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

CLASSIFICATION

WIA/ES/Reempl. Srvcs.

CORRESPONDENCE SYMBOL

OWS

ISSUE DATE

March 6, 2001

RESCISSIONS

None

EXPIRATION DATE

Continuing

DIRECTIVE

:

TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 12-00

 

TO

:

ALL STATE WORKFORCE LIAISONS
ALL STATE EMPLOYMENT SECURITY AGENCIES
ALL STATE WORKER ADJUSTMENT LIAISONS
ALL ONE-STOP CAREER CENTER SYSTEM LEADS

 

FROM

:

LENITA JACOBS-SIMMONS
Deputy Assistant Secretary

 

SUBJECT

:

Workforce Investment Act (WIA) Allotments for Program Year (PY) 2001; Wagner-Peyser Act Preliminary Planning Estimates for PY 2001; and Reemployment Services Allotments for PY 2001

 

  1. Purpose. To provide States and outlying areas with WIA title I Adults and Dislocated Workers and Youth Activities allotments for PY 2001; preliminary planning estimates for PY 2001 public employment service (ES) activities, as required by Section 6(b)(5) of the Wagner-Peyser Act, as amended; and Reemployment Services allotments for PY 2001.

  2. References. Wagner-Peyser Act, as amended (29 U.S.C. 49 et seq.); Workforce Investment Act of 1998 (WIA), 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; FM 52-99, dated September 9, 1999; and TEGL 3-99, dated January 31, 2000.

  3. Background. The WIA allotments, the Wagner-Peyser Act preliminary planning estimates, and the Reemployment Services allotments are part of the Fiscal Year 2001 funds appropriated in the Consolidated Appropriations Act, 2001, Public Law 106-554. These appropriations include:

    Youth Activities:  $1,377,965,000 - an increase of $127 million, or 10.2 percent over PY 2000, composed of: (1) Formula funds - $1,102,965,000; and (2) Youth Opportunity Grants - $275,000,000;

    Adult Activities:  $950,000,000 - the same level as PY 2000;

    Dislocated Workers Activities:  $1,590,040,000 - an increase of $1,015,000, or .06 percent from the PY 2000 level;

    Wagner-Peyser Act (preliminary planning estimates):  $761,735,000 - the same as the PY 2000 level; and

    Reemployment Services:  $35,000,000 (first year of appropriation).

    This is the second year in which allotments are made to States and outlying areas under WIA. The allotments for States are based on formulas defined in the Act. The allotments for outlying areas are based on a discretionary formula as authorized under WIA title I. These allotments and preliminary planning estimates will be published in the Federal Register on March 7, 2001. Comments are being invited from the public on the formula used to distribute outlying areas funds only.

  4. Outlying Areas Funds for Youth Activities, Adult Activities, and Dislocated Worker Activities.

    1. Total funds for outlying areas.  The total funds available for the outlying areas for each program were reserved at the maximum 0.25 percent of the full amount appropriated for each program, in accordance with WIA provisions. For Youth Activities, this calculation was done on the total appropriation including $275 million for Youth Opportunity Grants. The calculation resulted in $3,444,913, an increase of $317,500, or 10.2 percent, over the PY 2000 level. The total available for the outlying areas for the Adult Activities program is $2,375,000, the same level as PY 2000. Outlying areas' total funds for Dislocated Worker Activities are $3,975,100, an increase of $2,537 for the areas from PY 2000.

    2. Competitive Grants.  From the total funds for outlying areas for each program, WIA requires that competitive grants be awarded to Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and the Freely Associated States (Republic of the Marshall Islands, Federated States of Micronesia, and Republic of Palau). WIA further provides that the amount for such grants is not to exceed the amount reserved for the Freely Associated States for the respective program for PY 1997: Youth Activities, $222,535 (sum of JTPA Title II-B Summer Youth and JTPA Title II-C Youth Training); Adult Activities, $940,601; and Dislocated Worker Activities, $1,089,993. The Secretary determined that a combined total of $1,000,000 would again be reserved for the required competitive grants for all three programs for PY 2001, the same level as reserved for PY 2000. For the Youth Activities program, the amount of competitive grants was set at $222,535, the maximum allowed by WIA which is the amount of JTPA PY 1997 total Youth allotments for the Freely Associated States, the same level as PY 2000. After subtracting the Youth Activities program competitive funds portion from the $1,000,000 total for competitive grants, the remainder was split between the Adult Activities and Dislocated Worker programs so that the resulting amounts for each program represented a 12.2 percent share of the each program's total funds for all outlying areas. The Adult Activities program portion of the $1,000,000 total for competitive grants was calculated to be $290,780, and the Dislocated Worker Activities program amount was calculated to be $486,685. These competitive grants amounts are less than the maximum allowed by WIA (PY 1997 allotments for the Freely Associated States) for either the Adult Activities or Dislocated Worker Activities program.

