---
kind: "section"
citation: "45 U.S.C. § 363"
title: "45"
title_heading: "Railroads"
number: "363"
heading: "Exclusiveness of provisions; transfers from State unemployment compensation accounts to railroad unemployment insurance account"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/45/363"
units:
  - "Chapter 11 — Railroad Unemployment Insurance"
---

# §363. Exclusiveness of provisions; transfers from State unemployment compensation accounts to railroad unemployment insurance account

- (a) **Omitted—**
- (b) **Effect on State unemployment compensation laws—** By enactment of this chapter the Congress makes exclusive provision for the payment of unemployment [benefits](/usc/45/351.md?p=l-1) for unemployment occurring after June 30, 1939, and for the payment of sickness [benefits](/usc/45/351.md?p=l-1) for sickness periods after June 30, 1947, based upon [employment](/usc/45/351.md?p=g) (as defined in this chapter). No [employee](/usc/45/351.md?p=d) shall have or assert any right to unemployment [benefits](/usc/45/351.md?p=l-1) under an unemployment [compensation](/usc/45/351.md?p=i-1) law of any [State](/usc/45/351.md?p=t) with respect to unemployment occurring after June 30, 1939, or to sickness [benefits](/usc/45/351.md?p=l-1) under a sickness law of any [State](/usc/45/351.md?p=t) with respect to sickness periods occurring after June 30, 1947, based upon [employment](/usc/45/351.md?p=g) (as defined in this chapter). The Congress finds and declares that by virtue of the enactment of this chapter, the application of [State](/usc/45/351.md?p=t) unemployment [compensation](/usc/45/351.md?p=i-1) laws after June 30, 1939 or of [State](/usc/45/351.md?p=t) sickness laws after June 30, 1947, to such [employment](/usc/45/351.md?p=g), except pursuant to [section 362(g) of this title](/usc/45/362.md?p=g), would constitute an undue burden upon, and an undue interference with the effective regulation of, interstate commerce. In furtherance of such determination, after June 30, 1939, the term “person” as used in [section 1106 of title 42](/usc/42/1106.md) shall not be construed to include any [employer](/usc/45/351.md?p=a) (as defined in this chapter) or any person in its employ: Provided, That no provision of this chapter shall be construed to affect the payment of unemployment [benefits](/usc/45/351.md?p=l-1) with respect to any period prior to July 1, 1939, under an unemployment [compensation](/usc/45/351.md?p=i-1) law of any [State](/usc/45/351.md?p=t) based upon [employment](/usc/45/351.md?p=g) performed prior to July 1, 1939, and prior to such date [employment](/usc/45/351.md?p=g) as defined in this chapter shall not constitute “Service with respect to which unemployment [compensation](/usc/45/351.md?p=i-1) is payable under an [or “service under any”] unemployment [compensation](/usc/45/351.md?p=i-1) system [or “plan”] established by an Act of Congress” [or “a law of the [United States](/usc/45/351.md?p=s)”] or “[employment](/usc/45/351.md?p=g) in interstate commerce, of an individual who is covered by an unemployment [compensation](/usc/45/351.md?p=i-1) system established directly by an Act of Congress,” or any term of similar import, used in any unemployment [compensation](/usc/45/351.md?p=i-1) law of any [State](/usc/45/351.md?p=t).
- (c) **Determination of “preliminary amount” for States—** The Social Security [Board](/usc/45/351.md?p=r) is directed to determine for each [State](/usc/45/351.md?p=t), after agreement with the Railroad Retirement [Board](/usc/45/351.md?p=r), and after consultation with such [State](/usc/45/351.md?p=t); the total (hereinafter referred to as the “preliminary amount”) of (i) the amount remaining as the balances of reserve [accounts](/usc/45/351.md?p=p) of [employers](/usc/45/351.md?p=a) as of June 30, 1939, if the unemployment [compensation](/usc/45/351.md?p=i-1) law of such [State](/usc/45/351.md?p=t) provides for a type of [fund](/usc/45/351.md?p=q) known as “Reserve [Accounts](/usc/45/351.md?p=p),” plus (ii) if the unemployment [compensation](/usc/45/351.md?p=i-1) law of such [State](/usc/45/351.md?p=t) provides for a type of [fund](/usc/45/351.md?p=q) known as “Pooled [Fund](/usc/45/351.md?p=q)” or “Pooled [Account](/usc/45/351.md?p=p),” that proportion of the balance of such [fund](/usc/45/351.md?p=q) or [account](/usc/45/351.md?p=p) of such [State](/usc/45/351.md?p=t) as of June 30, 1939, as the amount of taxes or contributions collected from [employers](/usc/45/351.md?p=a) and their [employees](/usc/45/363a.md?p=b-3) prior to July 1, 1939, pursuant to its unemployment [compensation](/usc/45/351.md?p=i-1) law and credited to such [fund](/usc/45/351.md?p=q) or [account](/usc/45/351.md?p=p) bears to all such taxes or contributions theretofore collected from all persons subject to its unemployment [compensation](/usc/45/351.md?p=i-1) law and credited to such [fund](/usc/45/351.md?p=q) or [account](/usc/45/351.md?p=p); and the additional amounts (hereinafter referred to as the “liquidating amount”) of taxes or contributions collected from [employers](/usc/45/351.md?p=a) and their [employees](/usc/45/363a.md?p=b-3) from July 1, 1939 to December 31, 1939, pursuant to its unemployment [compensation](/usc/45/351.md?p=i-1) law.
- (d) **Withholding amounts from certification to States; transfers to railroad unemployment compensation account—** The Social Security [Board](/usc/45/351.md?p=r) shall withhold from certification to the [Secretary](/usc/45/1104.md?p=7) of the Treasury for payment the amounts determined by it pursuant to [section 502(a) of title 42](/usc/42/502.md?p=a) to be necessary for the proper administration of each [State](/usc/45/351.md?p=t)’s unemployment-[compensation](/usc/45/351.md?p=i-1) law, until an amount equal to its “preliminary amount” plus interest from July 1, 1939, at 2½ per centum per annum on such portion thereof as has not been used as the measure for withholding certification for payment, has been so withheld from certification pursuant to this paragraph: Provided, however, That if a [State](/usc/45/351.md?p=t) shall, prior to whichever is the later of (i) thirty days after the close of the first regular session of its legislature which begins after the approval of this chapter, and (ii) July 1, 1939, authorize and direct the [Secretary](/usc/45/1104.md?p=7) of the Treasury to transfer from its [account](/usc/45/351.md?p=p) in the [unemployment trust fund](/usc/45/363a.md?p=b-2) to the railroad unemployment insurance [account](/usc/45/351.md?p=p) in the [unemployment trust fund](/usc/45/363a.md?p=b-2) an amount equal to its “preliminary amount”, no amount shall be withheld from certification for payment to such [State](/usc/45/351.md?p=t) pursuant to this paragraph.

