Action Required: SESA Administrators are requested to provide the attached Directories to appropriate staff.

References: JTPA Interim Final Regulations published on December 29, 1992; TEIN No. 16-92; TEGL No. 2-92; TEGL No. 4-92; and TEGL No. 6-92. Background: Public Law 102-367, dated September 7, 1992, established major revisions to JTPA. Section 701(i) of Public Law 102-367 permits the Department to "establish such rules and procedures as may be necessary to provide for an orderly implementation of the amendments...." Interim final rules published December 29, 1992, provide policy on transition to the new requirements at 20 CFR 627 Subpart I. The JTPA Amendments of 1992 made significant enhancements to program requirements and administrative systems. The regulations state that transition activities will be accomplished during the balance of Program Year (PY) 1992 in order to fully implement the Amendments on July 1, 1993, unless otherwise stated. Comments on the interim final rule have indicated considerable concern with the transition provisions. The anticipated expansion and enrichment of the Title II-B program for the upcoming summer has also prompted a reexamination of transition provisions. Accordingly, pursuant to the authority provided by Section 701(i) of Public Law 102-367, this issuance provides rules and procedures which the Department finds necessary to provide for the orderly implementation of the Amendments. It is intended that these guidelines may be relied on by States and SDAs. The Department will issue conforming amendments to the JTPA Interim Final Regulations as soon as possible. Program Implementation: The Department recognizes that implementation by the States and SDAs of the new program design requirements, particularly objective assessment and development of the individual service strategies (ISS), may require additional time to fully implement beyond July 1, 1993. The Department intends that the program design changes be undertaken in a manner which ensures the long term quality of service delivery in JTPA. Reasonable efforts to implement the provisions of 20 CFR 628.515, 628.520, and 628.530, objective assessment, individual service strategy, and referrals of participants to non-Title II services as soon after July 1, 1993 as possible, are expected to be made. However, all new participants will not be expected to initially receive such services until January 1, 1994. The Department acknowledges that the quality of those activities is expected to be improved and refined during PY 1993, as are all aspects of the JTPA program. Monitoring of the program aspects of the Amendments during PY 1993 by all levels of the JTPA system, including the Department, should focus heavily on improving service quality. In determining compliance with the program design requirements during PY 1993, the grant officer will consider the extent to which the States and SDAs have made good faith efforts to implement the new provisions during PY 1993. Immediate action: In order to make the transition from the old to the new requirements, the JTPA Regulations at 20 CFR 627.902 identified actions that must be accomplished by the Governor prior to July 1, 1993. These actions cover four major areas: (a) Funding; (b) Participants; (c) Procurement; and (d) Reporting. a. Funding Effective July 1, 1993, PY 1993 funds must be administered in accordance with the new legislation and regulations. PY 1992 funds unexpended on June 30 may be expended after July 1 to serve "grandparented" participants under "old" rules, or they may be expended after July 1 to serve "new" or "old" participants under new rules. Whatever amount is used under the "old" rules is to be reported on the "old" reporting form. Whatever amount is used under the "new" rules is to be reported on the "new" reporting form. There will be an increase allowed in the administrative cost limitation for PY 1992 funds from 15 percent to 20 percent, with a corresponding adjustment to the other cost limitations. Specifically, not less than 80 percent of Title II-A funds may be expended for training and participant support, and not less than 65 percent may be expended for training. Any unexpended PY 1992 funds to be used after June 30, 1993, may be used according to the "old" rules (20 CFR 626 et al., published September 22, 1989) so long as these funds are used to provide training to participants who were enrolled on or before June 30, 1993. When all such participants are terminated, remaining unspent funds must be used and accounted for in accordance with the rules implementing the 1992 Amendments. States and SDAs should identify PY 1992 and earlier funds that will be used in PY 1993 for programs operating under the new Amendments. Of these funds, not less than 40 percent, or the rate approved by the Governor as established under Section 203(b)(2), must be used in PY 1993 as Title II-C funds to provide services to eligible youth. The cost limitations, cost classifications, and allowable costs requirements in the 1992 JTPA Amendments apply to these funds. The Interim Final Regulations provide that administrative cost pool funds must be allocated on the basis of benefits received, rather than the past practice in some States and SDAs of allocating costs on the basis of proportionate fund contribution to the pool. Many commentors viewed this as unduly restrictive. It is important to note that States, in setting policy in this area, may apply whatever allocation methodology is in accordance with generally accepted accounting practices and is acceptable to its auditors. Pursuant to TEGL 2-92, any available section 202(b)(3) PY 1992 or earlier "6 percent" funds may be used to develop and implement data collection and management information systems to track the program experience of participants. The JTPA Amendments of 1992 provide SDAs with the option to transfer funds between the "Parts" within Title II. For the PY 1993 planning process, SDAs may use available PY 1992 and earlier Title II-A funds for Titles II-A and Title II-C purposes in PY 1993, and may also transfer PY 1993 Title II-A, II-B, and II-C funds to Titles II-A and II-C. Guidance that address this was issued separately in TEGL No. 6-92. b. Participants "Grandparenting" Participants Participants enrolled in JTPA programs prior to July 1, 1993, may continue to be served under the "old" rules and regulations. As previously noted, all new Title II-A and II-C participants enrolled after January 1, 1994, must be served under the requirements of the 1992 JTPA Amendments, e.g., assessment, ISS, and referral. The 65 percent barrier requirement for Titles II-A and IIC, however, will apply to all participants newly enrolled after June 30, 1993. The 50 percent out-of-school participants requirement at 20 CFR 628.803(h) will not be the subject of compliance review until the period following July 1, 1994. During PY 1993, however, SDAs must show improvement in the proportion of out-of-school youth being served and ETA and States will monitor performance in increasing the proportion. The Interim Final Regulations call for all participants to come under the requirements of the Amendments as of July 1, 1994. Final Regulations will allow participants on board prior to July 1, 1993 to continue service under the old arrangements until they terminate, which may be after June 30, 1994. c. Procurement Section 627.904(e) of the Interim Final Regulations states that "All procurements initiated on or after July 1, 1993, shall be governed by and follow the requirements in 20 CFR 627.420...." Initiation of a procurement, for purposes of this section, is