((a)) ** Reservations for eligible States and units of local government**

((1)) The Secretary shall reserve one-third of the amounts appropriated pursuant to authorization under for each calendar quarter for the purpose of making payments to eligible State governments under subsection (b).

((2)) The Secretary shall reserve two-thirds of such amounts for the purpose of making payments to eligible units of local government under subsection (c).

((b)) ** State allocation; percentage; definitions**

((1)) The Secretary shall allocate from amounts reserved under subsection (a)(1) an amount for the purpose of making payments to each State equal to the total amount reserved under subsection (a)(1) for the calendar quarter multiplied by the applicable State percentage.

((2)) For purposes of this subsection, the applicable State percentage is equal to the quotient resulting from the division of the product of—

((A)) the State excess unemployment percentage, multiplied by

((B)) the State revenue sharing amount by the sum of such products for all the States.

((3)) For the purposes of this section—

((A)) the term “State” means each State of the United States;

((B)) the State excess unemployment percentage is equal to the difference resulting from the subtraction of 4.5 percentage points from the State unemployment rate for that State but shall not be less than zero;

((C)) the State unemployment rate is equal to the rate of unemployment in the State during the appropriate calendar quarter, as determined by the Secretary of Labor and reported to the Secretary; and

((D)) the State revenue sharing amount is the amount determined under sections 6705–6707(a) of title 31  for the most recently completed entitlement period, as defined under .

((c)) ** Local government allocation; percentage; definitions; special limitation**

((1)) The Secretary shall allocate from amounts reserved under subsection (a)(2) an amount for the purpose of making payments to each local government, subject to the provisions of paragraph (4), equal to the total amount reserved under such subsection for calendar quarter multiplied by the local government percentage.

((2)) For purposes of this subsection, the local government percentage is equal to the quotient resulting from the division of the product of—

((A)) the local excess unemployment percentage, multiplied by

((B)) the local revenue sharing amount, by the sum of such products for all local governments.

((3)) For purposes of this subsection—

((A)) the local excess unemployment percentage is equal to the difference resulting from the subtraction of 4.5 percentage points from the local unemployment rate, but shall not be less than zero;

((B)) the local unemployment rate is equal to the rate of unemployment in the jurisdiction of the local government during the appropriated calendar quarter, as determined or assigned by the Secretary of Labor and reported to the Secretary (in the case of a local government for which the Secretary of Labor cannot determine a local unemployment rate, he shall assign such local government the local unemployment rate of the smallest unit or subunit of local government for which he has determined a local unemployment rate and within the jurisdiction of which such local government is located, unless—

((i)) the Governor of the State in which such local government is located has provided the Secretary of Labor with a local unemployment rate for such local government, and

((ii)) the Secretary of Labor finds that such local unemployment rate provided by the Governor has been determined in a manner consistent with the procedures and methodologies used by the Secretary of Labor in determining local unemployment rates,

((C)) the local revenue sharing amount is the amount determined under sections 6701(a)(5), (7), (b)–(d), and 6708–6712 of title 31  for the most recently completed entitlement period, as defined under ;

((D)) the term “local government” means the government of a county, municipality, township, or other unit of government below the State which—

((i)) is a unit of general government (determined on the basis of the same principles as are used by the Bureau of the Census for general statistical purposes), and

((ii)) performs substantial governmental functions. Such term includes the District of Columbia and also includes the recognized governing body of an Indian tribe or Alaskan Native village which performs substantial governmental functions. Such term does not include the government of a township area unless such government performs substantial governmental functions.

((4)) If the amount which would be allocated to any unit of local government under this subsection is less than $100, then no amount shall be allocated for such unit of local government under this subsection.