-

 



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

CLASSIFICATION

UI

CORRESPONDENCE SYMBOL

TEURL

ISSUE DATE

November 13, 1989

RESCISSIONS

 

EXPIRATION DATE

November 30, 1990

DIRECTIVE

:

UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 04-90

 

TO

:

ALL STATE EMPLOYMENT SECURITY AGENCIES

 

FROM

:

DONALD J. KULICK
Administrator
for Regional Management

 

SUBJECT

:

Applicability of P.L. 100-503, The Computer Matching and Privacy Protection Act of 1988, to State Unemployment Insurance Service Operations

  1. Purpose. To advise State agencies of the applicability of provisions of The Computer Matching and Privacy Protection Act of 1988, P.L. 100-503, to State agency operations, and to provide State agencies with the office of Management and Budget's guidance interpreting the provisions of the Act.

  2. Reference. Public Law 100-503, The Computer Matching and Privacy Protection Act of 1988; 54 FR 25818 - 25829, Final Guidance Interpreting the Provisions of Public Law 100-503, the Computer Matching and Privacy Protection Act of 1988.

  3. Background Discussion. The purpose of the Computer Matching and Privacy Protection Act of 1988 (CMPPA), which amends the provisions of the Privacy Act of 1974 found at 5 U.S.C. 552a, is to improve the oversight and procedures governing the disclosures of personal information in "computer matching programs" and to protect the privacy of individuals whose Federal records are used in such matching programs.

    These amendments apply to any "computer matching program" using any Federal "record which is contained in a system of records."

    "Matching program" is defined as:

    any computerized comparison of --

      (i) two or more automated systems of records or a system of records with non-Federal records for the purpose of --

        (I) establishing or verifying the eligibility of, or continuing compliance with statutory and regulatory requirements by, applicants for, recipients or beneficiaries of, participants in, or providers of services with respect to, cash or in-kind assistance or payments under Federal benefit programs, or

        (II) recouping payments or delinquent debts under such Federal benefit programs, or

      (ii) two or more automated Federal personnel or payroll systems of records or a system of Federal personnel or payroll records with non-Federal records."

    Federal "record" is defined as:

      any item, collection, or grouping of information about an individual that is maintained by a Federal agency ... and that contains his name, or the identifying number, symbol, or other identifying particular assigned to the individual ...."

    "System of records" is defined as:

      A group of any records under the control of any [Federal] agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual."

    The CMPPA provides that such computer matching programs may be conducted only pursuant to written matching agreements entered into by the Federal agency providing records contained in a system of records and the Federal or non-federal agency receiving records contained in a system of records for use in the matching program.  Among the statutory requirements that must be met by the matching agreements is specification of the purpose and legal authority for the matching program, a description of the nature of the match and the expected results, a description of the procedures for notifying individuals affected and for verification of information, and a description of procedures for the protection of the records.

    The Office of Management and Budget (OMB) published, at 54 FR 25818, final guidance for the use of agencies in implementing the amendments made to 5 U.S.C. 552a.  OMB indicated that these guidelines augmented and should be used with the "Office of Management and Budget (OMB) Guidelines on the Administration of the Privacy Act of 1974", issued on July 1, 1975, and supplemented on November 21, 1975, and Appendix 1 to OMB Circular No. A-130, published on December 24, 1985 (50 FR 52738).

  4. Interpretation. Questions have arisen concerning the applicability of the amendments made by the CMPPA to the Federal-State unemployment compensation (UC) program and to the related Federal programs (UCFE, UCX, TAA, DUA, REPP, and AEPP). It has been determined that the CMPPA amendments to 5 U.S.C. 552a are inapplicable to State UC programs (including the EB program), to data exchanged by the States under the U.I. Interstate Crossmatch and Claimant Locator System, and to the Federal UC programs.  Wage and claim information about individuals claiming benefits under the UC and related Federal programs is maintained by the States, not by DOL. Such documents do not, therefore, constitute a Federal "system of records", and are not subject to the CMPPA amendments.