considered to be either the award of a sole source grant/contract, the award of a small purchase contract or the issuance of an Invitation For Bid or Request For Proposal. In accordance with 20 CFR 627.905, contracts, awards, and agreements entered into on or before June 30, 1993, are to be used to serve only participants enrolled on or before June 30, 1993, unless the contracts, awards and agreements are modified to comply with the new amendments and regulations. d. Reporting Financial Reports States/SDAs may continue to use PY 1992 money for grandparented participants under old requirements, or PY 1992 funds may be used for new participants under new requirements. PY 1992 money used to implement the 1992 Amendments will be reported on the new Title II financial report format, and will be subject to the new financial management requirements. States will continue to report on the JTPA Annual Status Report (JASR), as usual, PY 1992 and earlier money that is not used to implement the 1992 Amendments. Reporting instructions for PY 1993 are forthcoming. As soon as OMB approval has been secured, the Department will issue instructions for the new fiscal reports. PY 1992 and earlier funds used for PY 1993 activity will assume PY 1993 characteristics and cost limitations and audit requirements. They will not, however, lose their appropriation identity. These funds will be reported separately on the new financial report under new cost categories in accordance with the reporting instructions issued for PY 1993 funds. Participant Reporting All current annual and semi-annual reporting requirements for Title II and Title III will continue until full implementation of the Standardized Program Information Reporting (SPIR) system. Full SPIR implementation is required for PY 1993, beginning July 1, 1993. For PY 1992, a dual system of participant reporting will be required as follows: (1) PY 1992 aggregate data required in the JASR and Worker AdJustment Program Annual Program Report (WAPR) will be reported no later than August 15, 1993; and (2) SPIR participant reports for all individuals terminating during PY 1992 will be reported no later than November 15, 1993. Reports will contain, at a minimum, that information needed to complete the JASR and WAPR. Title II-B information will be reported on the JTPA Summer Performance Report. Additional requirements may be added, depending on the proposed summer supplemental. Other Issues of Immediate Concern: a. State Human Resource Investment Council (HRIC) Pursuant to Section 701 of the JTPA as amended, States may establish an HRIC that would supersede and replace the State Job Training Coordination Council and other State councils. Section 703(c) provides that a State electing to establish an HRIC shall certify to the Secretary such establishment at least 90 days before the beginning of the 2-program year planning period. The 2-year period for the next State and local plans begins July 1, 1994. Therefore, an HRIC may be established now, or at any time during PY 1993. The certification for the HRIC is required 90 days prior to July 1, 1994. b. Instructions necessary for SDAs to operate the 1993 summer Program There is contradictory language in the Interim Final Regulations at 20 CFR 627.902(j) and 627.904(k). The calendar year 1993 Title II-B Summer Youth Employment and Training Program will be governed by the Act and regulations in effect prior to the 1992 JTPA Amendments pursuant to 20 CFR 627.904(k). Additional guidance will follow related to the proposed summer supplemental. c. Capacity building and technical assistance The JTPA Amendments of 1992 made capacity building and technical assistance priorities at the National, State and local levels. Governors are encouraged to use Section 202(c)(1)(B) funds to develop a Statewide capacity building and technical assistance strategy, including provisions for SDAs in State planning. Funds may be used for capacity building purposes beginning July 1, 1993. Consideration should be given to directing resources and/or training directly to staff of SDAs and local service providers. Other coordinated capacity building arrangements, including cost-sharing approaches, should also be considered. d. Performance standards Consistent with the transition provisions in Section 701, implementation of new performance standards requirements will begin on July 1, 1994 (PY 1994). Until that time, current requirements pertaining to measures and applications (i.e., adjustments, incentive awards, and imposition of sanctions) will remain in effect. Therefore, for calculating PY 1992 SDA performance on the post program performance employment and earnings measures, States are to use the PY 1992 JASR follow-up information (based on the first three quarters of PY 1992 and the fourth quarter of PY 1991). A similar procedure will be used for PY 1993 (using the first three quarters of PY 1993 from the August 15, 1994 SPIR and the fourth quarter of PY 1992 derived from the November 15, 1993 SPIR). This is consistent with the procedures used since the inception of post program measures. e. Grievances The transition provisions contained in the Interim Final Regulations appear to imply that "new" grievances procedures are required at the State and SDA levels as a result of the JTPA Amendments of 1992. This is not really the case. The basic requirements at Section 144 of the Act, to have and maintain a JTPA grievance procedure for complaints and alleged violations of the Act and regulations, were not changed by the Amendments. The Amendments revised Section 144 by adding new subsections which apply to the handling of alleged Section 143 labor standards violations. The States and SDAs will need to modify their grievance procedures accordingly to cover such complaints. Complaints and grievances will continue to be handled in accordance with established grievance procedures, except as modified by the changes in the Amendments to Section 144, and other minor revisions set forth at Subparts E, F, and H of the Interim Final Regulations. f. Coordination Requirements New coordination and linkage requirements are expected to be developed during PY 1993 so as to constructively impact the planning and coordination of PY 1994-95 activities under Titles I, II and III. g. Plans Modifications The Interim Final Regulations call for the modification of State and local job training plans. The plans need to reflect only those programmatic revisions which are necessary to implement the requirements that take effect on July 1, 1993 or during PY 1993. The plans must also reflect provisions for the new coordination requirements for local adult and youth programs which must be in place during PY 1993. h. SDA redesignation Policies for the designation of SDAs need not affect SDAs prior to the designations for PY 1994. It is expected that these policies will apply to SDA designations prior to the 1994-1995 program year Period . Action: States should ensure that transition activities are consistent with this guidance.

References: Chapter IV, Section 6, and Chapter V, Section 1, ET Handbook No. 391. Background: Recently, the Office of Personnel Manage-ment issued official 1995 pay tables authorized by the President reflecting new pay raises for GS employees. Preliminary information was previously provided in UIPL No. 11-95, dated January 5, 1995. Instructions: Replace the attachments to UIPL 11-95 with the attachments provided in this directive. Action Required: SESAs should provide copies of this directive to appropriate staff engaged in UCFE claims activities and other staff who were provided a copy of UIPL 11-95.

