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; the Federal-State Extended Unemployment Compensation Act of 1970 (FSEUCA) as amended; 20 CFR Part 615; GAL 12-92 and GAL 12-92, Changes 1 and 2; the Trade Act of 1974 (19 U.S.C. 2271 et seq.); 20 CFR Part 617. Background: GAL 4-92, dated November 27, 1991, and published on February 14, 1992 (57 FR 5472), transmitted the Department's operating instructions to the States for administration of the Emergency Unemployment Compensation (EUC) program. On June 4, 1992, the Department issued GAL 4-92, Change 3, which transmitted revised operating instructions for Section III.M., Fraud and Overpayment, in Attachment A, based on questions from States. This document was published on June 24, 1992 (57 FR 28188). After additional substantive changes to the operating instructions in GAL 4-92, based on amendments to the EUC Act of 1991 and other provisions of P.L. 102-318 (enacted July 3, 1992), the Department consolidated GAL 4-92 and the four changes into one document, GAL 12-92. This document, issued on September 11, 1992, became the official controlling guidance and was published on November 16, 1992 (52 FR 54106). Based on changes to the reporting requirements provided in Attachment C to GAL 12-92 and extension of the EUC program provided in P.L. 103-6, the Department issued Changes 1 and 2 to GAL 12-92 on February 16, 1993, and March 10, 1993, respectively. Now, additional questions have arisen from the States, as well as other interested parties, concerning the application of the offset of overpayment provisions in Section III.M.. After consideration of the comments and the provisions of the EUC Act of 1991 as a whole, the Department is revising Section III.M.2.b.(5) of Attachment A to GAL 12-92 for the reasons described below. Clarification and Revision--Explanation: Section 105(c)(1) of the EUC Act of 1991 (entitled Fraud and Overpayments) provides that in the event of an EUC overpayment, deductions from EUC and other unemployment compensation payable may be utilized to offset the overpayment; except that no single deduction may exceed 50 percent of the weekly benefit amount from which the deduction is made. Section 243(a)(2) of the Trade Act of 1974 contains nearly identical language and the Department's regulation at 20 CFR 617.55(a)(4)(C)(iii) was promulgated to implement the provision. Therefore, the Department did not vary from the provision in 20 CFR Part 617 when Section III.M.2.b.(5) was issued in GAL 4-92 and now GAL 12-92, since a precedent had been established in the Trade Act regulations. However, unlike the Trade Act of 1974, Section 101(d)(2) of the EUC Act of 1991 provides that the terms and conditions of State law that apply to claims for extended compensation and the payment thereof, shall apply to claims for EUC and the payment thereof, except where inconsistent with the provisions of the EUC Act or with regulations or operating instructions of the Secretary promulgated to carry out the EUC Act. Based on questions from the States and other interested parties, the Department has determined that part of the requirement provided in current Section III.M.2.b.(5), prescribing that any deduction must be 50 percent is too restrictive, since some States have a smaller deduction for regular compensation, which is applicable to EB, and, hence, is also applicable to EUC. Any State law requiring greater than a 50 percent reduction is inconsistent with Section 105(c)(1) and may not be applied to EUC overpayments under Section III.M.2.b.(5). Therefore, Section III.M.2.b.(5) is revised as described below. This interpretation is applicable to all outstanding EUC overpayments and to all offset determinations made after the date of this issuance. The revised operating instructions in this GAL 12-92, Change 3, are issued to the States and constitute the controlling guidance provided by the Department in its role as the principal in the EUC program. As agents of the United States, the States may not vary from the operating instructions in GAL 12-92, GAL 12-92, Change 1, GAL 12-92, Change 2, or this Change 3 (or any subsequent or supplemental operating instructions) without the prior approval of the Department of Labor. Amendment to Operating Instructions: Consistent with Section 105(c)(1) of the EUC Act of 1991, Section III.M.2.b.(5) of Attachment A of GAL 12-92 is changed to read as follows: "(5) No single deduction under this section III.M.2., shall exceed 50 percent of the amount otherwise payable to the individual." Action Required: SESA administrators should ensure that the above controlling guidance is issued to appropriate staff and, if State law so provides for a deduction of less than 50 percent, that such lesser reduction shall apply to all outstanding EUC overpayments and to all offset determinations made after the date of this issuance.

