# Labor and Employment (GLE)

## Title 8. Unemployment Insurance

### Subtitle 4. Funds

#### Section 8-401

There is an Unemployment Insurance Fund.

#### Section 8-402

(a) The Secretary shall administer the Unemployment Insurance Fund.

(b) The Unemployment Insurance Fund shall be a special fund that is separate from State money.

#### Section 8-403

(a) The Unemployment Insurance Fund shall consist of:

  (1) contributions;

  (2) reimbursement payments collected under Subtitle 6, Part III of this title;

  (3) interest earned on money in the Fund;

  (4) property or securities acquired with money that belongs to the Fund;

  (5) money earned from the property or securities;

  (6) money received from the Federal Unemployment Account in the Unemployment Trust Fund in accordance with Title XII of the Social Security Act;

  (7) money credited to the State Unemployment Trust Fund Account under Sec. 903 of the Social Security Act; and

  (8) money received for the Fund from any other source.

(b) Money in the Unemployment Insurance Fund shall be commingled.

(c) The Unemployment Insurance Fund shall be used only for the purposes of this title.

#### Section 8-404

(a)

  (1) The State Treasurer is custodian of the Unemployment Insurance Fund.

  (2) The State Treasurer shall manage the Unemployment Insurance Fund in accordance with regulations that the Secretary adopts.

(b)

  (1) In the Unemployment Insurance Fund, the State Treasurer shall maintain as separate accounts:

    (i) a clearing account;

    (ii) an Unemployment Trust Fund Account; and

    (iii) a benefit account.

  (2) Under the direction of the Secretary, the Treasurer shall establish the benefit and clearing accounts in any financial institution in which the General Fund of the State may be deposited.

  (3) The Unemployment Trust Fund Account shall be the account of the State in the Federal Unemployment Trust Fund that is established and maintained in accordance with Sec. 904 of the Social Security Act notwithstanding any State law to the contrary that relates to administration, deposit, disbursement, or release of money in the custody of the State.

(c)

  (1) On receipt of any money payable to the Unemployment Insurance Fund, the Secretary shall ensure immediate deposit of the money in the clearing account as required by the State Treasurer.

  (2) Except for monetary penalties assessed under Sec. 8-809(b)(2) or Sec. 8-1305(b)(1) of this title, all money deposited in the clearing account for the payment of fines, interest, or penalties shall be paid to the Special Administrative Expense Fund.

  (3) Subject to the direction of the Secretary, the State Treasurer may pay refunds under Subtitle 6, Part V of this title from the clearing account.

(d)

  (1) Immediately after payments that are made under subsection (c)(2) and (3) of this section have cleared, the State Treasurer shall deposit all money that remains in the clearing account with the Secretary of the Treasury of the United States to the credit of the account of the State in the Unemployment Trust Fund that is established and maintained under Sec. 904 of the Social Security Act.

  (2) Money that is requisitioned from the account of the State in the Unemployment Trust Fund shall be placed in the benefit account only for use in accordance with paragraph (3) of this subsection.

  (3) Subject to Sec. 8-405 of this subtitle and in accordance with regulations that the Secretary adopts, money in the benefit account:

    (i) may be used to pay refunds under Subtitle 6, Part V of this title;

    (ii) shall be used to pay benefits; and

    (iii) may be used to pay administrative expenses incurred to carry out this title.

(e) The Unemployment Insurance Fund may not be used to pay a deposit insurance premium in a financial institution in which the benefit and clearing accounts are deposited.

#### Section 8-405

(a)

  (1) The Secretary shall requisition money that is credited to the account of the State in the Unemployment Trust Fund as the Secretary considers necessary for payment of benefits and refunds under this title for a reasonable period in the future.

  (2) The amount requisitioned under paragraph (1) of this subsection may not exceed the amount of money in the account.

  (3) Laws that require an appropriation or other formal release of money in the custody of State officers do not apply when money that was requisitioned under this subsection is used to pay a benefit or refund from the benefit account or a refund from the clearing account.