References. a. JTPA Regulations at 20 CFR Part 632. b. DINAP Bulletin 85-15, Administrative Cost Limit. c. DINAP Bulletin 86-9, Administrative Cost Pool. d. DINAP Bulletin 86-10, Linkages and Program Coordination. e. DINAP Bulletin 87-27, Technical Assistance Guide on Linkages and Program coordination. f. DINAP Bulletin 88-20, Administrative Requirements for DOL Grantees. g. DINAP Bulletin 90-24, Instructions for Completing PY 1991 Comprehensive Annual Plan. h. DINAP Bulletin 91-6, Reading Assessment for JTPA Title IV-A Programs. i. DINAP Bulletin 91-22, Instructions and Reporting Requirements. j. DINAP Bulletin 92-15, Job Training Reform Amendments of 1992. Information. a. General. A new Comprehensive Annual Plan (CAP) must be submitted to obtain funding for Program Year (PY) 1993, which is the third year under the current four year Master Plan agreement. Where applicable, a new Summer Plan (SP) for the summer of 1993 must also be submitted. A Master Plan is not required to be submitted. However, modifications to the Master Plan may be submitted when required. The Master Plan instructions set forth in DINAP Bulletin 90-24 should be followed for this purpose. b. Special Instructions. The documents referenced in Section 2, above, are to be used as appropriate in the preparation of the PY 1993 CAP and CY 1993 SP. Follow the Budget Information Summary (BIS) and Program Planning Summary (PPS) instructions in DINAP Bulletin 91-22. Follow the reporting instructions in DINAP Bulletin 91-22. c. Common Errors to Avoid. over the years, certain kinds of errors in the CAP and SP have appeared repeatedly. Grantees should be especially careful to avoid these errors. This will enable DINAP to facilitate the processing of CAPs and SPs and thereby prevent delays in funding. The kinds of errors of concern are listed below: -- The required number of copies of forms are not submitted. -- Required original signatures are missing. -- Arithmetic and data errors appear in the Budget Information Summary and Program Planning Summary. Dates are often wrong. The numbers often do not agree with the narrative. -- Forms are signed by unauthorized person(s). -- The signature is in the wrong block of the signature sheet. -- Irrelevant and unrequited material is submitted, e.g., job descriptions and personal histories of administrative staff, descriptions of accounting systems, etc. -- The signature sheet is used to convey information that should properly be sent in a letter. -- The numbers used in calculating performance standards are inconsistent with the numbers used in the Budget Information Summary and Program Planning Summary. -- Instructions for completing the narrative are not followed. d. Carry-in Policy. The carry-in policy is as follows: (1) Twenty percent of total available Title IV-A funds can be carried in from PY 1992 to PY 1993.* (2) Twenty percent of total available Title II-B funds can be carried in from the 1993 Summer Title II-B program to the 1994 Summer Title II-B program.* (3) The vast majority of grantees have managed their Section 401 grants in a manner that has kept their carry-in at 15 percent or less of the total available Section 401 funds. Grantees are aware of the fact that there are thousands of Native Americans who need help immediately and to carry in funds is to neglect the immediate needs of these people. Every effort should be made to keep carry-in down to an absolute minimum amount. *Total available funds for any funding period are defined as new money allocated for that funding period plus allowable carry-in from the prior funding period. This is the figure reflected on line II of the BIS from which the 15 percent carry in limit is calculated. e. Modification Policy for Program Year 1993. Attachment D contains the procedures for submitting modifications. f. Policy on the Use of Employability Development Plans and Testing Assessment. As was stated in DINAP Bulletin 90-24, the revisions previously introduced in the Section 401 Performance Standards System mandate that each grantee adopt a system that will capture the data necessary to document individual participant enhancements. To record increases in employability and to track participant progress, it is still Departmental policy to encourage grantees to adopt and use some form of employability development plan which fulfills these data needs. Additional insights about the enhancement measure can be obtained from DINAP Bulletin 91-6, which also provides additional guidelines for test administration and other participant assessment practices. g. Performance Management Goals for PY 1993. The effects of performance standards on program design, service delivery and participants served have drawn increased public attention within the JTPA system, and particularly within the grantee community. For this reason, current performance measures were reviewed for their contribution to advancing current Departmental policy as part of a lengthy process of consultation with the Native American Advisory Committee and the Performance Standards Technical Work Group. Program objectives developed jointly with the Native American Advisory Committee support Departmental goals set for the JTPA employment and training programs and, in addition, include goals relevant to the JTPA Section 401 program. As a result of this consultative process, performance standard revisions were proposed to support the following ETA and JTPA Section 401 program goals: -- Targeting services to a more at-risk population. -- Improving the quality and intensity of services that lead to long-term employability and increased earnings. -- Placing greater emphasis on basic skills acquisition to qualify for employment or advanced education and training. -- Promoting comprehensive coordinated human resource programs to address the multiple needs of at-risk populations. -- Advancing the economic and social development of Indian and Native American communities in ways that promote each community's goals and lifestyles. -- Designing and implementing a system that is objective, equitable and understandable to the Indian and Native American JTPA grantee and one which provides a standard of accountability for program performance. h. Regulations Implementing the Job Training Reform Amendments of 1992. The Department expects that final regulations for Section 401 will be published before July 1, 1993. Should the regulations not be published in final until after July 1, 1993, the statutory Amendments applicable to all programs under the Act must still be implemented on July 1. These include prohibitions against using JTPA funds for economic development/employment generating activities, restrictions on using JTPA funds to serve plants which relocate, changes in program income and on-the-job training, and nondiscrimination requirements. The remaining changes in the final regulations, should they not be published until after July 1, shall be implemented as soon as practicable after the publication date of the regulations. Guidance on these changes will be provided through technical assistance bulletins and workshops. For the Title II-B Summer Youth program, grantees which receive Title II-B funds will comply with the current regulations set forth at 20 CFR 632.250 through 632.263 for the Summer of 1993. The revised regulations will apply to the Title II-B program of 1994. i. Community Benefit Performance Measure. This measure has been deleted from the Performance Standards system because it may conflict with the prohibition on the use of JTPA funds for economic development in the JTPA Amendments. Very limited use of this measure has been made by grantees in the past. Action. Grantees must follow the instructions in this bulletin in preparing their PY 1993 CAPs and, where applicable, CY 1993 SPs. They should be mailed to the following address: Herbert Fellman, Chief Division of Indian and Native American Programs 200 Constitution Avenue, N.W. Room N-4641 Washington, D.C. 20210 ATTENTION: CAP/SP/Desk PLAN DUE IN DINAP DOL APPROVAL BY SP* March 31, 1993 May 14, 1993 CAP April 16, 1993 June 18, 1993 *Grantees who need an early approval of their SP should submit the SP well in advance of submitting the CAP. Questions. Contact your DINAP Federal Representative.