    The only exception to this determination is where there is a use of a Federal "record which is contained in a system of records" for purposes of a "matching program", as defined above.  This would occur, and the computer matching restrictions would thus be applicable, where a State makes a "computerized comparison" with any Federal "system of records" for the purpose of assuring proper payments or recouping payments under a Federal UC program. The computer matching restrictions would also be applicable where a State makes a "computerized comparison" of a system of Federal personnel or payroll records with non-Federal records, regardless of the purpose. Therefore, whether such a computerized comparison of Federal personnel or payroll records is performed for the purpose of assuring proper payments under a Federal UC program, a State program, or any reason whatsoever, the computer matching restrictions of amended 5 U.S.C. 552a are applicable.

    In passing, we note that Federal agencies furnish wage and separation information on UCFE and UCX claimants to State agencies as a permissible disclosure of a record for "routine use" under 5 U.S.C. 552a(b)(3).  This information may be used by the State agency only for the purpose for which it was disclosed -- the adjudication of a claimant's UCFE or UCX claim.  This use of these "records" is not subject to the CMPPA amendments because it is not a "computerized comparison" and therefore is not a "matching program" under 5 U.S.C. 552a(a)(8).

  5. Action Required. State Administrators are requested to provide this information to appropriate staff.

  6. Inquiries. Questions should be addressed to the appropriate Regional Office.

  7. Attachments. 

    - Public Law 100-503, the Computer Matching and Privacy Protection Act of 1988

    - 54 Federal Register 25818 - 25829, Privacy Protection Act of 1974, Final Guidance Interpreting the Provisions of Public Law 100-503, the Computer Matching and Privacy Protection Act of 1988.

 


PUBLIC LAW 100-503-OCT. 18, 1988

102 STAT. 2507
Public Law 100-503
100th Congress
An Act

To amend title 5 of the United States Code, to ensure privacy, integrity, and verification of data disclosed
for computer matching, to establish Data IntegrityBoards within Federal agencies, and for other purposes.
Oct. 18. 1988
[S. 496]
Computer Matching
and Privacy Protection
Act of 1988.
5 USC 552a note.

Be it enacted by the Senate and House of Representatives of the United States of America in
Congress assembled,



SECTION 1. SHORT TITLE.

This Act may be cited as the "Computer Matching and Privacy  Protection Act of 1988".

SEC. 2. MATCHING AGREEMENTS.

Section 552a of title 5, United States Code, is amended--

    (1) by redesignating subsections (o), (p), and (q) as subsections (r), (s), and (t), respectively, and

    (2) by inserting after subsection (n) the following new subsections:

"(o) MATCHING AGREEMENTS. -(1) No record which is contained in a system of records may be disclosed to a recipient
agency or non-Federal agency for use in a computer matching program except pursuant to a written agreement
between the source agency and the recipient agency or non-Federal agency specifying-

    "(A) the purpose and legal authority for conducting the program;

    "(B) the justification for the program and the anticipated results, including a specific estimate of any savings;

    "(C) a description of the records that will be matched, including each data element that will be, used, the approximate
number of records that will be matched, and the projected starting and completion dates of the matching program;

    "(D) procedures for providing individualized notice at the time of application, and notice periodically thereafter as
directed by the Data Integrity Board of such agency (subject to guidance provided by the Director of the Office of
Management and  Budget pursuant to subsection (v)), to-

                "(i) applicants for and recipients of financial assistance or payments under Federal benefit programs, and

                "(ii) applicants for and holders of positions as Federal personnel, that any information provided by such applicants,
        recipients, holders, and individuals may be subject to verification through matching programs;

     "(E) procedures for verifying information produced in such matching program as required by subsection (p);

     "(F) procedures for the retention and timely destruction of identifiable records created by a recipient agency or non-
Federal agency in such matching program; .

     "(G) procedures for ensuring the administrative, technical, and physical security of the records matched and the
results of such programs;

     "(H) prohibitions on duplication and redisclosure of records provided by the source agency within or outside the
recipient agency or the non-Federal agency, except where required by law or essential to the conduct of the matching
program;

      "(I) procedures governing the use by a recipient agency or non-Federal agency of records provided in a matching
program by a source agency, including procedures governing return of the records to the source agency or destruction
of records used in such program;

     "(J) information on assessments that have been made on the accuracy of the records that will be used in such
matching program; and

    "(K) that the Comptroller General may have access to all  records of a recipient agency or a non-Federal agency
that the Comptroller General deems necessary in order to monitor or verify compliance with the agreement.

