TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 23-02

Employment and Training Administration
Advisory System

U.S. Department of Labor
Washington, D.C. 20210

CLASSIFICATION
WIA/Wagner-Peyser/Reemployment Services/WOTCWtW

CORRESPONDENCE SYMBOL
OWI

DATE
April 1, 2003

TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 23-02

TO: ALL STATE WORKFORCE AGENCIES
ALL STATE WORKFORCE LIAISONS

/S/

FROM:	EMILY STOVER DeROCCO Assistant Secretary

SUBJECT:

FY 2003 Congressional Rescissions for WIA Adults and Dislocated Workers; Workforce Investment Act (WIA) Allotments for Program Year (PY) 2003; Wagner-Peyser Act Final Allotments for PY 2003; Reemployment Services Allotments for PY 2003; and Work Opportunity and Welfare-to-Work Tax Credit Allotments for FY 2003

1. Purpose. To provide states and outlying areas with FY 2003 Congressional Rescissions for WIA Adults and Dislocated Workers; WIA Title I Adults and Dislocated Workers and Youth Activities allotments for PY 2003; final allotments for PY 2003 public employment service (ES) activities, as required by Section 6(b)(5) of the Wagner-Peyser Act, as amended; Reemployment Services allotments for PY 2003; Work Opportunity and Welfare-to-Work (WtW) Tax Credit allotments for FY 2003.

2. References. Wagner-Peyser Act, as amended (29 U.S.C. 49 et seq.); Workforce Investment Act of 1998 (WIA), (29 U.S.C. 2801 et seq.) P.L. 106-113; Planning Guidance and Instructions for Submission of the Strategic Five-Year State Plan for Title I of the Workforce Investment Act of 1998 and the Wagner-Peyser Act (64 F.R. 9402 (February 25, 1999); State Unified Planning Guidance (65 F.R. 2464 (January 14, 2000); Training and Employment Guidance Letter (TEGL) No. 11-98; TEGL 3-99, dated January 31, 2000; TEGL 12-00, dated March 6, 2001; TEGL 22-00, dated May 23, 2001; and TEGL 13-01, dated March 15, 2002.

3. Background. The WIA allotments, the Wagner-Peyser Act final allotments, the Reemployment Services allotments, the Work Opportunity and WtW Tax Credit allotments are part of the Fiscal Year 2003 funds appropriated in the Consolidated Appropriations Resolution, 2003, Public Law 108-7, signed into law February 20, 2003. This appropriation also incorporated an across-the-board reduction of 0.65 percent to all FY 2003 discretionary programs, including FY 2003 advance funds for the Adults and Dislocated Workers programs appropriated in the FY 2002 appropriation. Attachments III-A and IV-A reflect the distribution of the rescission to FY 2003 advance funds.

RESCISSIONS	EXPIRATION DATE
	Continuing

The WIA allotments for states are based on formulas defined in the Act (see Attachment I for WIA and Wagner-Peyser formula descriptions). The WIA allotments for outlying areas are based on a discretionary formula as authorized under WIA Title I. These allotments and descriptions of the allotment formulas will be published in the Federal Register on April 1, 2003. Comments are being invited from the public only on the formula used to distribute outlying areas funds.

4. State Youth Activities Funds: Title I--Chapter 4--Youth Activities.

State Allotments.Attachment II contains a breakdown of the WIA Youth Activities program allotments by state for PY 2003 and provides a comparison of these allotments to PY 2002.