References: TEGL No. 2-94: "Dual Enrollment of Trade-Impacted Workers in Job Training Partnership Act (JTPA) Title III and Trade Adjustment Assistance (TAA) Programs, and Application Procedures for Funding for Special Projects," dated August 19, 1994; GAL No. 7-94: "Operating Instructions for Implementing the Amendments to the Trade Adjustment Assistance for Workers Program in Title V of the North American Free Trade Agreement (NAFTA) Implementation Act," dated December 28, 1993 (including the Attachment, "Statement of Administrative Action" which accompanied the North American Free Trade Agreement (NAFTA) Implementation Act); and TEGL No. 7-93: "Transitional Adjustment Assistance Provisions Related to the Implementation of the North American Free Trade Agreement (NAFTA)," dated April 19, 1994. Dual Enrollment: As discussed in TEGL No. 2-94, dual enrollment of dislocated workers in Trade Adjustment Assistance (TAA) and Title III programs is a valuable program practice which can provide a real opportunity to improve the quality of services and increase customer satisfaction for Trade participants. To encourage and support this program coordination, copies of every TAA and NAFTA- TAA petition received by the Department of Labor will be provided to the appropriate State Title III Dislocated Worker Unit for information and follow-up. Further, as provided for in TEGL No. 2-94 and revised in this Change 1, State JTPA Liaisons may request Title III National Reserve Account funds when needed to support establishment and/or expansion of dual enrollment efforts. NAFTA Impacted Workers: During the debates on the North American Free Trade Agreement, and as described in the "Statement of Administrative Action," the Administration had committed to provide effective readjustment assistance to workers impacted by NAFTA. This commitment for effective assistance under both NAFTA-TAA and Title III programs is discussed in GAL No. 7-94 and TEGL No. 7-93. States are encouraged to enroll all trade-impacted dislocated workers, especially those affected by NAFTA, in the Title III program to ensure that the workers have access to all the services needed to help them get a new job. This includes workers certified under TAA and NAFTA-TAA, as well as other trade-impacted workers who are not eligible for assistance under NAFTA-TAA, as explained in TEGL No. 7-93. Special Projects: In addition to broadening the dual enrollment efforts described in TEGL No. 2-94, the Department is making available Title III national reserve account funds for special projects to help workers dislocated as a result of NAFTA, as well as those being served under TAA. The original application deadline for special project funding requests under TEGL No. 2-94 of December 31, 1994 is extended until further notice. These Special Project funds can be used to: 1) improve coordination between the programs and increase the number of TAA or NAFTA-TAA certified workers being dual enrolled; 2) expand the services and benefits available for workers certified under TAA or NAFTA-TAA; or 3) provide services to NAFTA- impacted workers dislocated from secondary firms. The abbreviated application procedures, the Title III/TAA Special Project Assurances, Special Project Implementation Schedule Template, and Special Project Cumulative Quarterly Budget Projection Template which were attachments to TEGL No. 2-94 have been further streamlined and revised. The revised versions are attachments to this Change 1 and should be used to request funds for special projects described above. Action: a. Recipients of this TEGL should make it available to appropriate JTPA and TAA officials throughout the State and substate dislocated worker system, and encourage efforts aimed at dual enrollment and program coordination. b. Applications for funds for dual enrollment and/or NAFTA- impacted workers should be prepared in accordance with guidance in the attachments, and mailed to: Office of Grants and Contracts Management, Division of Acquisition and Assistance, Employment and Training Administration, U. S. Department of Labor, Room S-4203, 200 Constitution Avenue, N.W., Washington, D.C. 20210, Attention: Dislocated Worker Grants, Barbara J. Carroll, Grant Officer. A copy of the application should also be submitted to the appropriate Regional Office. Applications are currently being accepted and can be submitted until further notice.

References: Title I of the Emergency Unemployment Compensation Act of 1991, P.L. 102-164, as amended by P.L.s 102-182, 102-244, 102-318, and the Emergency Unemployment Compensation Amendments of 1993, P.L. 103-6 (H.R. 920); the Federal-State Extended Unemployment Compensation Act of 1970 (FSEUCA) as amended; 20 CFR Part 615; GAL 12-92 and GAL 12-92, Change 1; GAL 7-93; UIPL 9-92 and Changes; the Trade Act of 1974 (19 U.S.C. 2271 et seq.); 20 CFR Part 617; and GAL 10-92. Background: Title I of the Emergency Unemployment Compensation Act of 1991 created the Emergency Unemployment Compensation (EUC) program. The EUC Act of 1991 has been amended several times including the amendments made by Section 2 of the Emergency Unemployment Compensation Amendments of 1993 (P.L. 103-6), which are applicable to weeks beginning after March 6, 1993. Effective upon enactment (March 4, 1993), Section 4 of P.L. 103-6 provides for establishing a program to profile new claimants under each State law for regular compensation (which includes compensation payable pursuant to 5 U.S.C. Chapter 85) to determine which claimants may be likely to exhaust regular compensation and may need reemployment assistance. Separate guidance will be issued at a later date to inform States and SESAs of the requirements and specifications of that program. The Employment and Training Administration (ETA) issued controlling guidance for the States and State agencies in the operating instructions in GAL 4-92, and 4 Changes thereto, for implementation and administration of the EUC program. These were all published in the Federal Register. Because of the number of changes due to the amendments, particularly the Unemployment Compensation Amendments of 1992 (P.L. 102-318 enacted July 3, 1992), and because of needed editorial corrections, the ETA issued a consolidation of the Attachments to GAL 4-92 in GAL 12-92, dated September 11, 1992. The compilation of the 5 separate documents in GAL 12-92 became the controlling guidance for the States and cooperating State agencies in the administration of the EUC program. GAL 12-92 was published in the Federal Register on November 16, 1992 at 57 FR 54106. GAL 12-92, Change 1, was issued on February 16, 1993, which provided operating instructions to the States and State agencies relative to the reports required under Attachment C to GAL 12-92, and that effective on or about February 16, 1993, the reports were to be submitted electronically rather than through the use of manually submitted forms. Appropriate changes to Attachment C, based on Change 1, are reflected in this Change 2. Under the amendments made by Section 2 of P.L. 103-6 to Title I of the EUC Act of 1991, the phase-out date of the EUC program is changed to October 2, 1993 and the termination date is changed to January 15, 1994. In addition, Section 2(c) of P.L. 103-6 amended Section 101(e)(1) of