Information. As a part of DINAP's continuing effort to provide customer service, we are pleased to announce that all Section 401 grantee reports and plans are to be submitted to a new MIS Desk. This newly established MIS operation within DINAP will provide a central entry point for all reports and plans submitted by grantees to the Department. It will also provide DINAP immediate access to program data updated daily. Ms. Andrea T.B. Brown, DINAP Assistant Manpower Development Specialist has been assigned responsibility for all MIS desk duties: receiving, tracking and logging reports, as well as creating a database by individual program and on an aggregate basis. Ms. Brown is also responsible for contacting grantees regarding missing and incorrect reports. Action. All Section 401 grantees MUST submit all required reports and plans to the following address effective immediately: U.S. Department of Labor Employment and Training Administration Division of Indian and Native American Programs 200 Constitution Avenue, N.W. Room N-4641 Washington, D.C. 20210 ATTENTION: MIS Desk Inquiries. Questions should be addressed to Ms. Andrea T.B. Brown, Assistant Manpower Development Specialist.

Background: Section 106 of JTPA directs the Secretary to establish performance standards for adult, youth, and dislocated worker programs. These standards are normally updated every two years based on the most recent JTPA program experience and on program emphases and goals established by the Department. The Secretary also issues instructions for implementing standards and parameter criteria for States to follow in making adjustments to the Title II-A performance standards. Program policies and relevant standards have remained unchanged since Program Year 1990. The Department did not update its performance standards levels in Program Year 1992 in order to maintain program management continuity amidst uncertainty about the passage of the ma Amendments and economic conditions. Program Year 1991 data indicate that outcomes have continued to decline since 1988 -- the reference year for the current standards. In addition, the Department's adjustment model cannot adequately account for decreased opportunities caused by slow economic growth. JTPA Program Performance in 1991: A review of 1991 data shows a trend of declining SDA performance on the employment-related standards (i.e., the adult and welfare follow-up employment rates and the youth entered employment rate). Thus, despite the Department's intent in setting the standards at levels that 75% of SDAs can be expected to meet or exceed, only about 65% of SDAs met or exceeded their employment-related standards in 1991. There is little reason to believe that outcomes have declined because the quality of SDA services decreased. Rather, because of the program's sensitivity to the economic environment, the most likely explanation for the employment rates is the decline in job opportunities associated with slow economic growth. Although economic conditions are improving, they have not yet been accompanied by increased employment -- and continued slow employment growth is forecast for the near future. It is likely to be some time before job opportunities improve for JTPA participants, and lower program outcomes for the employment-related standards can therefore be expected to continue in Program Years 1992-1993. Effects of Current Standards on State Incentives and Sanction Determinations: Maintaining employment standards at current levels would unfairly penalize SDAs for the effects of economic conditions and discourage enrollment of more difficult-to-serve populations. This would be unproductive and contrary to DOL's intent in setting performance standards; that is, holding SDAs harmless for factors outside their control. Secretary's Revised National Numerical Standards for Program Years 1992-1993: To ease the implementation of the Amendments and to further the Department's goal of increased service to hard-to-serve populations, the Department has decided to update the national standards to levels that 75% of SDAs can be expected to exceed -- the Department's traditional benchmark. This will result in slightly lower employment-related standards and a slightly higher standard for the youth employability enhancement rate -- reflecting performance improvements that have come with an increased program focus on skill-enhancing efforts for youth. The Title II-A earnings measures will remain at current levels. The revised Title II-A standards are: -- Adult Follow-Up Employment Rate 60% -- Welfare Follow-Up Employment Rate 46% -- Youth Entered Employment Rate 41% -- Youth Employability Enhancement Rate 36% The following standards remain unchanged: Title II-A: -- Adult Weekly Earnings at Follow-Up $228 -- Welfare Weekly Earning at Follow-Up $207 Title III: -- Title III Entered Employments Rate 64% Implementing Provisions: Implementation provisions remain unchanged. Please refer to section 6, TEGL No. 9-89, dated June 29, 1990 for these provisions. Performance Standards Provisions for Title III: Provisions for Title III remain unchanged as no drop in program performance has been noted. Please refer to section 7, TEGL No. 9-89, dated June 29, 1990 for these provisions. State Action: States are to distribute this Guidance Letter to all relevant officials within the State responsible for implementing performance management policies and requirements for Program Years 1992-1993. A copy of this Guidance Letter is also being sent to State JTPA Liaisons, the State Wagner-Peyser Administering Agencies and the State Worker Adjustment Liaisons.