The total amount available for states was below the required $1 billion threshold specified in Section 127(b)(1)(C)(iv)(IV); therefore, unlike in PY 2002, the WIA additional minimum provisions were not applied: (1) the minimum 1998 dollar (not percentage) (JTPA II-B and II-C combined) allotment, and (2) the two-tier small state minimum allotment (.3 percent of first $1 billion and .4 percent of amount over $1 billion). Instead, as required by WIA, the JTPA section 202(a)(3) (as amended by section 701 of the Job Training Reform Amendments of 1992) minimums of 90 percent hold-harmless of the prior year allotment percentage and 0.25 percent state minimum floor were used. Also, as required by WIA, the provision applying a 130 percent stop-gain of the prior year allotment percentage was used. The three formula factors required in WIA use the following data for the PY 2003 allotments:
1. the number of unemployed for areas of substantial unemployment (ASU) is the average for the 12-month period, July 2001 through preliminary June 2002;
2. the number of excess unemployed individuals or the ASU excess (depending on which is higher) is the average for the same 12-month period used for ASU unemployed data; and
3. the number of economically disadvantaged youth (age 16 to 21, excluding college students and military) is from the 1990 Census. (2000 Census data are expected to be available for use for the PY 2004 allotment calculations.)
PY 2003 Funding Agreement/Notice of Obligations (NOOs). Pursuant to WIA section 189(g)(1)(B), youth program allocations will be issued on April 1, 2003. In preparation for this action, funding documents have been transmitted to the State WIA signatory officials for their completion and return to DOL, for execution by the ETA Grant Officer on April 1, 2003.
Within-State Allocations. Youth Activities funds are to be distributed among local workforce investment areas (subject to reservation of up to 15 percent for statewide workforce investment activities) in accordance with the provisions of WIA section 128 and according to the approved state plan.
Transfers of Funds. There is no authority for local workforce investment areas to transfer funds to or from the Youth Activities program.
Reallotment of Funds. Reallotment of Youth Activities formula funds, as provided for by WIA section 127(c), will be based on completed program year financial reports submitted by the states. Reallotment of funds among states under WIA will occur during PY 2003, based on obligations made during PY 2002 (20 CFR §667.150 of the WIA interim final regulations). There was no recapture/reallotment of WIA youth funds in PY 2002.

5. State Adult Employment and Training Activities Funds: Title I--Chapter 5--Adult and Dislocated Worker Employment and Training Activities.

A. State Allotments. Attachment III-B shows the PY 2003 Adult Employment and Training Activities allotments and comparison to PY 2002 allotments by state.

As in the Youth Activities program, the WIA minimum provisions were not applied for the PY 2003 Adult Activities allotments because the total amount available for the states was below the $960 million threshold required for Adults in Section 132(b)(1)(B) (iv)(IV). Instead, as required by WIA, the JTPA section 202(a)(3) (as amended by section 701 of the Job Training Reform Amendments of 1992) minimums of 90 percent hold-harmless of the prior year allotment percentage and 0.25 percent state minimum floor were used. Also, like the Youth Activities program, a provision applying a 130 percent stop-gain of the prior year allotment percentage was used. The three formula factors use the same data as were used for the Youth Activities formula, except that data for the number of economically disadvantaged adults (age 22 to 72, excluding college students and military) from the 1990 Census were used. (2000 Census data are expected to be available for use for the PY 2004 allotment calculations.)

B. NOO's. For the FY 2003 rescission applied to the funds appropriated for PY 2002, NOO's under the PY 2002 WIA grant agreement will be issued deobligating the required amounts (see Attachment III-A). For PY 2003, Congress appropriated funds for this program in two portions: $186,778,000 available for obligation on July 1, 2003 (PY 2003), and $712,000,000 available for obligation on October 1, 2003 (FY 2004). Allotments to states are prorated based on these amounts and two NOO's will be issued: one for July 1, 2003, under the PY 2003 WIA grant agreement, and the other for October 1, 2003 (also under the PY 2003 WIA grant agreement) (see Attachment III-C).

C. Within-State Allocations. Adult Activities funds for both the FY 2003 rescissions and PY 2003 allotments are to be distributed among local workforce investment areas (subject to reservation of up to 15 percent for statewide workforce investment activities) in accordance with the provisions in WIA Section 133 and according to the approved state plan.

D. Transfers of Funds. WIA section 133(b)(4) provides the authority for workforce investment areas, with approval of the Governor, to transfer up to 20 percent of the Adult Activities funds to Dislocated Workers Activities, and up to 20 percent of Dislocated Workers Activities funds to Adult Activities. The 2003 appropriation enacted by Congress raised these transfer limits to 30 percent, effective with PY 2003 funds.

E. Reallotment of Funds. Reallotment of Adult Activities formula funds, as provided for by WIA section 132(c), will be based on completed program year financial reports submitted by the states. Reallotment of funds among states under WIA will occur during PY 2003 based on obligations made during PY 2001 (20 CFR §667.150 of the WIA interim final regulations). There was no recapture/reallotment of WIA Adult Activities funds in PY 2002.

6. State Dislocated Worker Employment and Training Funds: Title I--Chapter 5--Adult and Dislocated Worker Employment and Training Activities.

A. State Allotments. Attachment IV-B shows the PY 2003 Dislocated Worker Activities fund allotments by state.

The three formula factors required in WIA use the following data for the PY 2003 allotments:

number of unemployed is the average for the 12-month period, October 2001 through September 2002;
number of excess unemployed is the average for the 12-month period, October 2001 through September 2002; and
number of long-term unemployed is the average for calendar year 2001.