  (4) After expiration of the period for which a requisition is made under paragraph (1) of this subsection, if money remains unpaid or unclaimed in the benefit account the Secretary may:

    (i) deduct the amount of the money from estimates for a future requisition under paragraph (1) of this subsection; or

    (ii) redeposit the money in the account of the State in the Unemployment Trust Fund as provided under Sec. 8-404(d) of this subtitle.

(b)

  (1) If the General Assembly first enacts an appropriation in accordance with paragraph (4) of this subsection, the Secretary may requisition money that is credited under Sec. 903 of the Social Security Act to the account of the State in the Unemployment Trust Fund to pay expenses of administration of this title that will be incurred after enactment of the appropriation.

  (2) Money that is appropriated under this subsection:

    (i) shall be requisitioned as needed for payment of obligations incurred under the appropriation and shall be deposited in the Unemployment Insurance Administration Fund for use of that Fund;

    (ii) until used, shall remain part of the Unemployment Insurance Fund; and

    (iii) if not used, promptly shall be returned to the account of the State in the Unemployment Trust Fund.

  (3) The Secretary shall keep a separate record of the deposit, obligation, use, and return of money appropriated under this subsection.

  (4) An appropriation that is enacted under this subsection shall:

    (i) specify the purpose and amount of the appropriation;

    (ii) limit the period in which the appropriation is obligated to no more than 2 years after its enactment; and

    (iii) limit the amount of money that may be obligated during a 12-month period beginning on July 1 and ending on the next June 30 to an amount not exceeding the amount by which the total of the money credited to the account of the State in the Unemployment Trust Fund during that and the 34 preceding 12-month periods exceeds the total of the money obligated for payment of administrative expenses and paid for benefits during the same 35 12-month periods.

  (5) An amount that is credited to the State Unemployment Trust Fund Account under Sec. 903 of the Social Security Act and that is obligated for administration or paid out for benefits shall be charged against an equivalent amount that first is credited and that is not already charged.

  (6) An amount obligated for administration during a 12-month period may not be charged against an amount that was credited before the 34th 12-month period before that period.

#### Section 8-406

A check that the State Treasurer issues to pay benefits or refunds shall:

(1) be issued only on a warrant signed by the Secretary;

(2) bear the signature of the State Treasurer; and

(3) be countersigned by an authorized agent.

#### Section 8-407

(a) In accordance with and to obtain the advantages under Title XII of the Social Security Act the Secretary:

  (1) may apply for an advance to the Unemployment Insurance Fund; and

  (2) has responsibility for repayment of the advance.

(b) Interest required to be paid on an advance under subsection (a) of this section:

  (1) shall be paid in a timely manner; and

  (2) may not be paid directly or indirectly from contributions or from the Unemployment Insurance Fund.

#### Section 8-408

(a) The provisions of this Part I of this subtitle that relate to the Unemployment Trust Fund shall be effective only while:

  (1) the Unemployment Trust Fund continues to exist; and

  (2) the United States Secretary of the Treasury:

    (i) keeps in the Unemployment Trust Fund a separate account for the State from which no other state is allowed to make withdrawals; and

    (ii) credits to that Account the State's share of earnings of the Unemployment Trust Fund.

(b) If the Unemployment Trust Fund ceases to exist or the State Unemployment Trust Fund Account no longer is kept, money, property, and securities that belong to the Unemployment Trust Fund of the State shall be transferred to the State Treasury and deposited in the Unemployment Insurance Fund.

(c) If money is deposited in the Unemployment Insurance Fund under subsection (b) of this section the State Treasurer:

  (1) shall hold, invest, transfer, sell, deposit, and release money in the Unemployment Insurance Fund in a manner that is approved by the Secretary and is in accordance with this title;

  (2) shall invest the money in readily marketable bonds or other readily marketable interest bearing obligations of:

    (i) the United States;

    (ii) the State; or

    (iii) a political subdivision of the State;

  (3) shall make investments that are readily convertible into cash when cash is needed to pay benefits; and

  (4) may dispose of securities or other property bought with money that belongs to the Unemployment Insurance Fund only under the direction of the Secretary.

#### Section 8-409

This title does not grant an employer or employee any prior claim or right to money the employer pays into the Unemployment Insurance Fund.

