[Federal Register: December 5, 2003 (Volume 68, Number 234)]
[Notices]
[Page 68122-68123]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05de03-104]
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DEPARTMENT OF LABOR
Employment and Training Administration
Workforce Security Programs: Training and Employment Guidance
Letter Interpreting Federal Law
The Employment and Training Administration interprets federal law
requirements pertaining to unemployment compensation (UC) and public
employment services (ES). These interpretations are issued in Training
and Guidance Letters (TEGLs) to the State Workforce Agencies. The TEGL
described below is published in the Federal Register in order to inform
the public.
TEGL 18-01, Change 1
TEGL 18-01, Change 1, using a Q & A format, answers additional
questions related to the appropriate uses of the Reed Act distribution
made on March 13, 2002.
Dated: December 1, 2003.
Emily Stover DeRocco,
Assistant Secretary of Labor.
Employment and Training Administration Advisory System, U.S. Department
of Labor, Washington, DC 20210
CLASSIFICATION: Reed Act
CORRESPONDENCE SYMBOL: DL
DATE: March 19, 2003
Training and Employment Guidance Letter No. 18-01Change 1
To: All State Workforce Liaisons,Allstate Workforce
Agencies,Allstate Worker Adjustment Liaisons,Allone-Stop Center
System Leads
From: Emily Stover DeRocco, Assistant Secretary
Subject: Reed Act--Questions and Answers
1. Purpose. To answer questions related to the use of Reed Act
funds that have arisen since the issuance of Training and Employment
Guidance Letter (TEGL) 18-01.
2. References. Section 209 of the Temporary Extended
Unemployment Compensation Act of 2002 (TEUCA), which is Title II of
the Job Creation and Worker Assistance Act of 2002, P.L. No. 107-
147, signed by the President on March 9, 2002; Title IX of the
Social Security Act (SSA); the Federal Unemployment Tax Act (FUTA);
the Wagner-Peyser Act; TEGL 18-01 (67 FR 34730 (May 15, 2002)); TEGL
24-01; and Unemployment Insurance Program Letter (UIPL) 39-97 (62 FR
63960 (December 3, 1997)), UIPL 39-97, Change 1 (January 16, 2002)
and UIPL 20-02 (April 4, 2002).
3. Background. TEGL 18-01 described the permissible uses of the
$8 billion Reed Act distribution that was made to the states'
accounts in the Unemployment Trust Fund on March 13, 2002. In
general, this distribution is available for the payment of
unemployment compensation (UC) and the administration of state UC
laws and public employment offices.
RESCISSIONS: None
EXPIRATION DATE: Continuing
Since the issuance of TEGL 18-01, the Department has received
questions concerning permissible uses of Reed Act funds. In
addition, the Department has reviewed state legislative proposals
appropriating the Reed Act funds, some of which raised issues of
consistency with federal law. The following Questions and Answers
address these matters.
4. Action. State administrators should distribute this advisory
to appropriate staff. States must adhere to the requirements of
Federal law that are contained in this advisory.
5. Inquiries. Questions should be addressed to your Regional
Office.
6. Attachment.
Reed Act Distributions Under the Temporary Extended Unemployment
Compensation Act of 2002--Questions and Answers
Attachment--Reed Act Distributions Under the Temporary Extended
Unemployment Compensation Act of 2002--Questions and Answers
1. Question: Since my state's legislature meets in session only
for short periods each year, my state's law delegates certain
legislative functions, including certain appropriation functions, to
the Governor. May the Governor ``appropriate'' Reed Act funds under
this delegation?
Answer: No. Question and Answer 9 in Attachment I to TEGL 18-01
explains that Section 903(c)(2), SSA, provides that a state may use
Reed Act funds for administrative purposes only ``pursuant to a
specific appropriation made by the legislative body of the State.''
(Emphasis added.) That section of the SSA goes on to provide that a
withdrawal may be made for the payment of administrative expenses
``if and only if'' the appropriation law meets certain requirements.
Among these requirements is that ``the purposes and the amounts''
must be ``specified in the law making the appropriation.'' Senate
Report No. 1621 elaborated on the appropriation requirement. It
states that a state may use Reed Act funds for administrative
expenses only ``through a special appropriation act of its
legislature'' and that such use of Reed Act funds is ``subject to
rigid control by the state legislature (which control is specified
in the bill in detail).'' (Emphasis added. 1954 U.S.C.C.A.N. 2909,
2910, 2914.)