"(2)(A) A copy of each agreement entered into pursuant to paragraph (1) shall-

            "(i) be transmitted to the Committee on Governmental Affairs of the Senate and the Committee on Government
        Operations of the House of Representatives; and

           "(ii) be available upon request to the public

Public information.


    "B) No such agreement shall be effective until 30 days after the date on which such a copy is transmitted pursuant
to subparagraph (A)(i).

    "(C) Such an agreement shall remain in effect only for such period, not to exceed 18 months, as the Data Integrity
Board of the agency determines is appropriate in light of the purposes, and length of time necessary for the conduct,
of the matching program.

    "(D) Within 3 months prior to the expiration of such an agreement pursuant to subparagraph (C), the Data Integrity Board of agency may, without additional review, renew the matching amendment for a current, ongoing matching program for not more than one additional year if- -

             "(i) such program will be conducted without any change; and

            "(ii) each party to the agreement certifies to the Board in writing that the program has been conducted in compliance
        with the agreement.

     "(p) VERIFICATION AND OPPORTUNITY TO CONTEST FINDINGS. (1) In order to protect any individual whose records are used in matching programs, no recipient agency,  non-Federal agency, or source agency may suspend, terminate, reduce, or make a final denial of any financial assistance or payment under a Federal benefit program to such individual, or take other adverse action against such individual as a result of information produced by such matching programs, until an officer or employee of such agency has independently verified such information.   Such independent verification may be satisfied by verification in accordance with (A) the requirements of paragraph (2); and (B) any additional requirements governing verification under such Federal benefit program.

    "(2) Independent verification referred to in paragraph (1) requires independent investigation and confirmation of any
information used as a basis for an adverse action against an individual including, where applicable-

            "(A) the amount of the asset or income involved,

            "(B) whether such individual actually has or had access to such asset or income for such individual's own use, and

            "(C) the period or periods when the individual actually had such asset or income.

    "(3) No recipient agency, non-Federal agency, or source agency may suspend, terminate, reduce, or make a final denial
of any financial assistance or payment under a Federal benefit program to any individual described in paragraph (1), or
take other adverse action against such individual as a result of information produced by a matching program, (A) unless
such individual has received notice from such agency containing a statement of its findings and informing the individual
of the opportunity to contest such findings, and (B) until the subsequent expiration of any notice period provided by the
program's law or regulations, or 30 days, whichever is later.  Such opportunity to contest may be satisfied by notice, hearing,
and appeal rights governing such Federal benefit program.  The exercise of any such rights shall not affect any rights available
under this section.

    "(4) Notwithstanding paragraph (3), an agency may take any appropriate action otherwise prohibited  by such                 
paragraph if the agency determines that the public health or public safety may be adversely affected or significantly           
threatened during the notice period required by such paragraph.

Public health
and safety.

    "(q)SANCTIONS- (1) Notwithstanding any other provision of law, no source agency may disclose any record which is
contained in a system of records to a recipient agency or non-Federal agency for a matching program if such source agency
has reason to believe that the requirements of subsection (p), or any matching agreement entered into pursuant subsection
(o), or both, are not being met by such recipient agency.

    "(2) No source agency may renew a matching agreement unless-

        "(A) the recipient agency or non-Federal agency has certified that it has complied with the provisions of that agreement; and

        "(B) the source agency has no reason to believe that the certification is inaccurate." .

SEC. 3. NOTICE OF MATCHING PROGRAMS

    (a) NOTICE IN FEDERAL REGISTER.-- Subsection (e) of section 552a of title 5 United States Code, is amended-

             (1) by striking out "and" at the end of paragraph (10),

             (2) by striking out the period at the end of paragraph (11) and inserting in lieu thereof "; and", and

            (3) by adding at the end thereof the following new paragraph:

             "(12) if such agency is a recipient agency or a source agency in a matching pregram with a non-Federal agency,
with respect any establishment or revision of a matching program, 30 days prior to conducting such program, publish
in the Federal Register notice of such establishment or revision.".