    3. Non-competitive (Formula) Grants.  After determining the amount of funds for competitive grants to be reserved for each program, the method for distribution of the remaining non-competitive funds in each program to all outlying areas, including the Virgin Islands, is not specified by WIA. For the Youth Activities and Adult Activities programs, the remaining non-competitive funds were distributed among the areas by the same formula as used for these programs for PY 2000, i.e., based on relative share of number of unemployed, with a 90 percent hold-harmless of the prior year share, a $75,000 minimum, and a 130 percent stop-gain of the prior year share. Data used for the relative share calculation in the formula were the same as used for PY 2000 for all outlying areas. These data were obtained from the Bureau of the Census for American Samoa, Commonwealth of the Northern Mariana Islands, Federated States of Micronesia, Republic of Palau, and the U. S. Virgin Islands, based on mid-decade surveys for those areas conducted with the assistance of the Bureau. For Guam, data from a similar survey were not available from the Bureau, so data from the Guam June 1995 labor force survey were used. For the Republic of the Marshall Islands, where 1995 unemployment data were not available, 1988 survey data in combination with 1995 population estimates were used as the basis of the formula. Updated 2000 special Census data are expected to be available for next year's allotment calculations. The remaining non-competitive Dislocated Worker Activities funds for grants to all outlying areas, including the Virgin Islands, were distributed among the areas also by the methodology previously used, i.e., based on the same pro rata share as the areas received for the PY 2001 WIA Adult Activities program. For amounts determined for outlying areas, see Attachment I for Youth Activities, Attachment II-A for Adult Activities, and Attachment III-A for Dislocated Workers Activities.

  5. State Youth Activities funds: Title I--Chapter 4--Youth Activities.

    1. State and Native Americans Allotments.  PY 2000 Youth Activities funds appropriated under WIA total $1,377,965,000 (including $275 million for Youth Opportunity grants). Attachment I contains a breakdown of the $1,102,965,000 in WIA Youth Activities program allotments by State for PY 2001 and provides a comparison of these allotments to PY 2000 Youth Activities allotments for all States, outlying areas, Puerto Rico and the District of Columbia.

      The total amount available for Native Americans is 1.5 percent of the total amount for Youth Activities excluding Youth Opportunity Grants, in accordance with WIA Section 127. This total is $16,544,475, up $1,530,000, or 10.19 percent, from the PY 2000 Youth Activities level for Native Americans.

      After determining the amount for the outlying areas (discussed in item 4 above) and Native Americans, the amount available for allotments to the States for PY 2001 is $1,082,975,612, more than PY 2000 by $100,152,500, or an increase of 10.19 percent. This total amount was above the required $1 billion threshold specified in Section 127(b)(1)(C)(iv)(IV); therefore, for the first time, the WIA additional minimum provisions were triggered:  (1)  minimum 1998 dollar (not percentage) (JTPA II-B and II-C combined) allotment, and (2)  2-tier small State minimum allotment (.3 percent of first $1 billion and .4 percent of amount over $1 billion), rather than .25 percent. These provisions were in addition to the traditional provision of a 90 percent hold-harmless from the prior year allotment percentage. 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 2001 allotments:

        (1)  the number of unemployed for areas of substantial unemployment (ASU's) are averages for the 12-month period, July 1999 through preliminary June 2000;

        (2)  the number of excess unemployed individuals or the ASU excess (depending on which is higher) are averages 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) are from the 1990 Census. (2000 Census data are not expected to be available for use until PY 2003 allotment calculations.)

    2. Notices of Obligation (NOO's) and State Plans.  WIA section 189(g)(1)(B) allows the Secretary to make the Youth Activities funds available for obligation on April 1, 2001. This early obligation of youth funds enables States to begin planning and facilitate start-up operations for their summer employment opportunities component of Youth Activities under WIA.

    3. 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.

    4. Transfers of Funds.  There is no authority for local workforce investment areas to transfer funds to or from the Youth Activities program.