2. Question: May Reed Act funds be used for administrative
expenses incurred before the date of enactment of the state
appropriations?
Answer: No. Under Section 903(c)(2)(C), SSA, a state's Reed Act
appropriation law must provide that ``the expenses are incurred
after'' the date of the enactment of the appropriation.
3. Question: May my state use Reed Act funds to deliver
employment services outside its One-Stop system?
Answer: In general, no. Reed Act funds may be used for expenses
incurred by a state ``for the administration of its unemployment
compensation law and public employment offices.'' As noted in TEGL
18-01, ``administration of * * * public employment offices'' means
``any function fundable under the Wagner-Peyser Act.'' Section 7(e),
Wagner-Peyser, provides that ``all job search, placement,
recruitment, labor employment statistics, and other labor exchange
services authorized under subsection (a) shall be provided,
consistent with the other requirements of this Act, as part of the
one-stop delivery system established by the state.''
Section 7(b)(2), Wagner-Peyser, does authorize provisions of
services outside the One-Stop. However, these services may be
provided only to ``groups with special needs, carried out pursuant
to joint agreements between the employment service and the
appropriate local workforce investment board and chief elected
official or officials or other public agencies or private nonprofit
organization.'' (Emphasis added.) Thus, for Reed Act purposes,
moneys may be expended outside the one-stop system on these groups
with special needs only if there is an agreement with the state's ES
agency.
Note that the state's share of the $100 million Reed Act
distributions made in each of fiscal years 2000 through 2002 may be
used only for UC administration. (See Question and Answer 20 in
Attachment I to TEGL 18-01.)
4. Question: May my state legislature appropriate Reed Act funds
to an agency other than the state agency (or agencies) administering
the UC program and the employment service (ES) program?
Answer: No. While nothing prohibits the UC or ES agencies from
providing Reed Act funds to other agencies to perform permissible
Reed Act activities (e.g., information technology services
supporting the UC and ES agencies), the appropriation must be made
to the UC and/or ES agency.
The intent behind the Reed Act was to allow states to supplement
their federal UC and ES grants. (See, for example, H. Rep. 21 (1954
U.S.C.C.A.N. 2909-2911); H. Rep. 251, 107th Cong. 1st Sess. 58-59.)
Therefore, just as the state agency administering the state's UC law
receives the federal UC administrative grant, the same agency is to
receive Reed Act funds for administering the UC law. Similarly, just
as the state agency administering the state's ES program receives
the Wagner-Peyser grant, the same agency is to receive Reed Act
funds for administering its public employment offices.
Appropriating Reed Act funds only to the state UC and/or ES
agencies, which have expertise in determining what are permissible
UI and Wagner-Peyser Act functions, helps assure that Reed Act funds
are used only for permissible purposes. This in turn will help avoid
federal questions regarding use.
If the state legislature appropriated Reed Act funds to an
agency other than the state agency administering the state UC or ES
programs prior to the effective date of this TEGL, the Department
will not raise any issues with respect to the appropriation to such
other agency. However, the state UC and/or ES agencies, as
appropriate, should work with such other state agency to assure that
Reed Act funds are used consistently with federal law requirements.
5. Question: May Reed Act funds be used to pay travel expenses
incurred by trainees?
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Answer. Only to the same extent Wagner-Peyser Act funds may be
used for this purpose. Generally, Wagner-Peyser Act funds may not
pay for transportation costs, but there are two exceptions:
[sbull] Section (7)(b)(2) of the Wagner-Peyser Act discusses
``services for groups with special needs, carried out pursuant to
joint agreements between the employment service and the appropriate
workforce investment board and chief elected official or officials
or other public agencies or private nonprofits organization.'' Costs
of transporting members of such groups may be funded from Reed Act
funds.
[sbull] Section 7(b)(3), Wagner-Peyser, identifies ``the extra
costs of exemplary models for delivering'' Wagner-Peyser services as
an allowable use of Wagner-Peyser funds. If transportation were part
of an exemplary service delivery model for such services, it may be
funded from Reed Act.
In both cases, transportation costs would be allowable only if
the transportation involves transporting customers to enable them to
access and receive employment services funded under the Wagner-
Peyser Act or the Reed Act.
[FR Doc. 03-30249 Filed 12-4-03; 8:45 am]
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