  The Social Security [Board](/usc/45/351.md?p=r) shall withhold from certification to the [Secretary](/usc/45/1104.md?p=7) of the Treasury for payment the amounts determined by it pursuant to [section 502(a) of title 42](/usc/42/502.md?p=a) to be necessary for the proper administration of each [State](/usc/45/351.md?p=t)’s unemployment [compensation](/usc/45/351.md?p=i-1) law, until an amount equal to its “liquidating amount” plus interest from January 1, 1940, at 2½ per centum per annum on such portion thereof as has not been used as the measure for withholding certification for payment has been so withheld from certification pursuant to this paragraph: Provided, however, That if a [State](/usc/45/351.md?p=t) shall, prior to whichever is the later of (i) thirty days after the close of the first regular session of its legislature which begins after the approval of this chapter, and (ii) January 1, 1940, authorize and direct the [Secretary](/usc/45/1104.md?p=7) of the Treasury to transfer from its [account](/usc/45/351.md?p=p) in the [unemployment trust fund](/usc/45/363a.md?p=b-2) to the railroad unemployment insurance [account](/usc/45/351.md?p=p) in the [unemployment trust fund](/usc/45/363a.md?p=b-2) an amount equal to its “liquidating amount”, no amount shall be withheld from certification for payment to such [State](/usc/45/351.md?p=t) pursuant to this paragraph.