    5. 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. The first reallotment of funds among States under WIA will occur during PY 2001 based on obligations made during PY 2000 (20 CFR 667.150 of the WIA interim final regulations). There will be no recapture/reallotment of WIA funds in PY 2000.

    6. WIA Youth Activities.  WIA substantially reformed youth programming and placed new emphasis on serving youth in a comprehensive State-wide workforce development system. Youth Councils, established by local Workforce Investment Boards, provide policy guidance, oversight and coordination of youth services within local areas. Many States and local workforce investment areas are still continuing to move towards development of comprehensive youth programs that are aligned with WIA requirements.

      States should encourage Local Workforce Investment Areas to continue efforts to establish a coordinated youth service delivery system infused with the principles of youth development, which successfully links available community resources and ensures comprehensive quality services to eligible youth. In addition, States should ensure that the guidance to local areas regarding Youth Councils include the message that their planning process for youth program services should begin well in advance of the availability of funds. This is particularly important for programs serving in-school youth which include a summer employment opportunities component. Program activities should begin as soon after the end of the school year as is feasible. States are reminded that local area procurement systems must meet the requirements of Section 123 of the Act as explained in TEGL No. 9-00, dated January 23, 2001, on competitive selection procedures.

      Note: ETA distributed a technical assistance resource entitled "The WIA Youth Program RFP Guide" on January 3, 2001 to assist Local Boards and Youth Councils in developing RFPs. This guide provides information on how to develop an effective RFP for youth services.

      States are urged to encourage Local Boards to consider leveraging both financial and programmatic resources. At the State and local levels early efforts should be lent to identify all available resources. Careful consideration should also be given to meeting the needs of out-of-school youth (OSY)in designing the summer employment opportunities component. Summer employment opportunities can be an important strategy in helping local areas achieve the requirement that a minimum of 30 percent of the youth funds shall be used to provide services to OSY. States should also encourage local areas, with the guidance of Youth Councils, to begin the planning process for youth program services well in advance of the availability of funds.

      Other areas that States should emphasize when providing guidance to locals include: refining follow-up services for youth; placing emphasis on performance accountability, including establishing participant goals in the Individual Service Strategy; developing systems to measure performance outcomes on the seven core performance measures for younger and older youth; and developing strong Youth Councils to serve as youth advocates. Further guidance on implementing youth activities, including the summer employment opportunities component, will be provided in the near future.

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

    1. State Allotments.  The total Adult Employment and Training Activities appropriation is $950,000,000, the same level as PY 2000. Attachment II-A shows the PY 2001 Adult Employment and Training Activities allotments and comparison to PY 2000 allotments by State.

      After determining the amount for the outlying areas (discussed in item 4 above), the amount available for allotments to the States is $947,625,000, the same as PY 2000. Unlike the Youth Activities program, the WIA minimum provisions were not triggered for the PY 2001 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 not expected to be available for use until PY 2003 allotment calculations.)

    2. NOO's.  For PY 2001, Congress appropriated funds for this program in two portions, $238 million available for obligation on July 1, 2001, and $712 million available for obligation on October 1, 2001 (FY 2002). Allotments to States will be prorated based on these amounts and two NOO's will be issued, one for July 1, 2001, under the PY 2001 WIA grant agreement, and the other for October 1, 2001, (also under the PY 2001 WIA grant agreement) (see Attachment II-B).

    3. Within-State Allocations.  Adult 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 in WIA section 133 and according to the approved State plan.

    4. 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.

    5. 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. The first reallotment of funds among States under WIA will occur during PY 2001 based on obligations made during PY 2000 (20 CFR 667.150 of the WIA interim final regulations). There will be no recapture/reallotment of WIA funds in PY 2000.

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

    1. State Allotments.  The total Dislocated Worker appropriation is $1,590,040,000, an increase of $1,015,000, or .06 percent, from the PY 2000 level. The total appropriation includes 80 percent allotted by formula to the States, while 20 percent is retained for National Emergency Grants, technical assistance and training, demonstration projects, and for the outlying areas Dislocated Worker allotments (outlying areas are discussed in item 4 above). Attachment III-A shows the PY 2001 Dislocated Worker Activities fund allotments by State.

      The amount available for allotment to the States is eighty percent of the Dislocated Workers appropriation, or $1,272,032,000, a gain of .06 percent over PY 2000. Since the Dislocated Worker Activities formula has no floor amount or hold-harmless provisions, funding changes for States directly reflect the impact of changes in number of unemployed. The three formula factors required in WIA use the following data for the PY 2001 allotments:

        (1)  the number of unemployed are averages for the 12-month period, October 1999 through September 2000;

        (2)  the number of excess unemployed are averages for the 12-month period, October 1999 through September 2000; and

        (3)  the number of long-term unemployed are averages for calendar year 1999.