the EUC Act of 1991 to provide that the Governor's election (if State law permits) to trigger "off" an extended compensation period in order to provide payment of EUC is not applicable with respect to any extended compensation period beginning after October 2, 1993 (this was previously March 6, 1993). Section 5 of P.L. 103-6 provides the financing provisions to carry out the amendments made by Section 2. The operating instructions in GAL 12-92, GAL 12-92, Change 1, and this Change 2 (including Attachments A, B, and C) are issued to the States and cooperating State agencies and constitute the controlling guidance provided by the Department of Labor in its role as the principal in the EUC program. As agents of the United States, the States and cooperating State agencies may not vary from the operating instructions in GAL 12-92, GAL 12-92, Change 1, or this Change 2 (or any subsequent or supplemental operating instructions) without the prior approval of the Department of Labor. Attachment A--Changes to Operating Instructions: a. In the Table of Contents, under Section III.C. (page 3), insert new topic line "8.", entitled "8. Suspension of Requirements" and designate page number "30.", and change the number of existing topic line "8." to "9.". (See the addition of new paragraph "8." in item "l." below.) b. In the Table of Contents, under Section III.L. (page 4), insert new topic line "7.", entitled "7. Suspension of Requirements" and designate page number "46.", and change the number of existing topic line "7." to "8.". (See the addition of new paragraph "7." in item "p." below.) c. On page 1 of Attachment A, change the heading of Section I. to read: "I. Section-by-Section Explanation of Title I of Public Law 102-164, as amended by Public Laws 102-182, 102-244, and 102- 318 and further amended by P.L. 103-6." d. In Sections I.B.5.a.(ii) and I.B.5.b. (pages 2 and 3), change the date of "March 6, 1993" to "October 2, 1993", each place it appears. e. In Section I.C.10., entitled,"Effective Dates." (page 7), change the date of "March 6, 1993" to "October 2, 1993" and the date of "June 19, 1993" to "January 15, 1994", each place such dates appear. f. In Section I.E. (page 8), add the following "NOTE" after paragraph 2., entitled "Authorization." "NOTE: Section 5 of P.L. 103-6 authorizes the payment of EUC benefits (for weeks of unemployment attributable to new claims filed after March 6, 1993) from general revenue funds to be included in the Department of Labor Appropriation Acts to be transferred to the "extended unemployment compensation account". The administrative funds for the extension of the program under P.L. 103-6 will be provided from the contingency reserves in the "State Unemployment Insurance and Employment Service Operations" appropriation. (See amendments made to Attachment B, Fiscal Instructions, and Attachment C, Reporting Instructions, by GAL 12-92, Change 2.)" g. In Section I.G.2.b. (page 10), change the date of "March 6, 1993" to "October 2, 1993". h. In Section III.A.1., the definition of "Act" (page 20), change the phrase after the citation to "Public Law 102-164," to read "as amended by Public Laws 102-182, 102-244, and 102-318, and further amended by P.L. 103-6." i. In Section III.A.3., the definition for "Period of Eligibility" (page 20), change the date of "March 6, 1993" to "October 2, 1993". j. In Section III.B. (page 22), change the date of "March 6, 1993" to "October 2, 1993" each place it appears, and change the date of "June 19, 1993" to "January 15, 1994". k. In Section III.C.3. (page 26), change the date of "March 6, 1993" to "October 2, 1993". l. In Section III.C. (page 30), renumber existing paragraph "8." as "9." and add the following new paragraph 8., entitled "8. Suspension of Requirements." "8. Suspension of Requirements. The provisions of paragraphs 5., 6., and 7., of this Section III.C., are suspended for weeks of unemployment beginning after March 6, 1993. In lieu thereof, provisions of State law applicable to claims for regular compensation shall apply. (See GAL 7-93 for specific actions required by States.)" m. In Section III.E.2.g. (page 34), change the date of "March 6, 1993" to "October 2, 1993" and change the date of "June 19, 1993" to "January 15, 1994", each place they appear. n. In Section III.E.4.b. (page 35), change the date of "March 6, 1993", to "October 2, 1993", each place it appears. o. In Section III.H.2.c. (page 39), add the following "NOTE" after the last paragraph: "NOTE: For weeks of unemployment beginning after March 6, 1993, liable States will apply the work search and suitable work requirements applicable to the payment of claims for regular compensation to EUC claims." p. In Section III.L. (page 46), renumber existing paragraph "7." as "8." and add the following new paragraph 7., entitled "7. Suspension of Requirements.". 7. Suspension of Requirements. The provisions of paragraphs 4., 5. and 6. of this Section III.L. are suspended for weeks of unemployment beginning after March 6, 1993. State law job prospects classification, active search for work, suitable work and work registration provisions required of claimants for regular compensation will apply to EUC claimants." q. In Section IV (page 54), add the following new paragraph "D." after existing paragraph "C.". "D. The provisions of paragraphs A. and B., and the last sentence in paragraph C., do not apply to weeks of unemployment beginning after March 6, 1993. State law provisions for regular compensation concerning work registration, job prospects classification and work tests will be applicable to EUC claimants." Attachment B--Changes to Fiscal Instructions: a. In the fourth paragraph of Section 1.a., add the following new sentence at the end: "Funds to pay EUC benefits authorized by P.L. 103-6 will be drawn from the Extended Unemployment Compensation Account (EUCA) in the Unemployment Trust Fund. Money in the EUCA will be derived from the Advances to the Unemployment Trust Fund and other funds appropriation." b. In the fifth paragraph of Section 1.a., replace the existing last sentence with the following: "However, States will be required to identify separately on the EUC ETA 2112, EUC payments for weeks of unemployment attributable to initial claims filed on or before July 4, 1992, weeks of unemployment attributable to initial claims filed after July 4, 1992 through March 6, 1993, and weeks of unemployment attributable to initial claims filed after March 6, 1993 so that charges to the appropriate sources of funds can be made. (See Attachment C, Reporting Instructions.)" c. At the end of the second paragraph of Section 1.b., add the following new sentence: "Funds to pay UI EUC administrative costs resulting from P.L. 103-6 are provided through the FY 1993 Labor/HHS Appropriations Act using the contingency reserve language in the State Unemployment Insurance and Employment Service Operations account." d. In Section 1.b, delete the last sentence in the fourth paragraph that begins with the word "States". e. In the last paragraph of Section 1.b., change the parenthetical phrase after the phrase "law changes" to read; "(e.g., P.L. 102-244, P.L. 102-318 and P.L. 103-6 (H.R. 920))". In addition, add the following phrase in the second sentence after the phrase "EUC claims" and before the phrase "will be computed": "and notification and reassessment of eligibility required by P.L. 102-318 of previously denied EUC claimants per guidance furnished in GAL 7-93". In addition, in the fourth sentence change the phrase "line 5" to read "line 13", and delete the fifth sentence that begins with the word "States". 