B. NOO's. For the FY 2003 rescission applied to the funds appropriated for PY 2002, NOO's under the PY 2002 WIA grant agreement will be issued deobligating the required amounts (see Attachment IV-A). For PY 2003, Congress appropriated funds for this program in two portions, $371,340,495, available for obligation on July 1, 2003 (PY 2003), and $1,060,000,000, available for obligation on October 1, 2003 (FY 2004). Allotments to states will be prorated based on these amounts and two NOO's will be issued: one for July 1, 2003, under the PY 2003 WIA grant agreement, and the other for October 1, 2003, (also under the PY 2003 WIA grant agreement) (see Attachment IV-C).

C. Within-State Allocations. Dislocated Worker Activities funds for both the FY 2003 rescissions and PY 2003 allotments are to be distributed among local workforce investment areas (subject to reservations for Rapid Response and statewide workforce investment activities) in accordance with the provisions in WIA section 133 and according to the approved state plan.

D. Transfers of Funds. WIA section 133(b)(4) provides the authority for workforce investment areas, with approval of the Governor, to transfer up to 20 percent of the Adult Activities funds to Dislocated Workers Activities, and up to 20 percent of Dislocated Workers Activities funds to Adult Activities. The 2003 appropriation enacted by Congress raised these transfer limits to 30 percent, effective with PY 2003 funds.

E. Reallotment of Funds. Reallotment of Dislocated Worker Activities formula funds, as provided for by WIA section 132(c), will be based on completed program year financial reports submitted by the states. Reallotment of funds among states under WIA will occur during PY 2003 based on obligations made during PY 2002 (section 667.150 of the WIA interim final regulations). A recapture/reallotment of WIA Dislocated Workers Activities funds for PY 2002 will be issued shortly.

7. Wagner-Peyser Act Grants to States Final Allotments.Attachment V shows the ES final allotments for PY 2003. These final allotments have been produced using the formula set forth at section 6 of the Wagner-Peyser Act (29 U.S.C. 49e). They are based on each state's share of monthly averages of the civilian labor force (CLF) and unemployment for calendar year 2002, as required by the Wagner-Peyser Act.

Under Wagner-Peyser Act section 7(b), ten percent of the total sums allotted to each state shall be reserved for use by the Governor to provide performance incentives for public ES offices, services for groups with special needs, and for the extra costs of exemplary models for delivering job services.

8. Reemployment Services.The allotment figures for each state for PY 2003 are listed in Attachment VI. The funds were distributed using the following administrative formula: each state received $215,000, with the remaining funds distributed using each state's share of first payments for FY 2002 to UI claimants. Guidance on the use of these funds will be provided in a separate TEGL.

9. Work Opportunity and Welfare to Work Tax Credit Program Grants to States.Attachment VII shows the FY 2003 Work Opportunity and Welfare to Work Tax Credit grants by state. After reserving $584,200 for postage and $20,000 for the Virgin Islands, funds are distributed to states by administrative formula with a $64,000 minimum allotment and a 95% stop-loss/120% stop-gain from the prior year allotment share percentage. The FY 2003 allotment formula is as follows:

Guidance on the use of these funds will be provided in a separate TEGL.

10. Reporting. For the WIA programs, states will be required to submit one WIA quarterly financial status report for each of the fund sources received (including a separate report for each of the funding periods for Adults and Dislocated Workers--July 1 funds and October 1 funds). This report will be divided into six separate sub-reports detailing statewide activities; statewide rapid response (Dislocated Workers Activities); local area administration; local area Youth program activities; local area Adult program activities; and local area Dislocated Workers program activities.

The Employment and Training Administration plans to implement in 2004 a set of common performance measures for job training and employment programs, including WIA adults, dislocated worker, youth and Wagner-Peyser Act programs. It is anticipated that the Department will be issuing new reporting instructions for reporting on WIA common performance measures by the fall of 2003. These common measures are part of the President's Management Agenda to integrate budget and performance and emphasize program effectiveness. The common measures, to be implemented in 31 training and employment programs administered by six federal agencies, will provide a means to compare outcomes of these various training and employment programs. The measures consist of four performance indicators for all programs serving adults -entered employment, retention, earnings increase, and efficiency - and four indicators for all youth programs - placement in employment or education, attainment of a degree or certificate, literacy and numeracy gains, and efficiency.

11. Inquiries. Questions regarding these allotments, final allotments and planning requirements may be directed to the appropriate Regional Office. Information may also be found at the website - http://www.doleta.gov.

12. Attachment.



TO:	ALL STATE WORKFORCE AGENCIES ALL STATE WORKFORCE LIAISONS