  The withholdings from certification directed in each of the foregoing paragraphs of this subsection shall begin with respect to each [State](/usc/45/351.md?p=t) when the Social Security [Board](/usc/45/351.md?p=r) finds that such [State](/usc/45/351.md?p=t) is unable to avail itself of the condition set forth in the proviso contained in such paragraph: Provided, however, That if the Social Security [Board](/usc/45/351.md?p=r) finds with respect to any [State](/usc/45/351.md?p=t) that such [State](/usc/45/351.md?p=t) (1) is unable to avail itself of such conditions solely by reason of prohibitions contained in the constitution of such [State](/usc/45/351.md?p=t), as determined by a decision of the highest court of such [State](/usc/45/351.md?p=t) declaring invalid in whole or in part the action of the legislature of the [State](/usc/45/351.md?p=t) purporting to provide for transfers from the [State](/usc/45/351.md?p=t)’s [account](/usc/45/351.md?p=p) in the [Unemployment Trust Fund](/usc/45/363a.md?p=b-2) to the railroad unemployment insurance [account](/usc/45/351.md?p=p), and (2) for similar reasons is unable to use amounts withdrawn from its [account](/usc/45/351.md?p=p) in the [Unemployment Trust Fund](/usc/45/363a.md?p=b-2) for the payment of expenses incurred in the administration of its [State](/usc/45/351.md?p=t) unemployment [compensation](/usc/45/351.md?p=i-1) law, the Social Security [Board](/usc/45/351.md?p=r) shall not begin to withhold from certification to the [Secretary](/usc/45/1104.md?p=7) of the Treasury for payment to such [State](/usc/45/351.md?p=t) the amounts determined by it pursuant to [section 502 of title 42](/usc/42/502.md) and to certify to the [Secretary](/usc/45/1104.md?p=7) of the Treasury for payment into the railroad unemployment insurance [account](/usc/45/351.md?p=p) the amount so withheld from such [State](/usc/45/351.md?p=t) until July 1, 1944, or until a date one hundred and eighty days after the adjournment of the first session of the legislature of such [State](/usc/45/351.md?p=t) beginning after July 1, 1942, whichever date is the earlier, and then only if the Social Security [Board](/usc/45/351.md?p=r) finds that such [State](/usc/45/351.md?p=t) had not prior thereto effectively authorized and directed the [Secretary](/usc/45/1104.md?p=7) of the Treasury to transfer from such [State](/usc/45/351.md?p=t)’s [account](/usc/45/351.md?p=p) in the [Unemployment Trust Fund](/usc/45/363a.md?p=b-2) to the railroad unemployment insurance [account](/usc/45/351.md?p=p) amounts equal to such [State](/usc/45/351.md?p=t)’s “preliminary amount” and “liquidating amount” less such parts thereof, if any, as the [State](/usc/45/351.md?p=t) may have, within the periods set forth in the provisos contained in the first two paragraphs of this subsection, effectively authorized and directed the [Secretary](/usc/45/1104.md?p=7) of the Treasury so to transfer, plus interest on such difference, if any, with respect to each amount, at 2½ per centum per annum from the date the [State](/usc/45/351.md?p=t)’s “preliminary amount” or “liquidating amount”, as the case may be, is determined by the Social Security [Board](/usc/45/351.md?p=r); and with respect to any such [State](/usc/45/351.md?p=t) the amount withheld shall equal the [State](/usc/45/351.md?p=t)’s “preliminary amount” and “liquidating amount” less such parts thereof, if any, as the [State](/usc/45/351.md?p=t) may have, within the periods set forth in the provisos contained in the first two paragraphs of this subsection effectively authorized and directed the [Secretary](/usc/45/1104.md?p=7) of the Treasury to transfer, plus interest from July 1, 1939, at 2½ per centum per annum on so much of the “preliminary amount” and “liquidating amount”, as the case may be, as has not been so transferred or has not been used as the measure for withholding. An enactment of any [State](/usc/45/351.md?p=t) legislature providing for the transfer (from the [State](/usc/45/351.md?p=t)’s [account](/usc/45/351.md?p=p) in the [Unemployment Trust Fund](/usc/45/363a.md?p=b-2) to the railroad unemployment insurance [account](/usc/45/351.md?p=p)) of all interest earned upon contributions which are collected with respect to [employment](/usc/45/351.md?p=g) occurring after such enactment by such [State](/usc/45/351.md?p=t) pursuant to its unemployment [compensation](/usc/45/351.md?p=i-1) law and credited to its [account](/usc/45/351.md?p=p) in the [Unemployment Trust Fund](/usc/45/363a.md?p=b-2) (until the total of such transfers equals the amounts which otherwise would be required to be withheld from certification under this subsection), shall be deemed an effective authorization and direction to the [Secretary](/usc/45/1104.md?p=7) of the Treasury as required by this subsection; and for purposes of computing the interest to be so transferred, amounts withdrawn by such [State](/usc/45/351.md?p=t) from its [account](/usc/45/351.md?p=p) in the [Unemployment Trust Fund](/usc/45/363a.md?p=b-2) after the date of such [State](/usc/45/351.md?p=t) enactment shall be considered to be first charged against the amounts credited to such [State](/usc/45/351.md?p=t)’s [account](/usc/45/351.md?p=p) prior to the date of such [State](/usc/45/351.md?p=t) enactment: Provided, however, That if at any time after such enactment the provision for transfer therein contained for any reason fails to be operative to effect the transfers of interest as therein prescribed, and such [State](/usc/45/351.md?p=t) has not otherwise made an effective authorization and direction to the [Secretary](/usc/45/1104.md?p=7) of the Treasury as required by this subsection, the Social Security [Board](/usc/45/351.md?p=r) shall immediately after such failure or, on the date otherwise provided in this subsection for the beginning of withholdings from certification, whichever is later, begin to make the withholdings from certification provided for in this subsection in the same manner and to the same extent as if such enactment by such [State](/usc/45/351.md?p=t) had not been enacted, except that the amounts of the certifications withheld shall be reduced by the total amount, if any, which has been transferred from interest pursuant to such enactment.

