the Secretary’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–620 not applicable to cases pending on Nov. 8, 1984, see section 403 of Pub. L. 98–620, set out as an Effective Date note under section 1657 of Title 28, Judiciary and Judicial Procedure. § 3311. Short title This chapter may be cited as the ‘‘Federal Un- employment Tax Act.’’ (Aug. 16, 1954, ch. 736, 68A Stat. 454, § 3308; re- numbered § 3309, Pub. L. 86–778, title V, § 531(d)(1), Sept. 13, 1960, 74 Stat. 983; renumbered § 3311, Pub. L. 91–373, title I, § 104(b)(1), Aug. 10, 1970, 84 Stat. 697.) Statutory Notes and Related Subsidiaries SHORT TITLE OF 1976 AMENDMENT Pub. L. 94–566, § 1, Oct. 20, 1976, 90 Stat. 2667, provided that: ‘‘This Act [enacting section 603a of Title 42, The Public Health and Welfare, amending section 3304 of this title and provisions set out as notes under sections 3301, 3303, 3304, 3306, 3309, and 6157 of this title, sections 8501, 8503, 8504, 8505, 8506, 8521, and 8522 of Title 5, Gov- ernment Organization and Employees, sections 49b and 49d of Title 29, Labor, and sections 607, 1101, 1105, 1301, 1321, 1382, 1382a, 1382d, and 1382e of Title 42, and enact- ing provisions set out as notes under sections 3301, 3303, 3304, and 3306 of this title, sections 8501 and 8506 of Title 5, and sections 607, 1101, 1321, 1382, 1382d, 1382e, and 1396a of Title 42] may be cited as the ‘Unemployment Com- pensation Amendments of 1976’.’’ SHORT TITLE OF 1975 AMENDMENT Pub. L. 94–45, § 1, June 30, 1975, 89 Stat. 236, provided that: ‘‘This Act [amending sections 44 and 3302 of this title and amending provisions set out as notes under sections 44 and 3304 of this title and enacting provisions set out as notes under sections 3302 and 3304 of this title] may be cited as the ‘Emergency Compensation and Special Unemployment Assistance Extension Act of 1975’.’’ SHORT TITLE OF 1970 AMENDMENT Pub. L. 91–373, § 1, Aug. 10, 1970, 84 Stat. 695, provided: ‘‘That this Act [enacting sections 3309 and 3310 of this title and sections 504, 1106, 1107, and 1108 of Title 42, The Public Health and Welfare, repealing section 8524 of Title 5, Government Organization and Employees, and amending sections 1563, 3301 to 3306, and 6157 of this title, sections 77c and 78c of Title 15, Commerce and Trade, and sections 1101, 1102, 1103, 1105, and 1323 of