References: Section 223(f) of the Trade Act of l974 (l9 U.S.C. 2293(f)) and 20 CFR 617.15(d). Background: Under the TAA and NAFTA-TAA programs, weekly trade readjustment allowances (TRA) may be available to adversely affected workers while they are participating in an approved training program. Section 233(f) of the Trade Act of l974 specifies that, when a worker is participating in an approved training program before the break, the worker is treated as being in training during a regularly scheduled break in training that does not exceed l4 days. This provision is implemented by 20 CFR 617.15(d), which provides that a scheduled break in the training program of l4 days or less will not disqualify a trainee for TRA during the break. However, if the scheduled break exceeds l4 days, as calculated in accordance with 20 CFR 617.15(d)(4), the individual will not receive TRA during such break. Since semester breaks of more than l4 days are quite common, this l4-day limitation creates hardship for many TAA and NAFTA-TAA participants. While some States and training providers have attempted to accommodate this limitation by scheduling activities for affected workers that prevent a break in excess of 14 days, such efforts are not always feasible. Therefore, significant inequities result because the availability of income support may depend on the particular State and training institution where the individual participates. A Departmental review of the impact of Section 233(f) of the Trade Act, stimulated by complaints from TAA and NAFTA-TAA participants and their representatives, disclosed wide variations among the States in terms of the financial hardship imposed on dislocated workers as a result of the break in training provision. In some States, no TAA or NAFTA-TAA participants are affected while, in others, 80 percent or more of the trade- impacted dislocated workers are denied benefits during regularly scheduled semester breaks. Because of the financial hardship imposed by this provision and its inequitable impact among States, Senator Kerry (for himself and Senator Kennedy) and Congressman Olver have introduced bills (S. 556 and H. R. 1231, respectively) that would amend the Trade Act of 1974 to expand the allowable break from 14 days (as calculated under the interpretation set forth in 20 CFR 617.15(d)) to 45-calendar days. As an interim solution until such time as an amendment is enacted and the regulations are revised, the Department has developed new operating instructions to minimize both the number of individuals adversely affected and the degree of adverse impact on each of those individuals. Operating Instructions: These operating instructions are to be implemented pending enactment of an amendment to Section 233(f) of the Trade Act. It is the intent of the Department in issuing these revised operating instructions that States take active and aggressive steps to prevent TAA and NAFTA-TAA participants who are in training before the break and who continue training after the break from experiencing a semester break in training that exceeds 14 days (excluding Saturdays, Sundays, or official State or National holidays). This GAL is not intended to apply to summer breaks and other breaks between semesters that have normally been more than 45 days. Following are guidelines and suggested actions for ensuring that individuals are not disallowed benefits due to breaks of more than 14 days. (A) The State agencies should negotiate with training vendors that have regularly scheduled breaks of more than 14 days (as calculated under 20 CFR 617.15(d)) to resume classes earlier for TAA and NAFTA-TAA participants. If the training vendors are unable to comply, alternative vendors should be given preference in placing TAA and NAFTA-TAA participants. (B) If placement must be made at a vendor with a break longer than 14 days, the State agency is to encourage the vendor to arrange that special components of the training be developed and convened during the break. These special components must be integral to the attainment of the objectives of the overall training plan, and must be made part of that plan at the onset, and not simply to circumvent Section 233(f). Excluding summer breaks, in those instances when a break in training will exceed 14 days, the State agency must, prior to the break: (1) Advise the trainee in writing of the break in training provision and have the trainee sign an acknowledgement indicating an understanding and acceptance of the implications of the provision; and (2) Document its attempts to provide the participant with information and opportunities for acceptable training options that do not entail a break in training of more than 14 days. NOTE: Failure of the State agency to satisfy the above two conditions does not mean that the trainee is entitled to TRA during the break. There is no authority to waive the 14-day limitation of Section 233(f). Action Required: States are to implement the Operating Instructions of this GAL effective on the date of issuance. States are to inform all appropriate staff of the contents of this document.

Background: On November 12, 1992, SPIR instructions and definitions were published in the Federal Register. Since that time the Department has received numerous telephone and written inquiries from the employment and training system regarding a host of issues. Many questions were also raised at recent training sessions on the Job Training Partnership Act (JTPA) Amendments. In order to insure accuracy and consistency in response to such inquiries, responses have been developed to the most frequently asked questions. These represent clarifications of established policy and are contained in the attachment to this issuance.

Background: The Secretary of Commerce is working with the Secretaries of Defense, Labor, Energy and other members of the President's National Economic Council, to meet the needs of those affected by military base closings and defense contract reductions. Within DOC, EDA is the primary agency responding to defense adjustment impacts on communities. The primary interest of EDA is to reach community officials and citizens interested in the community economic adjustment programs that they offer. Action Required: Please distribute the attached information to appropriate officials within the State.

