(a) There is hereby created a special fund separate and apart from all public moneys or funds of this Commonwealth to be known as the Unemployment Compensation Fund. All contributions paid by employers and employes, together with penalties and interest thereon, received or collected by the department from employers under the provisions of this act, except contributions which are to be paid into the Reemployment Fund and the Service and Infrastructure Improvement Fund as provided in section 301.4(e),¹ such penalties and interest which are to be paid into the Special Administration Fund as provided in section 601.1² and taxes collected under section 301.6 of this act³ which are to be paid into the Debt Service Fund as provided in section 601.2,⁴ shall be paid into the Unemployment Compensation Fund, and shall be credited by the department to a ledger account to be known as the Employers' Contribution Account. Contributions which are to be paid into the Reemployment Fund and the Service and Infrastructure Improvement Fund as provided in section 301.4(e), interest and penalties which are to be credited to the Special Administration Fund and taxes collected under section 301.6 may be temporarily held in the Employers' Contribution Account solely for clearance purposes prior to transfer to the Reemployment Fund, the Service and Infrastructure Improvement Fund, the Special Administration Fund or the Debt Service Fund and while so held in the Employers' Contribution Account shall not be deemed a part of the Unemployment Compensation Fund. All moneys from time to time received and credited to the Employers' Contribution Account (exclusive of refunds made under section 311,⁵ contributions transferred to the Reemployment Fund and the Service and Infrastructure Improvement Fund pursuant to section 301.4(e) and interest and penalties transferred as herein provided to the Special Administration Fund and taxes transferred to the Debt Service Fund) shall be paid promptly by the department into the Unemployment Compensation Fund, except as otherwise provided in section 605 of this act.⁶ All moneys credited to this Commonwealth's account in the Unemployment Compensation Fund pursuant to section 903 of the Federal Social Security Act (42 U.S.C. § 1103) shall be included in the Unemployment Compensation Fund.

(b) As often as may be necessary, the department shall requisition from the Unemployment Trust Fund such amounts as shall be necessary to provide adequate funds for the payment of compensation as provided in this act, except that moneys credited to this Commonwealth's account pursuant to section 903 of the Federal Social Security Act as amended shall be used exclusively as provided in section six hundred two point three.⁷ Upon receipt of such requisitioned funds, the department shall deposit them into the Unemployment Compensation Fund to the credit of a ledger account, to be known as the Compensation Account, and shall expend such moneys solely for the payment of compensation, as provided by this act. All moneys to the credit of the Compensation Account shall be mingled and undivided. The department shall pay all compensation authorized by this act out of moneys standing to the credit of the Compensation Account.

(c) Notwithstanding any other provisions of this section, the department shall at such time or times, when the amount of moneys credited to the Commonwealth of Pennsylvania in the Unemployment Compensation Fund exceed the average annual total benefit payout for the immediate prior five (5) years, transfer such excess to the United States Treasury to repay; and reduce any outstanding Federal unemployment loan debt, and at such other time or times as the secretary with the approval of the Governor may determine, is hereby authorized to requisition from the Unemployment Compensation Fund and pay into the United States Treasury an amount which, in the aggregate, is equal to the balance of any loan made to this Commonwealth under the provisions of Title XII of the Social Security Act,⁸ as amended. Such requisition and transfer need not be in a lump sum but may be made according to a plan entered into between the department and the United States Treasury and for that purpose the authority hereinabove contained shall be deemed continuous during the term of such agreement.