DIRECTIVE	:	UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 11-99
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	GRACE A. KILBANE Director Unemployment Insurance Service
SUBJECT	:	Permanent Authorization of the Self-Employment Assistance Program

1. Purpose. To advise the States of the permanent authorization of the Self-Employment Assistance (SEA) program.

2. References. The Noncitizen Benefit Clarification and Other Technical Amendments Act of 1998, P.L. 105-306; the North American Free Trade Agreement (NAFTA) Implementation Act , P.L. No. 103-182 (26 U.S.C. 3306 note); Section 3306(t) of the Federal Unemployment Tax Act; and Unemployment Insurance Program Letters (UIPLs) Nos. 11-98 and 14-94.

3. Background. UIPL No. 14-94 issued February 16, 1994, advised the States of provisions in the NAFTA Implementation Act authorizing the SEA program. The intent behind these provisions was to provide States with the authority to establish and operate self-employment programs that would benefit dislocated workers who might need additional tools, besides the basic income maintenance provided by the unemployment insurance system, in order to reenter the work force.

   The NAFTA Implementation Act became effective on December 8, 1993, and the SEA provisions contained in the NAFTA Implementation Act were scheduled to expire on December 8, 1998. Among other things, UIPL No. 14-94 required the States to submit to the Department of Labor (Department) a plan for approval prior to implementing a SEA program. The reason for this approval process was to assure an orderly start-up of a State's SEA program.

   UIPL No. 11-98, issued January 27, 1998, reminded the States that the SEA program was being terminated on December 8, 1998.

4. SEA Program. Section 3 of the Noncitizen Benefit Clarification and Other Technical Amendments Act of 1998 enacted on October 28, 1998, amends the NAFTA Implementation Act to repeal the SEA termination date, thereby making permanent the authorization of the SEA program. Since the SEA program will not be terminated, UIPL No. 11-98 is now obsolete and is hereby rescinded.

   In addition, the Department will no longer require States to submit a plan for approval prior to implementing a SEA program as outlined in UIPL No. 14-94. However, all other provisions of UIPL 14-94 remain in effect. The Department believes that, after five years of State operation of SEA programs, States can learn from each other how best to implement successful SEA programs. For those States currently operating a SEA program, the required methods for reporting to the Department remain unchanged. In addition, States must continue to submit, in a timely manner, proposed SEA legislation for review by the appropriate Regional Office.

5. Action. States with current SEA laws will need to review their laws and regulations to determine if any legislative action is necessary to extend their programs. States without SEA programs should consider whether they want to implement such a program. In determining whether to proceed with legislation, States can review Self-Employment as a Reemployment Option: Demonstration Results and National Legislation (Unemployment Insurance Occasional Paper 94-3).

   State Administrators should provide information regarding this amendment to appropriate staff.

6. Inquiries. Please direct inquiries to the appropriate Regional Office.