#### Section 8-412

There is an Unemployment Insurance Administration Fund in the State Treasury.

#### Section 8-413

(a) The Secretary shall administer the Unemployment Insurance Administration Fund.

(b) The State Treasurer shall keep the Unemployment Insurance Administration Fund as a nonlapsing fund separate from other State money.

#### Section 8-414

(a) The Unemployment Insurance Administration Fund shall consist of:

  (1) money received from a unit of the federal government or of another state to pay for a facility or service provided to the unit;

  (2) money received under an insurance policy or surety bond or from any other source for loss that the Unemployment Insurance Administration Fund sustains or for damage to equipment or supplies bought with money from the Fund;

  (3) money transferred from the Special Administrative Expense Fund under Sec. 8-422(d) of this subtitle;

  (4) proceeds from the disposal of surplus equipment or supplies that were bought with money from the Fund; and

  (5) money received under the Wagner-Peyser Act for use in accordance with that Act and money for administration of this title that:

    (i) is appropriated by the General Assembly;

    (ii) subject to Sec. 8-405 of this subtitle, is received from a unit of the federal government; or

    (iii) is received from any other source.

(b)

  (1) Subject to Sec. 8-405 of this subtitle and paragraph (2) of this subsection, the Secretary shall use the Unemployment Insurance Administration Fund to pay the administrative costs of this title including the costs of:

    (i) office space in accordance with Sec. 8-421(c) of this subtitle; and

    (ii) the premium of any surety bond or insurance policy of the State Treasurer under Sec. 5-102.1 of the State Government Article for the Unemployment Insurance Administration Fund.

  (2) Money in the Unemployment Insurance Administration Fund received from a unit of the federal government or appropriated by the General Assembly to carry out this title may be used only for the purposes and in the amounts that the United States Secretary of Labor finds necessary to administer this title efficiently and properly.

#### Section 8-415

(a) The State Treasurer is custodian of the Unemployment Insurance Administration Fund.

(b)

  (1) Subject to Sec. 8-405(b) of this subtitle, money shall be deposited, administered, and disbursed from the Unemployment Insurance Administration Fund in the same manner as money is deposited and disbursed for other special funds in the custody of the State Treasurer.

  (2) Money in the Unemployment Insurance Administration Fund shall be secured in accordance with Sec. 6-209 of the State Finance and Procurement Article.

(c) Money in the Unemployment Insurance Administration Fund shall be available to the Secretary whenever it is needed for payment of expenses under this title.

(d) The Secretary may transfer money to the Special Administrative Expense Fund in accordance with Sec. 8-422(e) of this subtitle.

#### Section 8-416

(a) If the United States Secretary of Labor finds that money in the Unemployment Insurance Administration Fund received under Title III of the Social Security Act or the Wagner-Peyser Act has been lost or spent for purposes other than or in amounts exceeding those found necessary by the United States Secretary of Labor for the proper administration of this title, it is the policy of the State to replace the money with money that is appropriated from the General Fund of the State in accordance with subsection (b) of this section.

(b)

  (1) On receipt of notice that the United States Secretary of Labor has found that money from the Unemployment Insurance Administration Fund was misused, the Secretary promptly shall give the Governor notice of the money required for replacement.

  (2) At the earliest opportunity, the Governor shall submit to the General Assembly a request for appropriation of the money required.

(c) If money in the Unemployment Insurance Administration Fund is used for payment of costs of administration that are found not to be properly chargeable against federal money credited to the Fund, the Secretary shall use money in the Special Administrative Expense Fund to pay for those costs.

#### Section 8-419

There is a Special Administrative Expense Fund in the State Treasury.

#### Section 8-420

(a) The Secretary shall administer the Special Administrative Expense Fund.

(b)

  (1) The State Treasurer shall keep the Special Administrative Expense Fund as a nonlapsing fund.

  (2) Except as otherwise provided in this subtitle, money in the Special Administrative Expense Fund may not be transferred to any other fund.