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Reference. DINAP BULLETIN NO. 94-18 Background. On February 10, 1995, DINAP sent instructions for completing the Program Year 1995 Comprehensive Annual Plans and Calendar Year 1995 Summer Youth Plans to all grantees. In response to grantees requesting more time to develop their plans, DINAP issued the planning instructions earlier than in years past. The established due dates were set at April 7 for Summer Plans and April 21 for Comprehensive Annual Plans. Almost all grantees submitted their plans by the due dates or shortly thereafter; however, a few Summer Plans have yet to be received as well as several Comprehensive Annual Plans. Action. Grantees that have not submitted either or both of their plans must do so immediately. Plans submitted late will cause a delay in the review and funding process. More importantly, GRANTEES FAILING TO SUBMIT SUMMER PLANS and COMPREHENSIVE ANNUAL PLANS BY JUNE 30, 1995, WILL NOT RECEIVE FUNDING FOR THE CALENDAR YEAR 1995 SUMMER PROGRAM OR THE PROGRAM YEAR 1995 REGULAR PROGRAM. Furthermore, grantees operating Title II-B summer programs or Title IV-A programs without Department-approved plans will not be reimbursed for any associated costs. If for any reason a grantee feels they will be unable to meet the June 30 deadline, they are advised to contact the Chief of DINAP immediately.

Reference: None. Background: RQC is a comprehensive measurement system designed to assist State and Federal Administrators in assessing and improving their Unemployment Insurance (UI) tax operations. The design has been crafted through a cooperative effort between the Department of Labor's National Office staff, Regional Office staff, SESA staff working with the National Office on temporary Intergovernmental Personnel Act (IPA) assignments, and SESA staff serving in advisory capacities (expert panel). To date, staff from eleven different SESAs have served on IPA assignments. With the approaching expiration of the terms for the current IPAs, several openings will become available. Current Status of RQC: RQC encompasses all major dimensions of quality: accuracy, timeliness, and completeness. The system has been divided into three "modules": a. Core RQC. Voluntary implementation of this module is scheduled in 49 States in 1993. Core RQC assesses SESA tax operations through computed measures obtained by required reporting of data, Program Reviews, and Surveys. Computed Measures are similar to the tax indicators from ETA 581 Reports currently used with Desired Levels of Achievement (DLAs). The Program Review is further divided into Systems Reviews and Acceptance Samples. Systems Reviews examine tax processes for the existence of internal controls. Acceptance Samples examine small numbers of transactions to verify the effectiveness of the internal controls. Surveys gather information on methods and procedures for the purpose of identifying successful operations and sharing information amongst the SESAs. b. Benefit Charging Accuracy. This module involves two steps: (1) assessing the accuracy of the decisions to charge or non- charge base period employers, and (2) assessing the accuracy of the allocations of benefit charges to employers and/or general pool accounts. Pilot testing has been completed in six SESAs, and the results are being reported to all SESAs with a request for their comments. c. Employer Compliance. This module, which is in the developmental stage, is an attempt to produce a single measure for the dollar impact of employers' tax compliance (or noncompliance) through two components: compliance with tax reporting and compliance with paying contributions due. SESA volunteers are being solicited for a fiscal year 1994 pilot test. State Nomination of Staff to Provide Technical Support in the Development of RQC: The contractual assignments for our present team of IPAs are drawing to a close; therefore, the services of new SESA tax staff will be needed. The RQC Workgroup is seeking individuals with knowledge and experience in SESA tax operations, with knowledge of automation in tax operations, and with good writing and analytical skills who can apply this expertise on a broad scope. SESA tax staff are being recruited to work in Washington, DC on 1 to l l/2 year assignments, beginning approximately August 1, 1993. These staff will participate with the RQC Workgroup in assignments from among the following: -- Implementation of Core RQC in the SESAs, -- Development of the Modules for Employer Compliance and Benefit Charging, and -- Development of ADP interfaces. A person serving on an IPA assignment with RQC remains a State employee, continuing to draw normal salary and benefits. Direction and control are provided by Federal staff. Salary and relocation/per diem expenses may be paid by the SESA, the Department of Labor, or shared, depending on arrangements negotiated between the SESA and the Department. IPAs are entitled to either (1) the reasonable cost of relocation to and from Washington, DC; or (2) the reasonable cost of living expenses (per diem) while working in Washington, DC. Action Required: SESA Administrators are requested to notify appropriate staff of opportunities for IPA assignments and to forward resumes/applications of interested applicants to the Regional Office within 30 days of this UIPL. The resume/application should show work history (including duties), name and phone number of the applicant's supervisor, and the applicant's phone number.

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