DIRECTIVE	:	EMPLOYMENT SERVICE PROGRAM LETTER NO. 11-99
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	GRACE A. KILBANE Administrator Office of Workforce Security
SUBJECT	:	Study of Employers' Use and Assessment of the Work Opportunity Tax Credit and the Welfare-to-Work Tax Credit

1. Purpose. To inform States of a planned study of employers' use and assessment of the Work Opportunity Tax Credit (WOTC) and the Welfare-to-Work (WtW) Tax Credit.

2. References. The Ticket to Work and Work Incentives Improvement Act of 1999 (P.L. 106-170, &#sect;505); Internal Revenue Code of 1986, &#sect;51 and &#sect;51A, as amended; and ETA Handbook No. 408, Second Edition, November 1998.

3. Background. The Employment and Training Administration (ETA) has the authority and responsibility for managing, providing oversight, and issuing basic operating guidelines for the tax credit programs.

4. Information. The services of WESTAT, an independent contractor, have been obtained by ETA to examine employers' use and their assessment of the tax credit programs. The study's findings will be used in efforts to increase employer use of tax credits and to improve program operations. Research will be in the form of in-depth interviews with 16 businesses. A summary report and 16 case studies will be produced which focus on quantitative workforce profiles of employers' use of the tax credits, employers' innovative practices and how nd why they use the tax credits, case histories of individual employees who have been hired under the tax credits, and discussion of the availability of data should a larger scale impact study of the tax credits be considered for the future.

   The work plan approved by ETA for this project calls for WESTAT to visit a total of 16 business establishments in five states. Corporate headquarters of some of these establishments will also be visited. Maryland will serve as the pretest State with a visit to a single firm. Based on what is learned during the pretest visit, the data collection instrument will-'be' revised and the first case study report prepared. Additional site visits will take place in California, Georgia, Missouri and Wisconsin, with individual case studies prepared at the conclusion of each visit.

   Interviews in California, Georgia, Missouri and Wisconsin will be clustered in and near a single city. The designation of this area will be made in consultation with the appropriate State Employment Security Agency (SESA). In the next few months, SESAs in these States will be asked by WESTAT for names of employers that use the tax credits and for suggested interview candidates. In consultation with the relevant ETA Regional Office and with guidance from the SESA, each site visit team will arrange the itinerary for visiting employers.

   ETA's intention is to use an interview protocol that contains both closed-ended and open-ended questions. On December 7, 1999, ETA published a Notice in the Federal Register (64 FR 68387) which informed interested individuals on how to obtain a copy of the survey instrument for review. The Notice provides a 60-day period for public comment on the proposed information collection request. Written comments will be accepted on or before February 7, 2000. A copy of that Notice is attached. It may also be accessed on the Internet through the U.S. Government Printing Office www.access.gpo.gov/su docs/

5. Action Required. SESA Administrators are requested to cooperate with representatives from WESTAT who will be contacting them about the information needed to conduct the survey. SESA administrators are also asked to report any problems or concerns related to the study to the appropriate ETA Regional Office.

6. Inquiries. General questions and comments should be directed to George Shephard by email at gshephard@doleta.gov or by phone at 202-219-9092, ext. 139.

7. Attachment. Federal Register: December 7, 1999 (Volume 64, Number 234, Pages 68387-68388).