- (e) **Transfers and withdrawals, effect upon social security provisions—** The transfers described in the provisos contained in the several paragraphs of [subsection (d)](#d) of this section shall not be deemed to constitute a breach of the conditions set forth in sections [503(a)(5)](/usc/42/503.md?p=a-5) and [1103(a)(4)](/usc/42/1103.md) of title 42; nor shall the withdrawal by a [State](/usc/45/351.md?p=t) from its [account](/usc/45/351.md?p=p) in the [unemployment trust fund](/usc/45/363a.md?p=b-2) of amounts, but not to exceed the total amount the Social Security [Board](/usc/45/351.md?p=r) shall have withheld from certification with respect to such [State](/usc/45/351.md?p=t) pursuant to [subsection (d)](#d) of this section, be deemed to constitute a breach of the conditions set forth in sections [503(a)(5)](/usc/42/503.md?p=a-5) and [1103(a)(4)](/usc/42/1103.md) of title 42, provided the moneys so withdrawn are expended solely for expenses which the Social Security [Board](/usc/45/351.md?p=r) determines to be necessary for the proper administration of such [State](/usc/45/351.md?p=t)’s unemployment [compensation](/usc/45/351.md?p=i-1) law.
- (f) **Payments to railroad unemployment insurance account; transfers from unemployment trust fund of States—** The Social Security [Board](/usc/45/351.md?p=r) is authorized and directed to certify to the [Secretary](/usc/45/1104.md?p=7) of the Treasury for payment, and the [Secretary](/usc/45/1104.md?p=7) shall pay, into the railroad unemployment insurance [account](/usc/45/351.md?p=p), such amounts as the Social Security [Board](/usc/45/351.md?p=r) withholds from certification pursuant to [subsection (d)](#d) of this section and the appropriations authorized in [section 501 of title 42](/usc/42/501.md) shall be available for payments authorized by this subsection. The [Secretary](/usc/45/1104.md?p=7) shall transfer from the [account](/usc/45/351.md?p=p) of a [State](/usc/45/351.md?p=t) in the [unemployment trust fund](/usc/45/363a.md?p=b-2) to the railroad unemployment insurance [account](/usc/45/351.md?p=p) in the [unemployment trust fund](/usc/45/363a.md?p=b-2) such amounts as the [State](/usc/45/351.md?p=t) authorizes and directs him so to transfer pursuant to [subsection (d)](#d) of this section.