6. Attachment C--Changes to Reporting Instructions a. In the first paragraph of Section 1., replace the first, second and third sentences with the following new sentences: "Since February 16, 1993, data for the Emergency Unemployment Compensation (EUC) program for reports ETA 207, ETA 218, ETA 227, ETA 5130, ETA 5159 and ETA 2112 should be submitted electronically by utilizing separate EUC entry screens that are available through the UI electronic reporting system. Electronic submittal of EUC data for the ETA 539 will continue following the instructions provided in Section 2.g.." b. Replace all the instructions in Section 2.f., entitled "ETA 2112.", with the following new instructions: "f. ETA 2112. Data will be reported in the aggregate on the electronic regular ETA 2112 report. Amounts received as reimbursement from other States for EUC-CWC payments made prior to July 1, 1992, should be included on either line 24 or 25 in columns C and F. Total disbursements for EUC payments are to be included on line 39 in columns C and F. Because funding sources are different for the original program and each of the two extensions of the program, the disbursements for each must be separately reported. Breakouts of EUC disbursements are to be reported electronically on the separate EUC version of the ETA 2112 as follows: 1. Net disbursements for weeks of unemployment attributable to new and additional initial claims filed on or before July 4, 1992. This amount is to be broken out into four categories: Regular, UCFE, UCX, and Other. 2. Net disbursements for weeks of unemployment attributable to new initial claims filed after July 4, 1992 through March 6, 1993 and additional initial claims filed after July 4, 1992, which are associated with new initial claims filed through March 6, 1993. Report the net total amount only for this category. 3. Net disbursements for weeks of unemployment attributable to new initial claims filed after March 6, 1993 and additional initial claims associated with new initial claims filed after March 6, 1993. Report the net total amount only for this category. NOTE: Residual activity from previous Federal emergency unemployment compensation programs must continue to be reported on line 39 of the regular ETA 2112 report and the amount must be noted in the comments section of the report." 7. Action Required. SESA Administrators shall: a. Provide the above controlling guidance to appropriate staff. b. Issue a public notice in appropriate news media to announce the extension of the EUC program due to enactment of the Emergency Unemployment Compensation Amendments of 1993 (P.L. 103-6), which are applicable to weeks of unemployment beginning after March 6, 1993. c. Perform all other actions needed for proper payment of EUC to eligible individuals, including, but not limited to, notifying individuals who exhaust regular compensation with the week ending March 6, 1993 through the week ending September 25, 1993, of their potential EUC entitlement.

Reference. DINAP Bulletin No. 94-06; Federal Travel Regulations at 41 CFR 301-304; and section 401 program regulations at 20 CFR 632.38(k). Information. The Federal Travel Regulations are revised to increase the maximum lodging allowance in certain existing localities for official travel away from official duty stations by Federal employees and section 401 grantees. Questions. Contact your DINAP Federal Representative.

Action Required: a. Remove canceled directives listed on Attachment A from your active files. While an ESPL may be declared obsolete, the attachment or separate cover material transmitted with it may be retained as long as it is useful. Handbook material transmitted by ESPL should be kept in your active files until the individual pages or the entire handbook is declared obsolete. b. Place the current checklist (Attachment B) at the front of the appropriate binder to serve as a source of reference.

References: The Internal Revenue Code of 1986 (IRC), as amended, including the Federal Unemployment Tax Act (FUTA); Title III of the Social Security Act (SSA); Section 702 of P.L. 103-465; Section 301 of P.L. 102-318; 31 U.S.C. Section 6503 as amended by P.L. 101-453; 31 C.F.R. Part 205; and Unemployment Insurance Program Letters (UIPLs) 25-89, 45-89 and 45-92. Background: On December 8, 1994, the President signed into law P.L. 103-465. Although the short title of this law is the "Uruguay Round Agreements Act," it is commonly known as the legislation on "GATT" - the General Agreement on Tariffs and Trade. Under this legislation, States will be required to deduct and withhold Federal income tax from UC if the individual so elects. In addition, States will have the option of withholding State and local income taxes if the individual so elects. This UIPL addresses these new provisions pertaining to income tax withholding. Discussion: a. In General. The "withdrawal standard" of Section 3304(a)(4), FUTA, and Section 303(a)(5), SSA, limits withdrawals (with specified exceptions not relevant here) from a State's unemployment fund to payments of "compensation." The term "compensation" is defined in Section 3306(h), FUTA, as "cash benefits payable to individuals with respect to their unemploy- ment." Due to its restrictive nature, the withdrawal standard has prohibited States from deducting and withholding any form of income tax from payments of UC. For a detailed discussion of the limitations on the use of unemployment fund moneys, refer to UIPL 25-89 (54 Fed. Reg. 22973 (May 30, 1989)) which transmitted the Secretary's decision in a conformity proceeding involving the deducting and withholding of State UC taxes from UC and UIPL 45-89 (55 Fed. Reg. 1886 (January 19, 1990)) concerning permissible deductions from UC. P.L. 103-465 amends Federal law to provide for "voluntary with- holding" - that is, withholding at the taxpayer's election - of income taxes from a variety of payments made pursuant to Federal law as well as from UC. The joint Senate report describes the reason for this withholding: Some taxpayers find it burdensome to make quarterly estimated tax payments. These taxpayers may find it more convenient to elect to have Federal taxes withheld at the time specified payments are made to them. [S. Rep. No. 412, 103rd Cong. 2d Sess. 137-138 (1994)] b. Discussion of Amendments. Section 702(b) of P.L. 103-465 amended Federal law to require State law to provide for the voluntary withholding of Federal income tax from UC. Specifical- ly, new paragraph (18) of Section 3304(a), FUTA, was added to require, as a condition for employers in a State to receive credit against the Federal unemployment tax, that: Federal individual income tax from unemployment com- pensation is to be deducted and withheld if an indi- vidual receiving such compensation voluntary requests such deduction and withholding. Section 702(c) of P.L. 103-465 also amended the withdrawal standard of FUTA and SSA (and the definition of "unemployment