#### Section 8-421

(a) The Special Administrative Expense Fund shall consist of money appropriated in the State budget from:

  (1) fines, interest, and other penalties collected under this title and paid from the clearing account under Sec. 8-404(c) of this subtitle;

  (2) money transferred from the Unemployment Insurance Administration Fund under Sec. 8-422 of this subtitle;

  (3) any voluntary contribution to the Special Administrative Expense Fund; and

  (4) administrative fee payments deposited into the Special Administrative Expense Fund in accordance with Sec. 8-605.1 of this title and any associated fines, penalties, and interest established by regulation.

(b)

  (1) Notwithstanding any other provision in this Part III of this subtitle, the Special Administrative Expense Fund may be used as a revolving account to cover costs that are proper under the law for which federal money is requested but not yet received, if the costs are charged against the federal money when received.

  (2) Subject to subsection (d) of this section, the Secretary:

    (i) shall use the Special Administrative Expense Fund for reimbursement of interest on contributions that is collected erroneously;

    (ii) shall use the Special Administrative Expense Fund to pay for costs of administration that are found to have been improperly charged against federal money credited to the Unemployment Insurance Administration Fund; and

    (iii) may use the Special Administrative Expense Fund:

      (1) for replacement within a reasonable time of any money that the State receives under Sec. 302 of the Social Security Act and that because of an action or contingency has been lost or has been used for purposes other than or in amounts exceeding those necessary for proper administration of this title;

      (2) for administrative expenses of the Division of Unemployment Insurance, and except as otherwise provided in this title, the Division of Workforce Development and Adult Learning, in accordance with subsection (c) of this section; and

      (3) to collect and administer the administrative fee established under Sec. 8-605.1 of this title.

(c)

  (1) Subject to subsection (d) of this section, the Secretary may use the Special Administrative Expense Fund for administrative expenses necessary to administer this title.

  (2) Administrative expenses include:

    (i) expenses related to the acquisition of office space required for effective administration of this title, subject to approval by the Board of Public Works;

    (ii) costs for furnishing, maintenance, repair, improvement, and enhancement of office space;

    (iii) the purchase, leasing, and maintenance of information technology systems, including equipment, programs, and services;

    (iv) the purchase, leasing, and maintenance of telecommunications systems, services, and equipment including connectivity costs and ongoing usage costs; and

    (v) other administrative costs that the Secretary determines are necessary to administer solely the provisions of this title.

(d)

  (1) The Special Administrative Expense Fund may not be used in a manner that would result in a loss of federal money that, in the absence of money from the Special Administrative Expense Fund, would be available to pay for administrative costs of this title.

  (2) The Secretary shall implement cost allocation plans as necessary under this Part III of this subtitle to comply with all applicable State and federal law.

#### Section 8-422

(a) The State Treasurer is custodian of the Special Administrative Expense Fund.

(b) Money in the Special Administrative Expense Fund shall be spent in accordance with appropriations in the State budget.

(c) Money in the Special Administrative Expense Fund shall be available to the Secretary whenever it is needed for use in accordance with this subtitle.

(d) When money is needed for reimbursement of interest and payment of administrative costs under Sec. 8-421(b)(2)(i) and (ii) of this subtitle, the Secretary may make the reimbursement or payment from money that:

  (1) is in the Special Administrative Expense Fund; or

  (2) the State Treasurer transfers for that purpose from the Special Administrative Expense Fund to the Unemployment Insurance Administration Fund.

(e) When the Secretary acquires, repairs, or maintains office space with money from the Special Administrative Expense Fund that will be reimbursed from federal funds, until the reimbursement, the Secretary may transfer from the Unemployment Insurance Administration Fund to the Special Administrative Expense Fund money in an amount that:

  (1) does not exceed the amount of federal funds specifically made available to the Secretary; and

  (2) equals the fair reasonable rental value of:

    (i) land or buildings that the Secretary acquires to use to carry out this title; or

    (ii) the proportionate amount of space that the Secretary uses in a building constructed by the State for another unit.

(f) On July 1 of each year, the Secretary shall direct the State Treasurer to transfer to the General Fund of the State the balance in the Special Administrative Expense Fund that:

  (1) the Secretary has not allocated or encumbered; and

  (2) exceeds $250,000.

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Md. Code Ann., Lab. & Empl. (as displayed at mgaleg.maryland.gov, October 16, 2026)