## Source credit

(June 25, 1938, ch. 680, § 13(b)–(f), 52 Stat. 1110; June 20, 1939, ch. 227, § 17, 53 Stat. 848; July 2, 1940, ch. 530, 54 Stat. 741; June 30, 1942, ch. 463, 56 Stat. 465; July 31, 1946, ch. 709, § 324, 60 Stat. 741; Pub. L. 90–257, title II, § 207, Feb. 15, 1968, 82 Stat. 25.)

## Notes

### Editorial Notes

### References in Text

This chapter, referred to in subsecs. (b) and (d), was in the original “this Act”, meaning act June 25, 1938, ch. 680, 52 Stat. 1094, which enacted this chapter and amended sections 503 and 1104 and former section 1107 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see section 367 of this title and Tables.

Sections 1106 and 1103(a)(4) of title 42, referred to in subsecs. (b) and (e), respectively, which were in the original references to sections 906 and 903(a)(4), respectively, of the Social Security Act, as in existence prior to February 10, 1939, were omitted from the Code pursuant to section 4 of act Feb. 10, 1939, ch. 2, 53 Stat. 1, which provided that all laws and parts of laws codified into the Internal Revenue Code of 1939, to the extent that they related exclusively to internal revenue laws, were repealed. For further details, see Prior Provisions note preceding section 1101 of Title 42, The Public Health and Welfare. For provisions similar to sections 1106 and 1103(a)(4), see sections 3305 and 3304, respectively, of Title 26, Internal Revenue Code.

### Codification

Section 13(a) of act June 25, 1938, amended former section 1107 of Title 42, The Public Health and Welfare. Section 13(g) of act June 25, 1938, amended section 503 of Title 42.

### Amendments

1968—Subsec. (b). Pub. L. 90–257 struck out all references to maternity benefits.

1946—Subsec. (b). Act July 31, 1946, inserted phrases extending provisions of that subsection to State sickness and maternity laws and benefits after June 30, 1947.

1942—Subsec. (d). Act June 30, 1942, affected provisos in third par.

1940—Subsec. (d). Act July 2, 1940, affected provisos in third par.

1939—Subsec. (d). Act June 20, 1939, substituted references to unemployment insurance account for references to unemployment compensation account wherever appearing.

### Statutory Notes and Related Subsidiaries

### Effective Date of 1968 Amendment

Amendment by Pub. L. 90–257 effective as of July 1, 1968, see section 208 of Pub. L. 90–257, set out as a note under section 352 of this title.

### Effective Date of 1946 Amendment

Amendment by act July 31, 1946, effective July 31, 1946, see section 401 of act July 31, 1946.

### Effect of Social Security Act Amendments

Act Aug. 10, 1939, ch. 666, title IX, § 901, 53 Stat. 1399, provided that: “Except as provided in section 906, no provision of this act shall be construed as amending or altering the effect of section 13(b), (c), (d), (e), or (f) of the Railroad Unemployment Insurance Act [this section].”

