U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20210

CLASSIFICATION

UI/ES

CORRESPONDENCE SYMBOL

TEURL/TEESS

ISSUE DATE

January 26, 1996

RESCISSIONS

None

EXPIRATION DATE

January 31, 1997

 

DIRECTIVE

:

GENERAL ADMINISTRATION LETTER NO. 02-96

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

Barbara Ann Farmer
Administrator for Regional Management

 

SUBJECT

:

Funding of State Employment Security Agency Voter Registration Activities by the U.S. Department of Labor.

 

  1. Purpose. To advise State employment security agencies (SESAs) of options regarding the use of unemployment compensation (UC) administrative grants, Reed Act funds, and Wagner-Peyser (W-P) grants to fund voter registration activities in State UC and Employment Service (ES) offices under the National Voter Registration Act (NVRA) of 1993, P.L. 103-31.

  2. References. The National Voter Registration Act of 1993, P.L. 103-31; Sections 302(a), 303(a)(8), 303(a)(9), and 901(c)(1)(A)(i) of the Social Security Act (SSA); the Reed Act (Section 903(c), SSA); the W-P Act, 29 U.S.C. Section 49; and OMB Circular A-87.

  3. Background. The NVRA is designed to increase the number of eligible citizens who register to vote in elections for Federal office by means of expanding the number of forums which provide voter registration services. Section 7 of the NVRA provides for specific voter registration agencies. Under Section 7(a)(2), States must designate as voter registration agencies all offices that provide public assistance (i.e., welfare) and all offices that provide State-funded programs primarily engaged in serving persons with disabilities. Section 7(a)(3) provides for other voter registration agencies, in relevant part, as follows:

    Thus, Section 7(a)(3) of the NVRA permits, but does not mandate, States to designate State UC offices as voter registration agencies. (See paragraphs 4b and 5b of this GAL for discussion of the designation of ES offices as voter registration agencies.) Concerns have been raised by Federal and State officials and public interest organizations about whether Federal funding would be available for voter registration activities in State UC and ES offices. This issuance addresses this question.

  4. Applicable Sections of the Law. 

    1. SSA.  Title III, SSA, governs the use of Federal grant funds for the administration of the unemployment compensation programs by the States.

      Section 302(a), SSA, addresses the uses of UC granted funds as follows:

      The Secretary of Labor shall from time to time certify to the Secretary of the Treasury for payment to each State which has an unemployment compensation law approved by the Secretary of Labor under the Federal Unemployment Tax Act, such amounts as the Secretary of Labor determines to be necessary for the proper and efficient administration of such law during the fiscal year for which such payment is to be made.

      Section 303(a)(8), SSA, requires--the expenditure of all moneys received pursuant to section 302 of this title solely for the purposes and in the amounts found necessary by the Secretary of Labor for the proper and efficient administration of such State law.

      Section 303(a)(9), SSA, requires--. . . the replacement, within a reasonable time, of any moneys received pursuant to section 302 of this title, which, because of any action or contingency, have been lost or have been expended for purposes other than, or in amounts in excess of, those found necessary by the Secretary of Labor for the proper administration of such State law.

      Section 901(c)(1), SSA, authorizes to be made available for expenditure out of the employment security administration account, for each fiscal year--(A) such amounts . . . as the Congress may deem appropriate for the purpose of--(i) assisting the States in the administration of their unemployment compensation laws as provided in title III (including administration pursuant to agreements under any Federal unemployment compensation law). (ii) the establishment and maintenance of systems of public employment offices in accordance with the Act of June 6, 1933, as amended (29 U.S.C., secs. 49-49n) . . . .

    2. Reed Act and W-P Act Funds.  SESAs include both UC and public ES offices. W-P Act grants are distinct from SSA Title III grants.

    While the W-P Act does not have limitations on the expenditure of administrative grant funds as specific as those imposed on UC administrative grants, these grants are subject to the same type of restrictions discussed above in connection with UC grants. First, as with Title III grants, W-P Act funds are subject to the restriction of 31 U.S.C. Section 1301(a) that "appropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law." Thus, W-P Act funds may be used only for the purposes expressly authorized by law. Second, the limitations of OMB Circular A-87, which addresses cost principles for State and local governments, apply to W-P monies as well as Title III grants. In particular, Attachment A, Section C.1.a. of the Circular requires that to be allowable under a grant, a cost must be necessary for the proper and efficient performance and administration of Federal awards.

