(a) There is hereby established in the Treasury of the Virgin Islands a special fund, separate and apart from all public money or funds of the Virgin Islands, to be known as the Penalty and Interest Fund. This fund shall consist of all interest and penalties collected under the provisions of this chapter after the date the Secretary of Labor of the United States approves the Virgin Islands Unemployment Insurance Act under section 3304(a) of the United States Internal Revenue Code of 1954, of all moneys which pursuant to the provisions of section 311(e)(2) of this chapter are transferred to this fund from the Unemployment Insurance Administration Fund, and of all moneys otherwise due to this fund pursuant to the provisions of section 311(e)(2) of this chapter.
(b) All interest and penalty payments, as well as all other payments referred to in section 311(e)(2) of this chapter, collected pursuant to the provisions of this chapter on and after the date specified in subsection (a) of this section may be deposited in the clearing account of the Unemployment Fund for clearance only and shall not become a part of said fund. After clearance, the moneys derived from such payments shall be deposited in the Penalty and Interest Fund. All moneys in the Penalty and Interest Fund shall be deposited, administered and disbursed in the same manner as is provided by law for other special funds in the Treasury of the Virgin Islands, except that moneys in this fund shall not be commingled with other funds of the Government of the Virgin Islands, but shall be maintained in a separate account on the books of the depository bank. The Commissioner of Finance shall be the custodian of, and shall be liable on his official bond for the faithful performance of his duties in connection with, the Penalty and Interest Fund. Such liability on the official bond shall exist in addition to the liability upon any other separate bond which may be given by the Commissioner. All sums recovered on any such official bond for losses sustained by the Penalty and Interest Fund shall be deposited in this fund. The premium for such official bond shall be paid from the moneys in the Penalty and Interest Fund. Balances to the credit of the Penalty and Interest Fund shall be continuously available to the Commissioner of Labor for expenditures consistent with the provisions of this section. Whenever the Commissioner of Finance determines that the amount in the Penalty and Interest Fund is in excess of the amount necessary for current needs and those in the immediate future, he shall transfer the excess amount to the Unemployment Fund.
(c) The moneys in the Penalty and Interest Fund may be used by the Commissioner of Labor for:
(1) Any purpose which is necessary to fulfill the objectives of this chapter or chapter 7 of this title and for which Federal grants or other funds are not available.
(2) Payment of any expenses incurred in the administration of this chapter or chapter 7 of this title which are not properly and validly chargeable against Federal granted funds or other funds received for, or in, the Employment Security Administration Fund.
(3) Replacement, within a reasonable time and subject to the provisions of section 311 of this chapter, of any moneys received by the Virgin Islands Employment Security Agency in the form of grants from the Federal Government for administrative expenses which because of any action or contingency have been lost or have been expended for purposes other than, or in amounts in excess of, those considered by the Secretary of Labor of the United States to be necessary for the proper and efficient administration of this chapter or chapter 7 of this title.
(4) A revolving fund to cover expenditures under this chapter and chapter 7 of this title for which Federal funds have been duly requested but not yet received, subject to the replacement of the amount expended when such funds are received.
(5) Refunds of erroneously collected interest and penalties, subject to the provisions of section 309(d)(1) of this chapter.