DIRECTIVE	:	UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 39-97
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	GRACE A. KILBANE Director Unemployment Insurance Service
SUBJECT	:	The Reed Act Provisions of Title IX of the Social Security Act

1. Purpose. To transmit updated instructions and requirements related to the use of "Reed Act" funds as transferred to State accounts in the Unemployment Trust Fund (UTF).

2. References. Sections 303(a)(2), 303(a)(4), 303(a)(5), 303(a)(8), 901(c), 903, 904 and 1201 of the Social Security Act (SSA); the Balanced Budget Act of 1997 (BBA), P.L. 105-33; Sections 3304(a)(3), 3304(a)(4) and 3306(f) of the Federal Unemployment Tax Act (FUTA); 29 CFR Part 97; OMB Circular No. A-87; Part IV, Sections 3000-3040 of the Employment Security Manual (ES Manual); UIPL Nos. 5-90, 11-90 and 12-91; GAL Nos. 4-83, 5-94 and 2-96; and Section III, Chapter 2 of ET Handbook No. 401.

3. Background. The Unemployment Insurance Service (UIS) is issuing "basic" program letters for certain program areas to provide comprehensive instructions to States in a single document. This program letter provides guidance to States in accounting for their use of Reed Act funds in accordance with standards established by the Secretary of Labor. This directive is a consolidation of instructions from the ES Manual and previous UI program and administration letters related to Reed Act funds and now supersedes the ES Manual sections referenced above. These instructions may later be included as a part of a Handbook issuance.

4. Action Required. SESA administrators are requested to provide these instructions to the appropriate staff.

5. Inquiries. Inquiries should be directed to your Regional Office.

6. Rescission. Part IV, Sections 3000-3040 of the Employment Security Manual.

7. Attachments. 

   I.  The Reed Act Provisions of Title IX of the Social Security Act;

   II.  Draft Language for State Laws.