CREDITS ALLOWABLE TO CERTAIN EMPLOYERS.

SEC. 123. CREDITS ALLOWABLE TO CERTAIN EMPLOYERS. Section 3305 of the Internal Revenue Code of 1954 is amended by adding at the end thereof the following new subsection: “(j) Dental of Credits in Certain Cases.— Any person required, pursuant to the permission granted by this section, to make contributions to an unemployment fund under a State unemployment compensation law approved by the Secretary of Labor under section 3304 shall not be entitled to the credits permitted, with respect to the unemployment compensation law of a State, by subsections (a) and (b) of section 3302 against the tax imposed by section 3301 for any taxable year after December 31, 1971, if, on October 31 of Such taxable year, the Secretary of Labor certifies to the Secretary his finding, after reasonable notice and opportunity for hearing to the State agency, that the unemployment compensation law of such State is inconsistent with any one or more of the conditions on the basis of which such permission is granted or that, in the application of the State law with 84 Stat. 703respect to the 12-month period ending on such October 31, there has been a substantial failure to comply with any one or more of such conditions. For purposes of section 3310, a finding of the Secretary of Labor under this subsection shall be treated as a finding under section 3304 (c).”