    (b) REPORT TO CONGRESS AND OFFICE OF MANAGEMENT AND BUDGET.-- Subsection (r) of section 552a of title 5, United States Code, as redesignated by section 2(b)(l) of this Act, is amended to read as follows:

    "(r)REPORT ON NEW SYSTEMS AND MATCHING PROGRAMS.--Each agency that proposes to establish or make a significant
change in a system of records or a matching program shall provide adequate advance notice of any such proposal (in
duplicate) to the Committee on Government Operations of the House of Representatives, the Committee on Governmental
Affairs of the Senate, and the Office of Management and Budget in order to permit an evaluation of the probable or potential
effect of such proposal on the privacy or other rights of individuals.".
 

 SEC. 4. DATA INTEGRITY BOARD.                                                                                                                                                                                Contracts.

    Section 552a of title 5, United States Code, as amended by section 2(b)(l) of this Act, is amended by adding at the end
thereof the following new subsection:

    "(u) DATA INTEGRITY BOARDS.--(1) Every agency conducting or articipating in a matching program shall establish a Data
Integrity Board to oversee and coordinate among the various components of such agency the agency's implementation of
this section.

    "(2) Each Data Integrity Board shall consist of senior officials designated by the head of the agency, and shall include
any senior official designated by the head of the agency as responsible for implementation of this section, and the inspector
general of the agency, if any.   The inspector general shall not serve as chairman of the Data Integrity Board.

    "(3) Each Data Integrity Board-

       "(A) shall review, approve, and maintain all written agreements for receipt or disclosure of agency records for matching
programs to ensure compliance with subsection (o), and all relevant statutes, regulations, and guidelines;

        "(B) shall review all matching programs in which the agency has participated during the year, either as a source agency or
recipient agency, determine compliance with applicable laws, regulations, guidelines, and agency agreements, and assess the
costs and benefits of such programs;

        "(C) shall review all recurring matching programs in which the agency has participated during the year, either as a source
agency or recipient agency, for continued justification for such disclosures;

Reports.
Public
Information.


    "(D) shall compile an annual report, which shall be submittted to the head of the agency  and the Office of Management     
and  Budget and made available to the public on request, describing the matching activities of the agency, including--              
                                                                                                                                                                      

Contracts.


                "(i) matching programs in which the agency has participated as a source agency or recipient agency;

                "(ii) matching agreements proposed under subsection (o) that were disapproved by the Board;

                "(iii) any changes in membership or structure of the Board in the preceding year;

                 "(iv) the reasons for any waiver of the requirement in paragraph (4) of this section for completion and submission
    of a cost-benefit analysis prior to the approval of a matching program;

     "(v) any violations of matching agreements that have been alleged or identified and any corrective action taken;
     and

                "(vi) any other information required by the Director of the Office of Management and Budget to be included in
    such report;

        "(E) shall serve as a clearinghouse for receiving and providing information on the accuracy, completeness, and reliability
of records used in matching programs;

        "(F) shall provide interpretation and guidance to agency components and personnel on the requirements of this section
for matching programs;

        "(G) shall review agency recordkeeping and disposal policies and practices for matching programs to assure compliance
with this section; and

        "(H) may review and report on any agency matching activities that are not matching programs.

Contracts.

    "(4)(A) Except as provided in subparagraphs (B) and (C), a Data Integrity Board shall not approve any written agreement            
for a matching program unless the agency has completed and submitted to such Board a cost-benefit analysis of the
proposed program and such analysis demonstrates that the program is likely to be cost effective.

        "(B) The Board may waive the requirements of subparagraph (A) of this paragraph if it determines in writing, in accordance with
guidelines prescribed by the Director of the Office of Management and Budget, that a cost-benefit analysis is not required.

        "(C) A cost-benefit analysis shall not be required under subparagraph (A) prior to the initial approval of a written agreement for
a matching program that is specifically required by statute.  Any subsequent written agreement for such a program shall not be
approved by the Data Integrity Board unless the agency has submitted a cost-benefit analysis of the program as conducted under
the preceding  approval of such agreement.

Contracts.

    "(5)(A) If a matching agreement is disapproved by a Data Integrity Board, any party to such agreement may appeal the                
disapproval to the Director of the Office of Management and Budget.  Timely notice of the filing of such an appeal shall be
provided by the Director of the Office of Management and Budget to the Committee on Govern mental Affairs of the Senate
and the Committee on Government Operations of the House of Representatives.

