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

CLASSIFICATION

OWS

CORRESPONDENCE SYMBOL

OCTA

ISSUE DATE

February 17, 2000

RESCISSIONS

None

EXPIRATION DATE

Continuing

DIRECTIVE

:

TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 05-99

 

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) 2000; and Wagner Peyser Act Preliminary Planning Estimates for PY 2000

 

  1. Purpose.

    To provide States and outlying areas with WIA title I Adults and Dislocated Workers and Youth Activities allotments for PY 2000; and preliminary planning estimates for PY 2000 public employment service (ES) activities, as required by Section 6(b)(5) of the Wagner-Peyser Act, as amended.

  2. References.

    Wagner-Peyser Act, as amended (29 U.S.C. 49 et sea.); 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 (TELL) No. 11-98; FM 52-99, dated September 9, 1999; and TEGL 3-99, dated January 31, 2000.

  3. Background.

    The Workforce Investment Act, signed into law on August 7, 1998, represents an overhaul of the Nation's employment and training system. This act creates a customer-driven system that will help employers obtain the workers they need and empower job seekers to meet the challenges of the 21St century by obtaining the jobs they need to become productive citizens. WIA funds are provided through grants to the States for employment and training programs. The WIA allotments and the Wagner-Peyser Act preliminary planning estimates are part of the Fiscal Fear 2000 funds appropriated in the Department of Labor Appropriations Act of 2000 (P.L. 106-113). These appropriations include:

    This is the first 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 were published in the Federal Register on February 17, 2000. 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 $250 million for Youth Opportunity Grants. The calculation resulted in $3,127,413, an increase of $1,332,752, or 74 percent, over the total of PY 1999 JTPA Title II-B Summer Youth and JTPA Title II-C Youth Training amounts. The total available for the outlying areas for the Adult Activities program is $2,375,000, a decrease of $156,611 and 6 percent from PY 1999. Outlying areas total funds for Dislocated Worker Activities are $3,972,563, an increase of $983,946, or 32.9 percent, for the areas from PY 1999.

    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. To ensure that all outlying areas, those listed above as well as the Virgin Islands, would not lose funds (excluding competitive grants) from PY 1999 in total for the Youth Activities, Adult Activities, and Dislocated Worker Activities programs combined and to ensure a viable competitive grants program, the Secretary determined that a combined total of one million dollars would be reserved for the required competitive grants for all three programs 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. After subtracting the Youth Activities program competitive funds portion from the one million dollar total for competitive grants, the remainder was split between the Adult Activities and Dislocated Worker programs so t=hat the resulting amounts for each program represented a 12.25 percent share of the each program's total funds for all outlying areas. The Adult Activities program portion of the one million dollar total for competitive grants was calculated to be $290,896, and the Dislocated Worker Activities program amount was calculated to be $486,569. 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 distribution of the remaining noncompetitive funds in each program to all outlying areas, including the Virgin Islands, is riot specified by WIA. The methodology used for each program was similar to that used in JTPA for each program's outlying areas allotments. JTPA methodology generally followed the concepts used for the State formula. Based on this principle, for the Youth Activities and Adult Activities programs, the remaining noncompetitive funds were distributed among the areas by formula based on relative share of number of unemployed, with a 90 percent hold-harmless of the prior year share, a $75,000 minimum (all similar to the JTPA methodology), and the addition of a 130 percent stop- gain of the prior year share (new addition by WIA for the State: formula). The prior year share for Youth Activities was based on the sum of the PY 1999 JTPA II-B Summer Youth and JTPA II-C Youth Training programs for each area. Data used for the relative share calculation in the formula was updated to 1995 data for all outlying areas. This data was 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 was not available from the Bureau, so data from the Guam June 1995 labor force survey was used. For the Republic of the Marshall Islands, where 1995 unemployment data was not available, 19B8 survey data in combination with 1995 population estimates were used as the basis of the formula. 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 same principles and methodology previously used in JTPA for Dislocated Workers outlying area funds, i.e., based on the same pro rata share as the areas received for the PY 2000 WIA Adult Activities program. For amounts determined under this methodology, 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 $1,250,965,000 (including $250 million for Youth Opportunity grants). Attachment I contains a breakdown of the $1,000,965,000 in WIA Youth Activities program allotments by State for PY 2000 and provides a comparison of these allotments to the sum of the CY 1999 JTPA Title Summer Youth and PY 1999 Youth Training 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 $15,014,475, down $825,367, or 5.2 percent, from the PY 1999 JTPA Title II-B Summer Youth 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 2000 is $982,823,112, less than PY 1999 by $507,385, or a decrease of 0.05 percent. Since this amount was below the required $1 billion threshold specified in Section 127(b)(1)(C)(iv)(IV), the WIA funding minimum provision., were not triggered in. Instead, as required by WIA, the minimum allotments were calculated using the JTPA Section 262(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. Also, as required by WIA, a new provision applying a 130 percent stop-gain of the prior year allotment percentage was used. The three formula factors required in WIA are the same as in JTPA and use the following data for the PY 2000 allotments:

        (1)  the number of unemployed for areas of substantial unemployment (ASU's) are averages for the 12-month period, July 1998 through preliminary June 1999;

        (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.

    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, 2000. 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.