fund" in Section 3306(f), FUTA) to permit "the withholding of Federal, State, or local individual income tax." As amended, the withdrawal standard in Section 3304(a)(4)(C), FUTA, now reads: nothing in this paragraph shall be construed to pro- hibit deducting an amount from unemployment compensa- tion otherwise payable to an individual and using the amount so deducted to pay for health insurance, or the withholding of Federal, State, or local individual income tax, if the individual elected to have such deduction made and such deduction was made under a program approved by the Secretary of Labor . . . . Section 303(a)(5), SSA, also reads similarly. These amendments to the withdrawal standard and the definition of "unemployment fund" have an effect on the new voluntary withholding requirement of Section 3304(a)(18), FUTA. Under the withdrawal standard amendments, any deducting and withholding from UC may be made only if "such deduction was made under a program approved by the Secretary of Labor." The requirements necessary for approval of a program are contained in item 4.e of this UIPL. c. Withholding of Federal Income Tax. New IRC Section 3402(p)(2), which was added by Section 702(a) of P.L. 103-465, concerns voluntary withholding of UC and affects the FUTA and SSA provisions concerning deducting and withholding income tax. This section applies to payments of UC "as defined in section 85(b)," IRC. Section 85(b) defines UC as "any amount received under a law of the United States or of a State which is in the nature of unemployment compensation." The effect of this definition is that, if the payment of UC is taxable under the IRC, then the State must provide for voluntary withholding of Federal tax from that amount. Section 3402(p)(2), IRC, also provides that the amount of Federal income tax withheld from UC "under this chapter [Chapter 24 of the IRC, Collection of Income Tax at Source on Wages] . . . shall be an amount equal to 15 percent of such payment." As a result, the amount of Federal income tax to be withheld from UC by the States must be equal to 15 percent of the UC payment. Since Section 3402(p)(2), IRC, is administered by the Federal Internal Revenue Service (IRS), the IRS has the authority to interpret these provisions. d. Withholding of State and Local Income Taxes. States will decide whether to allow State and/or local income taxes to be deducted and withheld from UC at an individual's election. A State may decide to deduct and withhold only State income taxes, only local income taxes, both, or neither. It is left to the State to decide whether the percentage of the payment to be deducted and withheld shall be a uniform amount established by the State law or determined by the individual. The mechanisms for transferring amounts deducted and withheld from the unemploy-ment fund to the State or locality will also be established by the State, subject to the requirements of items e.(2) and e.(3) below. Although a State has the authority to deduct and withhold State and local income taxes from UC for other States and for locali-ties outside the State, Federal law does not require a State to do so. A State may, therefore, restrict the taxes to be deducted and withheld to taxes subject to its laws or to individuals who plan to file a tax return against that State. e. Approved Program. As noted in item 4.b, the amendments to the withdrawal standard concerning the withholding of income tax require that any deduction must be made under a program approved by the Secretary. Rather than requiring each State to submit a plan describing its program, the Department has deter-mined that States using the draft legislative language contained in Attachment II to this UIPL may consider their withholding programs to be automatically approved. (States are free to delete optional language, such as that pertaining to State and local taxes and to make nonsubstantive modifications, including taking into account State usage and formatting.) States not using the draft language will need to submit a plan describing its program to the appropriate regional office. The following necessary elements of the program are discussed within the context of the draft language: (1) Notification. Section 301 of P.L. 102-318, the Unemployment Compensation Amendments of 1992, already requires State agencies to provide to each individual filing a claim a written explanation of Federal and State income taxation of UC and the requirements pertaining to estimated tax payments. See UIPL 45-92 (57 Fed. Reg. 47871, 47875-47876 (October 20, 1992)). To assure that the individual has the opportunity to have amounts withheld from all payments, the individual is to be advised in writing at the time of filing the initial claim that UC is subject to Federal income tax as well as (if applicable) State and local income taxes; that requirements exist pertaining to estimated tax payments; and that income tax may be withheld at the individual's option. States will need to revise their initial claims processes to obtain information concerning whether the individual elects or declines to have income tax withheld. Section (1) of the draft language addresses notification and other matters. It permits the deduction and withholding of Federal, State and local income taxes. The general reference in Section (1)(C) to the IRC assures that State law will always correspond to whatever percentage Federal law authorizes for deductions. Since the States are not required to deduct and withhold State and local income taxes from UC, the draft language pertaining to such withholding is at the State's option. The language permits specified percentages of State and local income taxes to be withheld under State law since this method will likely be the easiest to administer. The State may, however, modify the draft language to allow the individual the option of electing the percentage or dollar amount to be deducted and withheld. As discussed in item 4.d. above, the State may also add language restricting the State and local withholding option. The final issue addressed in Section (1) is the individual's option to change withholding status. The individual's anticipat-ed tax liabilities may change due to, for example, a change in the tax year or due to work performed during the benefit year, or the individual may determine that amounts being withheld are needed to meet current living expenses. Therefore, individuals must also be notified of and provided an opportunity to change their withholding status. Although the Department encourages States to allow the individual to change his or her withholding status several times, it will only require the States to permit this change at least once during each benefit year. States are not required to amend their continued claims forms or processes to accommodate this change in withholding. Instead, it will be sufficient for the agency to notify the individual at the time of filing the initial claim that withholding status may be changed at the individual's request. Section (1)(G) of the draft language permits an unlimited number of changes by the claimant. The State may, however, modify the language to restrict the number of changes to any number greater than or equal to one. (2) Amounts to Remain in Unemployment Fund