Act Aug. 10, 1939, ch. 666, title IX, § 906, 53 Stat. 1401, provided that: “If the Social Security Board finds with respect to any State that the first regular session of such State’s legislature which began after June 25, 1938, and adjourned prior to thirty days after the enactment of this act [Aug. 10, 1939] (1) had not made provision to authorize and direct the Secretary of the Treasury, prior to thirty days after the close of such session or July 1, 1939, whichever date is later, to transfer from its account in the Unemployment Trust Fund to the railroad unemployment insurance account in the Unemployment Trust Fund an amount equal to such State’s ‘preliminary amount,’ or to authorize and direct the Secretary of the Treasury, prior to thirty days after the close of such session or January 1, 1940, whichever date is later, to transfer from its account in the Unemployment Trust Fund to the railroad unemployment insurance account in the Unemployment Trust Fund an amount equal to such State’s ‘liquidating amount,’ or both; and (2) had not made provision for financing the administration of its unemployment-compensation law during the period with respect to which grants therefor under section 302 of the Social Security Act [section 502 of Title 42, The Public Health and Welfare] are required under section 13 of the Railroad Unemployment Insurance Act [this section] to be withheld by the Social Security Board, notwithstanding the provisions of section 13(d) of the Railroad Unemployment Insurance Act, the Social Security Board shall not begin to withhold from certification to the Secretary of the Treasury for payment to such State the amounts determined by it pursuant to section 302 of the Social Security Act [section 502 of Title 42] and to certify to the Secretary of the Treasury for payment into the railroad unemployment-insurance account the amount so withheld from such State, as provided in section 13 of the Railroad Unemployment Insurance Act [this section], until after the thirtieth day after the close of such State’s first regular or special session of its legislature which begins after the date of enactment of this act and after the Social Security Board finds that such State had not, by the thirtieth day after the close of such legislative session, authorized and directed the Secretary of the Treasury to transfer from such State’s account in the Unemployment Trust Fund to the railroad unemployment insurance account in the Unemployment Trust Fund such State’s ‘preliminary amount’ plus interest thereon at 2½ per centum per annum from the date the amount thereof is determined by the Social Security Board, and such State’s ‘liquidating amount’ plus interest thereon at 2½ per centum per annum from the date the amount thereof is determined by the Social Security Board. Notwithstanding the provisions of section 13(e) of the Railroad Unemployment Insurance Act [this section], any withdrawal by such State from its account in the Unemployment Trust Fund for purposes other than the payment of compensation of the whole or any part of amounts so withheld from certification with respect to such State pursuant to this act shall be deemed to constitute a breach of the conditions set forth in sections 303(a)(5) of the Social Security Act [section 503 of Title 42] and 1603(a)(4) of the Internal Revenue Code [section 1603 of former Title 26, Internal Revenue Code of 1939]. The terms ‘preliminary amount’ and ‘liquidating amount’, as used herein, shall have the meanings defined in section 13 of the Railroad Unemployment Insurance Act [this section].”

### Kentucky

Act Oct. 26, 1945, ch. 434, 59 Stat. 550, as amended by Reorg. Plan No. 2 of 1946, § 4, eff. July 16, 1946, 11 F.R. 7873, 60 Stat. 1095, provided that $1,260,000 should constitute the total amount withheld by the Federal Security Administrator under subsec. (d) of this section for payment for the administration of Kentucky’s Unemployment Compensation Law, KRS 341.010–341.990.

### Executive Documents

### Transfer of Functions

Functions of all other officers of Department of Labor and functions of all agencies and employees of Department, with exception of functions vested by Administrative Procedure Act (sections 551 et seq. and 701 et seq. of Title 5, Government Organization and Employees) in hearing examiners employed by Department, transferred to Secretary of Labor, with power vested in him to authorize their performance or performance of any of his functions by any officers, agencies, and employees of Department of Labor, by Reorg. Plan No. 6 of 1950, §§ 1, 2, 15 F.R. 3174, 64 Stat. 1263, set out in the Appendix to Title 5.

Functions of Federal Security Administrator with respect to unemployment compensation transferred to Secretary of Labor by Reorg. Plan No. 2 of 1949, § 1, eff. Aug. 19, 1949, 14 F.R. 5225, 63 Stat. 1065, set out in the Appendix to Title 5. Section 1 of Reorg. Plan No. 2 of 1949, also provided that functions transferred by this section shall be performed by Secretary of Labor, or subject to his direction and control, by officers, agencies, and employees of Department of Labor as he shall designate.

Social Security Board abolished and its functions and those of its chairman transferred to Federal Security Administrator to be performed by him or under his direction and control by such officers and employees of Federal Security Agency as designated, by Reorg. Plan No. 2 of 1946, eff. July 16, 1946, 11 F.R. 7873, 60 Stat. 1095, set out in the Appendix to Title 5. For transfer of personnel, property, records, and funds, see section 12 of the Reorganization Plan.