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

CLASSIFICATION

Reed Act

CORRESPONDENCE SYMBOL

OWS/OIS/DL

ISSUE DATE

April 22, 2002

RESCISSIONS

None

EXPIRATION DATE

Continuing

ADVISORY

:

TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 18-01

 

TO

:

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

 

FROM

:

EMILY STOVER DeROCCO
Assistant Secretary

 

SUBJECT

:

Reed Act Distribution

  1. Purpose. To advise states of the federal law requirements applicable to the $8 billion Reed Act distribution made on March 13, 2002.

  2. References. Section 209 of the Temporary Extended Unemployment Compensation Act of 2002 (TEUCA), which is Title II of the Job Creation and Worker Assistance Act of 2002, Public Law No. 107-147, signed by the President on March 9, 2002; Title IX of the Social Security Act (SSA); the Federal Unemployment Tax Act (FUTA); and Unemployment Insurance Program Letter (UIPL) 39-97 (62 Fed. Reg. 63960 (December 3, 1997)), UIPL 39-97, Change 1 (January 16, 2002) and UIPL 20-02 (April 4, 2002).

  3. Background. On March 13, 2002, an $8 billion distribution was made to the states' accounts in the Unemployment Trust Fund. The TEUCA labeled this transfer a "Reed Act" distribution although it differs from traditional Reed Act distributions, most notably because it was a set dollar amount, made without regard to the statutory ceilings in the federal accounts. Each state was advised of its share of this distribution in UIPL 20-02.

    Like other Reed Act distributions, federal law governs how states may use this money. This $8 billion Reed Act distribution is available for the payment of unemployment compensation (UC) and the administration of the state's UC law and its public employment service (ES) offices.

    While the use of this $8 billion distribution is limited by many of the same requirements that apply to other Reed Act distributions, there are also differences. Using a question and answer format, Attachment I explains these differences and other amendments to federal law relating to the Reed Act, and answers questions that have arisen since the TEUCA became law. A separate advisory which discusses suggested uses for the $8 billion Reed Act distribution is under development.

  4. Action. State administrators should distribute this advisory to appropriate staff. States must adhere to the requirements of federal law that are contained in this advisory.

  5. Inquiries. Questions should be addressed to your Regional Office.

  6. Attachments. I. REED ACT DISTRIBUTIONS UNDER THE TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION ACT OF 2002 - QUESTIONS AND ANSWERS II. TEXT OF SECTION 209 OF THE TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION ACT OF 2002