    2. NOO's.  For PY 2001, Congress appropriated funds for this program in two portions, $530,040,000 available for obligation on July 1, 2001, and $1,060,000,000 available for obligation on October 1, 2001 (FY 2002). Allotments to States will be prorated based on these amounts and two NOO's will be issued, one for July 1, 2001, under the PY 2001 WIA grant agreement, and the other for October 1, 2001, (also under the PY 2001 WIA grant agreement) (see Attachment III-B).

    3. Within-State Allocations.  Dislocated Worker Activities funds 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.

    4. 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 Dislocated Workers Activities funds to Adult Activities, and up to 20 percent of Adult Activities funds to Dislocated Workers Activities.

    5. 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. The first reallotment of funds among States under WIA will occur during PY 2001 based on obligations made during PY 2000 (section 667.150 of the WIA interim final regulations). There will be no recapture/reallotment of WIA funds in PY 2000.

  8. Wagner-Peyser Act funds.

    Preliminary Planning Estimates.  The public employment service program involves a Federal-State partnership between the U.S. Department of Labor and the State Employment Security Agencies. Under the Wagner-Peyser Act, funds are allotted to each State to administer a labor exchange program responding to the needs of the State's employers and workers through a system of local employment service offices that are part of the One-Stop service delivery system established by the State. Total funding for Wagner-Peyser remained the same as PY 2000, but due to reduced reserves for postage, available funds for the States and outlying areas increased by $2 million. Attachment IV shows the Wagner-Peyser Act preliminary planning estimates for PY 2001. These preliminary planning estimates 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 monthly averages for each State's share of the civilian labor force (CLF) and unemployment for the 12 months ending September 2000. Final planning estimates will be published in the Federal Register, based on calendar year 2000 data, as required by the Wagner-Peyser Act.

    State planning estimates reflect $16,000,000, or 2.1 percent of the total amount appropriated, which is being withheld from distribution to States to finance postage costs associated with the conduct of Wagner-Peyser Act labor exchange services for PY 2001.

    The Secretary of Labor is required to set aside up to three percent of the total available funds to assure that each State will have sufficient resources to maintain statewide employment service (ES) activities, as required under Section 6(b)(4) of the Wagner-Peyser Act. In accordance with this provision, the 3 percent set-aside funds, $22,372,050, are included in the total planning estimate. The set-aside funds are distributed in two steps to States which have lost in relative share of resources from the previous year. In Step 1, States which have a CLF below one million and are also below the median CLF density are maintained at 100 percent of their relative share of prior year resources. All remaining set-aside funds are distributed on a pro-rata basis in Step 2 to all other States losing in relative share from the prior year but not meeting the size and density criteria for Step 1.

    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.

  9. Reemployment Services. The purpose of these funds is to ensure that all Unemployment Insurance (UI) claimants receive the necessary services to become re-employed. The allocation figures for the distribution of the $35.0 million in Reemployment Services funds for each State for PY 2001 are listed in Attachment V. One percent ($350,000) of the total will be used to evaluate reemployment services provided through these funds. The remaining funds were allocated using the following method: each State received $215,000; the remaining funds were distributed using each State's share of first payments for FY 2000 to UI claimants. 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 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.

  11. General Guidance. The Department of Labor recognizes the need for additional information relating to reallotments, transfer of funds, accountability measures and reporting procedures. Separate guidance will be provided in the near future.

  12. Inquiries. Questions regarding these allotments, preliminary planning estimates and planning requirements may be directed to the appropriate Regional Office. Information may also be found at the website - http://usworkforce.org.

  13. Attachments.

    I.  Youth Activities Allotments, PY 2001 vs PY 2000

    II-A.  Adult Employment and Training Activities Allotments, PY 2001 vs PY 2000

    II-B.  Adult Employment and Training Activities Allotments, July 1 and October 1 Funding

    III-A.  Dislocated Worker Employment and Training Activities Allotments, PY 2001 vs PY 2000

    III-B.  Dislocated Worker Employment and Training Activities Allotments, July 1 and October 1 Funding

    IV.  Wagner-Peyser Act PY 2001 Preliminary Planning Estimates vs PY 2000 Final Allotments

    V.  Reemployment Services PY 2001 Allotments