        "(B) The Director of the Office of Management and Budget may approve a matching agreement notwithstanding the disapproval
of a Data Integrity Board if the Director determines that--

             "(i) the matching program will be consistent with all applicable legal, regulatory, and policy requirements;

             "(ii) there is adequate evidence that the matching agreement will be cost-effective; and.

            "(iii) the matching program isr in the public interest.

        "(C) The decision of the Director to approve a matching agreement shall not take effect until 30 days after it is reported to
committees described in subparagraph (A)..

        "(D) If the Data Integrity Board and the Director of the Office of Management and Budget disapprove a matching program
proposed by the inspector general of an agency, the inspector general may report the disapproval to the head of the agency and
to the Congress.

Reports.

    "(6) The Director of the Office of Management and Budget shall,annually during the first 3 years after the date of enactment of       
this subsection and biennially thereafter, consolidate in a report to the Congress the information contained in the reports from the
various Data Integrity Boards under paragraph (3)(D).  Such report shall include detailed information about costs and benefits of
matching programs that are conducted during the period covered by such consolidated report, and shall identify each waiver granted
by a Data Integrity Board of the requirement for completion and submission of a cost-benefit analysis and the reasons for granting the
waiver.

    "(7) In the reports required by paragraphs (3)(D) and (6), agency matching activities that are not matching programs may be
reported on an aggregate basis, if and to the extent necessary to protect ongoing law enforcement or counterintelligence investigations.".

SEG 5. DEFINITIONS.

Subsection (a) of section 552a of title 5, United States Code, is amended-

        (1) by striking out "and" at the end of paragraph (6),

        (2) by striking out the period at the end of paragraph (7) and inserting in lieu thereof a semicolon, and

        (3) by adding at the end thereof the following new paragraphs:

                "(8) the term `matching program'--

                        "(A) means any computerized comparison of--

                                    "(i) two or more automated systems of records with non-Federal records for the purpose of--

                                            "(I) establishing or verifying the eligibility of, or continuing compliance with statutory and regulatory
                                                    requirements by, applicants for, recipients or beneficiaries of, participants in, or providers of services
                                                    with respect to, cash or in-kind assistance or payments under Federal benefit programs, or

                                            "(II) recouping payments or deliquent debts under such Federal benefit programs, or

                                    "(ii) two or more automated Federal personnel or payroll systems of records or a system of Federal personnel
                                            or payroll records with non-Federal records,

                        "(B) but does not include--

                                     "(i) matches performed to produce aggregate statistical data without any personal identifiers;

                                     "(ii) matches performed to support any research statistical project, the specific data of which may not be used to
                                            make decisions concerning the rights, benefits, or privileges of specific individuals;

                                    "(iii) matches performed, by an agency (or component thereof) which performs as its principal function any activity
                                            pertaining to the enforcement of criminal laws, subsequent to the initiation of a specific criminal or civil law
                                            enforcement investigation of a named person or persons for the purpose of gathering evidence against such
                                            person or persons;

                                     "(iv) matches of tax information (I) pursuant to section 6103(d) of the Internal Revenue Code of 1986, (II) for purposes of
                                              tax administration as defined in section 6103(b)(4) of such Code, (III) for the purpose of intercepting a tax refund due
                                              an individual under authority granted by section 464 or 1137 of the Social Security Act; or (IV) for the purpose of
                                              intercepting a tax refund due an individual under any other tax refund intercept program authorized by statute which
                                              has been determined by the Director of the Office of Management and Budget to contain verification, notice, and
                                               hearing  requirements that are substantially similar to the procedures in section 1137 of the Social Security Act;

                                     "(v) matches-

                                              "(I)  using records predominantly relating to Federal personnel, that are performed for routine administrative purposes
                                                  (subject to guidance provided by the Director of the Office of Management and Budget pursuant to subsection
                                                    (v)); or

                                            "(II) conducted by an agency using only records from systems of records maintained by that agency, if the purpose
                                                of the match is not to take any adverse financial, personnel, disciplinary, or other adverse action against Federal
                                                personnel; or

                                    "(vi) matches performed for foreign counterintelligence purposes or to produce background checks for security clearances
                                            of  Federal personnel or Federal contractor personnel;