  5. Interpretation and Discussion. 

    1. SSA.  No chargeable costs against the Title III grant are permitted to fund voter registration activities.

      Although Congress authorized States to designate UC offices as voter registration agencies, this authorization was not accompanied by an amendment to the Title III, SSA, prohibitions against expenditure of grant monies for purposes other than the proper and efficient administration of the State's UC law. Thus, Title III grant monies may not be used to carry out the purposes of the NVRA. However, in the event a State chooses to designate a State UC office as a voter registration agency, the Department has determined that it will not disallow costs or raise conformity or substantial compliance issues under Sections 303(a)(1), 303(a)(8), and 303(a)(9), SSA, unless the designation of such an agency or the performance of such voter registration functions results in any additional charges to UC grant funds or otherwise impedes the operations of that UC office. Therefore, some voter registration activities may be conducted in State UC offices to the extent that the States neither incur additional chargeable costs in the use of existing UC-funded resources nor allow such activities to compromise UC operations. To the extent that additional costs are incurred (even if they appear to be deminimis costs), States must fund such additional costs from non-UC administrative grant sources. Failure to do so could result in disallowed costs and other appropriate remedies.

    2. W-P Act and Reed Act Funds.  States may, under the limitations described below, use Reed Act and Section 7(a) and (b) W-P Act funds to carry out the purposes of the NVRA in SESAs designated as voter registration agencies.

        (1)  W-P Funds.  Currently W-P funds, i.e., ES grants, are used for a wide variety of activities all of which in some way relate to the basic labor exchange functions of an ES agency. The W-P Act authorizes the appropriation of funds "necessary to carry out the purposes of this Act." Since the purposes of the Act are "to promote the establishment and maintenance of a national system of public employment offices . . .", 29 U.S.C. Section 49, (emphasis added), funds under the Act may be used to fund ES office administrative expenses.

        States may, under the NVRA, designate any of a variety of public offices to conduct voter registration activities, including ES offices statewide. The Department has determined that, if an ES office is designated under the NVRA, then voter registration is a legitimate ES administrative expense chargeable to ES grants.

        This position is consistent with Congress' recognition in the NVRA that voter registration is an important Federal priority and that Federal agencies are, therefore, to cooperate with the States as much as possible regarding the designation of voter registration agencies. Further support for this position is found in Section 7(a)(3)(B) of the W-P Act authorizing SESAs to use ES grant monies for "developing linkages between services funded under this Act and related Federal or State legislation." Congress' purpose in enacting the NVRA was to require States to make access to voter registration widely available, thus providing sufficient linkage for this purpose.

        Therefore, if a State elects to use SESAs for voter registration activities, the U.S. Department of Labor permits the use of Section 7(a) and (b) W-P Act funds for voter registration activities. However, SESAs are not required to use ES grants for voter registration activities. If ES grants are used, SESAs shall act prudently in using such resources to ensure the integrity of the States' basic labor exchange function.

        (2)  Reed Act Funds.  Section 903(c)(2), SSA, provides that "a State may, pursuant to a specific appropriation made by the legislative body of the State, use money withdrawn from its account in the payment of expenses incurred by it for the administration of its unemployment compensation law and public employment offices . . . ." Under the SSA, voter registration activities are not necessary for the proper and efficient administration of the State's UC law. Since, however, Reed Act monies may be used to pay expenses of administration of public employment offices, if an activity is fundable under the W-P Act, then it may be paid for from Reed Act monies. Therefore, Reed Act monies may be used to fund voter registration costs under the same circumstances as W-P funds. As discussed above, these activities are fundable under the W-P Act. Since these activities are allowable costs under the W-P Act, if ES offices are designated as voter registration agencies, voter registration activities may be funded with Reed Act monies (if any are available). States are reminded that if Reed Act funds are used for administrative costs such as voter registration activities, the expenditure is not recoverable as is the case when the funds are used to purchase a building and amortized using UC or W-P grant funds.

        (3)  Summary.   In accordance with the Department's interpretation and consistent with W-P requirements, SESAs may use ES grants or Reed Act funds for voter registration activities in the following situations, but are not limited to these situations: (1) where voter registration forms and collection points are provided at an ES office, (2) where voter registration tables are set up in the lobby areas of the ES offices, or (3) where ES staff are available to assist voter registration activities. Further, if UC staff in an UC office co-located with an ES office, were to assist voter registration activities which created chargeable costs, such costs may be chargeable to the ES grant or the Reed Act appropriation. In no circumstances may additional costs be charged to the UC grant. However, the Department of Labor will not disallow costs or raise substantial compliance issues unless the designation of UC offices or the performance of voter registration activities results in additional charges to UC grant funds or otherwise impedes the operation of such offices.

  6. Action Required. SESAs in States where the public employment service offices and UC offices have been designated as voter registration agencies are requested to review existing and proposed procedures to ensure that any expenditure of funds for such activities are consistent with the guidance provided in this issuance.

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