DIRECTIVE	:	UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 07-90
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	DONALD J. KULICK Administrator for Regional Management
SUBJECT	:	Model Agreement and Memorandum of Understanding (MOU) to Implement the Requirements of Section 303(h)(1) of the Social Security Act (SSA) for Operation of the Federal Parent Locator Service (FPLS) Locator System

1. Purpose. To clarify the requirements of the MOU between the Secretaries of Labor and Health and Human Services, developed pursuant to Section 453(e)(3), SSA, for an agreement to participate in the FPLS Locator System.

2. References. Section 124 of P.L. 100-485, the Family Support Act of 1988.; Sections 303(h) and 453(e)(3), SSA; UIPL No. 11-89, dated January 5, 1989; UIPL No. 19-89, dated February 24, 1989.

3. Background. State Employment Security Agencies (SESAs) have been involved for some time in child support enforcement efforts by providing wage and unemployment compensation claims information on individuals with outstanding child support obligations on an intrastate basis to State and local IV-D agencies and through child support intercept in accordance with Section 303(e), SSA. The FPLS Locator System will facilitate carrying out a similar service to the same State and local IV-D agencies in locating individuals for child support enforcement purposes on an interstate basis.

   SESAs were advised in UIPLs 11-89 and 19-89 that Section 124(b) of P.L. 100-485, amended Section 303, SSA, by adding a new subsection (h)(1) which requires SESAs to provide prompt access to wage and unemployment compensation claims information (including any information that might be useful in locating an absent parent or such parent's employer) to the Secretary of Health and Human Services for purposes of child support enforcement under Section 453, SSA. Section 303(h)(1), SSA, further allows that such information will be provided as may be agreed upon by the Secretaries of Labor and Health and Human Services.

   The FPLS, located in the office of Child Support Enforcement (OCSE), carries out the Secretary of Health and Human Services' responsibilities under Section 453, SSA.

   UIPL 19-89 transmitted to all SESAs the MOU between the Secretaries of Labor and Health and Human Services. In establishing the framework and requirements under which SESAs will implement Section 303th)(1), SSA, the MOU requires that the OCSE enter into an agreement with a SESA to act as its agent in establishing an arrangement with a contractor to provide support services to the FPLS Locator System, and, requires individual agreements between each SESA and the OCSE to set forth the specific terms of participating in the FPLS Locator System.

4. FPLS Locator System. The Florida SESA has signed an agreement with OCSE to act as its agent in securing the services of Martin Marietta Data Systems (MMDS) to perform the data receipt, sorting, and distribution support for the FPLS Locator System. The FPLS quarterly crossmatch will parallel the procedures and format that are currently used for the Interstate Crossmatch/Claimant Locator, except that the FPL8 process will be accomplished through the use of tapes (in the same manner as the IB crossmatch was conducted prior to INTERNET).

   Based on a predetermined quarterly schedule, the FPLS will forward tapes containing the records to be matched to MMDS for distribution to the SESAs. The SESAs are required to match the records against wage and benefit files and provide all "Hits" to the MMDS according to the response schedule. When there are no "Hits", the SESA is required to return the tape to MMDS clearly labeled that there are no "Hits."

   In establishing the FPLS Locator as a separate system patterned after the IB locator, it satisfies the concerns of the ICESA Interstate Benefit Committee that the voluntary nature of the SESAs' quarterly Interstate Crossmatch/Claimant Locator be maintained; the SESAs' desire to use an existing data format; and, FPLS' interest in having available to it the "national broadcast" capability of the Interstate Crossmatch/Claimant Locator System.

5. Model SESA-OCSE Agreement. The OCSE consulted with the Department of Labor (DUET), Employment and Training Administration (ETA), in preparing the model State agreement that it has provided to the SESAs. The model agreement addresses all the provisions required under the MOU as well as provides the opportunity for SESAs to include terms covering quarterly volumes to be matched, costs of the State to carry out crossmatch, and any special language to meet State law requirements regarding confidentiality of the data. .

   SESAs are reminded that Section 303(h)(1), SSA, does not limit the frequency of the Department of Health and Human Services' (DHHS) access to wage and claims information. However, ETA and the OCSE agreed to quantify the number of request records from FPLS for each State as "up to 50,000" records per quarter and allow for each SESA individually to agree to match a higher number of records per quarter depending on its capability.

   Several States have requested the inclusion of a "hold harmless" or "indemnification clause" as a provision of the agreement, or, alternatively, a verification requirement. However, neither indemnification nor verification is required by the MOU or the statute, which makes requiring either in this agreement legally questionable.

   As a General rule, a Federal agency may not agree to an indemnification clause, except as narrowly construed by the Comptroller General in applicable opinions.

   Some provisions that require the release of wage and unemployment compensation claims information include verification as a requirement. For instance, Section 1137(c)(1), SSA, requires independent verification for purposes of Section 303(f). This requirement is absent in Section 303(h). However, OCSE has agreed to chance the language of Item J of the model agreement by striking the last sentence and substituting in its place the following language:

   "The OCSE agrees to request that each State and local child support enforcement agency take no official action on the basis of the data received from the SESA without independently verifying the accuracy of the information received."

   SESAs are again reminded that: (a) Section 124(c)(1) of the Family Support Act, requires that SESAs provide OCSE with access to wage and unemployment claims information under the requirements of Section 303(h)(1), SSA, effective the first quarter of CY 1990. Therefore, participation in the FPLS Locator System, including execution of a State agreement as required by the MOU, is mandatory; and, (b) Section 303(h)(2),.SSA, makes substantial compliance with "a" above a condition for receiving administrative grants.

6. Action Required. SESAs are requested to take the following actions, as appropriate: (a) SESAs that have been contacted, either in person or in writing by OCSE, are requested to immediately review the model State agreement, make the necessary additions and discuss with OCSE with a view towards early agreement; (b) SESAs that have not been contacted by OCSE are requested to immediately advise the ETA Regional office; and, (c) SESAs with agreements should forward a copy of such agreements to the ETA Regional Office by December 15, 1989.

7. Inquiries. If you need any assistance, please contact your Regional Office.