        "(9) the term 'recipient agency' means any agency, or contractor thereof, receiving records contained in a system of records
from a source agency for use in a matching program;

        "(10) the term 'non-Federal agency' means any State or local government, or agency thereof, which receives records contained
in a system of records from a source agency for use in a matching program;

        "(11) the term 'source agency' means any agency which discloses records contained in a system of records to be used in a
matching program, or any State or local government, or agency thereof, which discloses records to be used in a matching program;
 

        "(12) the term 'Federal benefit program' means any program administered or funded by the Federal Government, or by any
agent or  State on behalf of the Federal Government, providing cash or in-kind assistance in the form of payments, grants, loans,
or loan guarantees to individuals;
 

        "(13) the term 'Federal personnel' means officers and employees of the Government of  the United States, members of the
uniformed services (including members of the Reserve Components), individuals entitled to receive immediate or deferred
retirement benefits under any retirement program of the Government of the United States (including survivor benefits).".
 

SEC. 6. FUNCITONS OF THE DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET.

    (a) AMENDMENT.-Section 552a of title 5, United States Code, is further amended by adding at the end thereof the following:

        "(v) OFFICE OF MANAGEMENT AND BUDGET RESPONSIBILITIES.-The Director of the Office of Management and Budget shall-

Regulations.

                "(1) develop and, after notice and opportunity for public comment, prescribe guidelines and regulations for the use of        
        agencies in implementing the provisions of  this section; and

                "(2) provide continuing assistance to and oversight of the implementation of this section by agencies.".

    (b) IMPLEMENTATION GUIDANCE FOR AMENDMENTS.-The Director shall, pursuant to section 552a(v) of title 5, United States Code,      Regulations.
    develop guidelines and regulations for the use of agencies in implementing the amendments made by this Act not later than             
    8 months after the date of enactment of this Act.                                                                                                                                               
 

5 USC
552a note.
5 USC 552a note

    (c) CONFORMING AMENDMENT. - Section 6 of the Privacy Act of 1974 is repealed.                                                                                      
 

SEC. 7. COMPILATION OF RULES AND NOTICES.

    Section 552a(f) of title 5, United States Code, is amended by striking out "annually" in the last sentence and inserting "biennially"..

SEC. 8. ANNUAL REPORT.

    Subsection (s) of section 552a of title 5, United States Code (as redesignated by section 2 of this Act), is amended-

            (1) by striking out "ANNUAL" in the heading of such subsection and inserting "BIENNIAL.";

            (2) by striking out "annually submit" and inserting "biennially submit";

            (3) by striking out "preceding year" and inserting "preceding 2 years"; and

            (4) by striking out "such year" and inserting "such years".
 

 SEC. 9. RULES OF CONSTRUCTION.                                                                                                                                                                           

5 USC 552a note.

    Nothing in the amendments made by this Act shall be construed to authorize-

        (1) the establishment or maintenance by any agency of a national data bank that combines, merges, or links information on
individuals maintained in systems of records by other Federal agencies;

        (2)the direct linking of computerized systems of records maintained by Federal agencies;

        (3) the computer matching of records not otherwise authorized by law; or

        (4) the disclosure of records for computer matching except to a Federal, State; or local agency.
 

 SEC. 10. EFFECTIVE DATES.                                                                                                                                                                                       

5 USC 552a note.

    (a) IN GENERAL-- Except as provided in subsection (b), the amendments made by this Act shall take effect 9 months after the date
of enactment of this Act.

    (b) EXCEPTIONS.-- The amendment made by sections 3(b), 6, 7, and 8 of this Act shall take effect upon enactment.
 

    Approved October 18, 1988.
 
 
 
 



LEGISLATIVE HISTORY-S. 496 (H.R. 4699r
 

HOUSE REPORTS: No. 100-802 accompanying H.R. 4699 (Comm. on Government Operations)

SENATE REPORTS:No. 100-516 (Comm. on Governmental Affairs).

CONGRESSIONAL RECORD:

        Vol. 133 (1987) May 21, considered and passed Senate.

        Vol. 134 (1988): Aug. 1, HR 4699 considered and passed House; proceedings vacated and S. 496, amended, passed in lieu.

                                Sept 20, Senate concurred in House amendment with an  amendment.

                               Oct. 3. House concurred in Senate amendment.