until Transferred to Taxing Authority. Amounts deducted and withheld from unemployment compensation must remain in the State's unem- ployment fund until transferred to the Federal, State or local taxing authority as a payment of income tax. Such amounts will remain in the State's account in the Unemployment Trust Fund (UTF) until such time as they are drawn down to the State's benefit payment account in accordance with the State's agreement implementing 31 U.S.C. 6503, as amended by the Cash Management Improvement Act of 1990, P.L. 101-453, and the implementing regulations at 31 C.F.R. Part 205. The Department is currently exploring an alternative to the draw down approach with the U.S. Department of the Treasury. Under this alternative, amounts deducted and withheld would be trans-ferred directly from the State's account in the UTF to the IRS. (3) Federal Procedures. The State must follow all procedures specified by this Department and the IRS related to withholding. The inclusion of the provision in Section (3) of the draft language assures the Department that States will comply with any IRS procedures concerning the deducting and withholding of Federal income tax. It also gives States the authority to follow any procedures concerning deducting and withholding income tax which the Department or IRS may at some future date deem neces- sary. States may change the reference to "commissioner" to reference the title of the appropriate State official or agency. (4) Priorities. Since UC overpayments, child support obligations and food stamp overissuances may also be deducted and withheld from UC, States will need to address the priority of withholding when the claimant also elects to have income tax withheld. The Department has previously left to the States the matter of determining priorities when there are two or more deductions made from UC. The Department is currently discussing with the IRS whether the provisions of the IRC which it adminis- ters have any bearing on this issue. Since the issue of priority of withholding has not yet been re- solved, Section (4) of the draft language provides that the priority for deductions from UC shall be determined in accordance with State regulations. This will permit the States to accommo- date any Federal position on this matter. Funding: Costs incurred in withholding Federal, State or local income taxes from UC may be funded from UC administrative grants provid-ed under Section 302, SSA. Effective Date: Under subsection (d) of Section 702 of P.L. 103-465, the provi- sions of that section relating to voluntary withholding "shall apply to payments made after December 31, 1996." This means that, as of January 1, 1997, States must have provisions of law in effect providing for the voluntary withholding of Federal income tax and must be permitting the withholding Federal income tax in accordance with this UIPL. States should note that the effective date refers to "payments." Therefore, as of January 1, 1997, amounts are to be deducted and withheld from payments of UC for Federal income tax, if the individual so elects, even if the payment is for a week of unemployment beginning before January 1, 1997. States may not implement the withholding of Federal, State or local income taxes prior to January 1, 1997, since the withdrawal standard's limitations remain in effect until that date. We recommend, however, that States advise individuals filing new claims in the fourth calendar quarter of 1996 that voluntary holding will become available and that the State would, if the claimant so elected, begin deducting and withholding of income taxes as for payments made on and after January 1, 1997. Action Required: States must take appropriate action to assure legislation autho- rizing the voluntary withholding of Federal income tax is enacted by and implemented on January 1, 1997. As noted above in item 4.e., States not enacting legislation using the draft language attached to this UIPL will need to submit a plan to the appropri- ate Regional Office. To provide adequate time for review and comment, these plans are due on September 30, 1996.

References: (a) JTPA Amendments of 1992, and (b) Training and Employment Information Notice (TEIN) No. 12-92, October 21, 1992. Background: In October 1992, ETA issued a three-volume Technical Assistance Guide (TAG) that SDAs could chose to use for monitoring of their service providers. The three volumes are: -- Volume I - Contains general instructions applicable for all monitoring modules. -- Volume II - Comprised of eleven modules, which are data collection instruments. -- Volume III - Provides instructions for on-site monitoring, interpretation of findings, and report preparation. In TEIN No. 12-92, which transmitted the TAG to the States, we indicated that the modules were flexible and were meant to be modified by SDAs to fit particular circumstances and to be responsive to changing policies. Diskettes in Wordperfect 5.1 containing the entire TAG were provided with each hard copy TAG to facilitate modification as necessary. In view of the recently enacted JTPA Amendments of 1992 that become effective on July 1, 1993, ETA has made some revisions to reflect the new law. Revisions: Attached are copies of the pages of the TAG that have been revised. Using the applicable diskettes users are encouraged to make the corrections indicated on the pages. The following instructions will guide the user through the revisions process: Revision Instructions JTPA Monitoring TAG 1. All changes are printed inside brackets "[]" and are inbold. 2. Delete all text or graphics that are in strikeout format. 3. Text to be inserted is found within brackets, and follows "insert:." 4. If deletions and insertions are made as instructed, page formats will be maintained, except where noted: Do not change the page numbers in Volume III since Volume II references page numbers in Volume III. Two types of format changes are required as a result of the revisions: A. Insertion of a hard page and the addition of a new page (e.g., page 8a, 11a, or 22a). B. Deletion of a line of text or graphics to maintain current page format. 5. You may wish to document the year the revisions were made. This is done on the pages illustrating changes by the page number (e.g., Page 2 (1993). 6. Refer to the file and page number on the DOL TAG diskettes and make the changes as instructed. The following pages require revisions: Volume I: 1. Introduction Page 1, Page 2 2. Chapter 1 Page 1-3, 1-15, 1-16 3. Chapter 2 Page 2-2, 2-5, 2-6, 2-8, 2-9 4. Chapter 3 Page 3-2, 3-3 Volume II: Monitoring Instruments 5. Monitoring Instrument 1 Page 1, 10, 28 6. Monitoring Instrument 2 Page 1, 10, 11, 28 7. Monitoring Instrument 3 Page 1, 3, 7, 8, Add page 8a, 10, 11, 11a, 21 8. Monitoring Instrument 4 Page 1, 2, 17 9. Monitoring Instrument 5 Page 1, 2, 8, 9, 10, 11, 15, 28 10. Monitoring Instrument 7 Page 1 11. Monitoring Instrument 8 Page 1, 2 12. Monitoring Instrument 9 Page 1, 2, 3, 8, 11, 12, 13, 18, 19, 21, 22 Add page 22a 13. Monitoring Instrument 10 Page 1, 2 Add page 2a 14. Monitoring Instrument 11 Page 1, 11, 22 Note: There are no revisions to Volume III: Module Instructions. Action: State liaisons are requested to distribute these revision instructions to SDAs for appropriate action.