      To assist States in meeting the State Plan requirements for Youth Activities, the Department has provided three options for States to obtain early access to Program Year 2000 youth funds. States may elect one of the following three options: Option 1--submit a full WIA title I plan early; Option 2-submit a transition plan fully addressing Youth Activities; or Option 3--submit an abbreviated transition plan for Youth. A detailed description of these options are provided in Field Memorandum 52-99, dated September 9, 1999.

      Under Options 1 and 2, States with approved Youth Plans are eligible to receive the entire allotment on April 1. Further guidance on Options 1 and 2 State plan approval process, including negotiating performance levels, will be provided in the near future. Option 3 allows States that do not have in place all of the WIA system requirements, but are capable of providing comprehensive services under Section 129 of the Act, to access WIA funds effective: April 1, 2000. Under this option, States may submit an abbreviated plan explaining how they will operate Youth Activities; between April 1 and June 30. States choosing Option 3 will. receive 25 percent of their full Youth Activities allotment on April 1, 2000, to allow operation of WIA Youth Activities between April 1 and June 30, 2000.

      The Governor has the discretion to set aside up to 15 percent of the reduced allotment for Statewide Youth Activities. It should be noted that States must submit a full Plan addressing all planning requirements no later than April 1, 2000, to receive the balance of their Youth Activities allotment on July 1, 2000.

    3. Within-State Allocations. Youth Activities funds are to be distributed among local workforce investment areas (subject to reservation of up to 7_5 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. Transition from JTPA to WIA Youth Activities. WIA substantially reforms youth programming and places new emphasis on serving youth within a comprehensive Statewide workforce development system. To assist States and local areas, the Department issued guidance for implementation of comprehensive youth services under WIA. This guidance is designed to inform States and local areas on how to transition their JTPA summer programs to align with WIA requirements. Details are provided in Training and Employment Guidance Letter No. 3-99.

  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, a reduction of $5 million, or 0.5 percent from PY 1999. Attachment II-A shows the PY 2000 Adult Employment and Training Activities allotments and, comparison to PY 1999 JTPA Adult allotments by State.

    2. 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, less than PY 1999 by $4.8 million, or 0.5 percent. Like the Youth Activities program, the WIA minimum provisions were not triggered in for the PY 2000 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, similarly to the Youth Activities program, a new provision applying a 130 percent stop-gain of the prior year allotment percentage was used. The three formula factors use the same data as 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 was used.

    3. NOO's. For PY 2000, Congress appropriated funds for this program in two portions, $238 million available for obligation on July 1, 2000, and $712 million available for obligation on October 1, 2000 (FY 2001). Allotments to States will be prorated based on these amounts and two NOO's will be issued, one for July 1, 2000 under the PY 2000 WIA grant agreement, assuming an approved WIA State plan is in place, and the other for October 1., 2000 (also under the PY 2000 WIA grant agreement) (see Attachment II-B). When State plans are approved at a future date, NOO's will be issued at the time of the grant award.

    4. Within-State Allocations. Adult Activities funds are to be distributed among local workforce investment areas (subject to reservation of up to 1.5 percent for Statewide workforce investment activities) in accordance with the provisions in WIA section 133 and according to the approved State plan.

    5. 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.

    6. 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 $1,589,025,000, an increase of $185.5 million, or 13.2 percent from the PY 1999 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 2000 Dislocated Worker Activities fund allotments by State.

      The amount available for allotment: to the States is eighty percent of the Dislocated Workers appropriation, or $1,271,220,000, a gain of 13.1 percent over PY 1999. Since the Dislocated Worker Activities formula has no floor amount or holdharmless provisions, funding changes for States directly reflect the impact of changes in number of unemployed. The three formula factors required in WIA are the same as in the JTPA Dislocated Workers formula and use the following data for the PY 2000 allotments:

        (1)  the number of unemployed are averages for the 12-month period, October 1998 through September 1999;

        (2)  the number of excess unemployed are averages for the 12-month period, October 1998 through September 1999; and

        (3)  the number of long-term unemployed are averages for calendar year 1998.

    2. NOO's. For PY 2000, Congress appropriated funds for this program in two portions, $529,025,,000 (includes $1.5 million forSpecial Winter Olympics) available for obligation on July 1, 2000, and $1,060,000,000 available for obligation on October 1, 2000 (FY 2001). Allotments to States will be prorated based on these amounts and two NOO's will be issued, one or July 1, 2000 under the PY 2000 WIA grant agreement, assuming an approved WIA state plan is in place, and the other for October 1, 2000 (also under the PY 2000 WIA grant agreement) (see Attachment III-B). When State plans are approved at a future date, NOO's will be issued at the time of the grant award.

    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 theprovisions 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 theGovernor, 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 WIAinterim 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. Employment Service 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 services offices. State funding for the Employment Service remains at the same level as for PY 1999. Attachment IV shows the Wagner-Peyser Act preliminary planning estimates for PY 2000. 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 1999. Final planning estimates will be published in the Federal Register, based on Calendar Year 1999 data, as required by the Wagner-Peyser Act.

    State planning estimates reflect $18,000,000 or 2.363 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 2000.

    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 WagnerPeyser Act. In accordance with this provision, $22,312,050, the 3 percent set-aside funds 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 did not meet 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. Additional Resources. For those States with remaining funds in their one-Stop Career Center implementation grants, those funds may be used for WIA implementation activities including the development of labor market information tools such as America's Job Bank.

  10. Reporting.

    For the WIA programs, States will be required to submit one WIA quarterly report for each of the fund sources received. This report will be divided into six separate subreports 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. Guidance on reporting procedures will be forthcoming.

  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.