Allocating Grants to States for Reemployment Services and Eligibility Assessments (RESEA) in Accordance With Title III, Section 306 of the Social Security Act (SSA), 39018-39020 [2019-16988]

Download as PDF 39018 Federal Register / Vol. 84, No. 153 / Thursday, August 8, 2019 / Notices any pending application of Anthony Schapera, M.D. to renew or modify this registration, as well as any pending application of Anthony Schapera, M.D. for registration in California. This Order is effective September 9, 2019. Dated: July 28, 2019. Uttam Dhillon, Acting Administrator. This completes the process to renew the Charter for an additional 2-year period. Gregory Joy, Policy Advisor/Designated Federal Officer, Bureau of Justice Assistance. [FR Doc. 2019–16987 Filed 8–7–19; 8:45 am] BILLING CODE 4410–18–P [FR Doc. 2019–17003 Filed 8–7–19; 8:45 am] DEPARTMENT OF LABOR BILLING CODE 4410–09–P Employment and Training Administration DEPARTMENT OF JUSTICE Office of Justice Programs [OJP (BJA) Docket No. 1763] Notice of Renewal of the Charter for the Public Safety Officer Medal of Valor Review Board Office of Justice Programs (OJP), Bureau of Justice Assistance (BJA), Justice. ACTION: Renewal of the Charter. AGENCY: jbell on DSK3GLQ082PROD with NOTICES VerDate Sep<11>2014 16:51 Aug 07, 2019 Jkt 247001 Office of Unemployment Insurance (OUI), Employment and Training Administration (ETA), Department of Labor (DOL). ACTION: Notice. AGENCY: The Bipartisan Budget Act of 2018 (BBA), Public Law 115–123 (2018), established permanent authorization for the RESEA program by enacting section 306 of title III, (SSA). This notice announces the formula to allocate base funds for the RESEA program, as provided under Section 306(f)(1), SSA, 42 U.S.C. 506(f)(1). On April 4, 2019, ETA published a notice in the Federal Register (84 FR 13319) requesting public comment concerning the development of a proposed formula that ETA will use to distribute funding to States for RESEA. The notice presented a description of a proposed allocation formula and public comments were requested. The comment period closed on May 6, 2019. This notice summarizes and responds to the comments received and publishes the final allocation formula that will take effect in Fiscal Year (FY) 2021. DATES: The RESEA allocation formula described in this notice will take effect in FY 2021. ADDRESSES: Questions about this notice may be submitted to the U.S. Department of Labor, Employment and Training Administration, Office of Unemployment Insurance, 200 Constitution Avenue NW, Room S– 4524, Washington, DC 20210, Attention: Lawrence Burns, or by email at DOLETA-UI-FRN@dol.gov. FOR FURTHER INFORMATION CONTACT: Lawrence Burns, Division of Unemployment Insurance Operations, at 202–693–3141 (this is not a toll-free number), TTY 1–877–889–5627, or by email at Burns.Lawrence@dol.gov. SUPPLEMENTARY INFORMATION: SUMMARY: The Bureau of Justice Assistance provides notice that the charter of the Public Safety Officer Medal of Valor Review Board has been renewed. FOR FURTHER INFORMATION CONTACT: Visit the website for the Public Safety Officer Medal of Valor Review Board at https:// www.bja.gov/programs/medalofvalor/ index.html or contact Gregory Joy, Policy Advisor, Bureau of Justice Assistance, Office of Justice Programs, 810 7th Street NW, Washington, DC 20531, by telephone at (202) 514–1369, toll free (866) 859–2687, or by email at Gregory.joy@usdoj.gov. SUPPLEMENTARY INFORMATION: The Bureau of Justice Assistance provides notice that the charter of the Public Safety Officer Medal of Valor Review Board has been renewed. The Charter for the Public Safety Officer Medal of Valor Review Board was submitted to the U.S. Attorney General, who subsequent approved its renewal on April 24, 2019. Following this approval, separate correspondence were mailed June 5, 2019, to: The Honorable Lindsey Graham, Chairman, Committee on the Judiciary, United States Senate; The Honorable Dianne Feinstein, Ranking Member, Committee on the Judiciary, United States Senate; The Honorable Jerrold Nadler, Chairman, Committee on the Judiciary, U.S. House of Representatives; The Honorable Doug Collins, Ranking Member, Committee on the Judiciary, U.S. House of Representatives; and Ms. Sara Striner, Chair, Federal Advisory Committee Desk, Library of Congress. SUMMARY: Allocating Grants to States for Reemployment Services and Eligibility Assessments (RESEA) in Accordance With Title III, Section 306 of the Social Security Act (SSA) PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 I. Introduction Since 2005, DOL and participating State workforce agencies have been addressing individual reemployment needs of Unemployment Insurance (UI) claimants and working to prevent and detect UI improper payments through the voluntary UI Reemployment and Eligibility Assessment (REA) program and, beginning in FY 2015, through the voluntary RESEA program. On February 9, 2018, the President signed the BBA, which included amendments to the SSA creating a permanent authorization for the RESEA program. The RESEA provisions are contained in section 30206 of the BBA, enacting new section 306 of the SSA. 42 U.S.C. 506. Section 306, SSA also contains provisions for funding the RESEA program. The primary goals of the RESEA program are to: Improve employment outcomes for individuals that receive unemployment compensation (UC) by reducing average duration of receipt of UC through employment; strengthen program integrity and reduce improper payments; promote alignment with the broader vision of the Workforce Innovation and Opportunity Act through increased program integration and service delivery for job seekers; and establish RESEA as an entry point to other workforce system partner programs for individuals receiving UC. Core services that must be provided to RESEA participants are: • UI eligibility assessment, including review of work search activities, and referral to adjudication, as appropriate, if an issue or potential issue is identified; • Labor market and career information that address the claimant’s specific needs; • Enrollment in Wagner-Peyser Act funded Employment Services; • Support to the claimant to develop and implement an individual reemployment plan; and • Information regarding, and access to, American Job Center services and providing referrals to reemployment services and training, as appropriate, to support the claimant’s return to work. II. Background Section 306, SSA, specifies three uses for amounts appropriated for the RESEA program and designates the proportion of annual appropriations to be assigned to these uses: (1) Base funding (84 percent to 89 percent of the appropriation depending on the year) for States to operate the RESEA program, (2) outcome payments (10 percent to 15 percent of the E:\FR\FM\08AUN1.SGM 08AUN1 Federal Register / Vol. 84, No. 153 / Thursday, August 8, 2019 / Notices appropriation depending on the year) designed to reward States meeting or exceeding certain criteria, and (3) up to one percent for the Secretary of Labor to use for research and technical assistance to States. 42 U.S.C. 506(f). With respect to the base funding, section 306(f)(1)(A), SSA, states: IN GENERAL.— For each fiscal year after fiscal year 2020, the Secretary shall allocate a percentage equal to the base funding percentage 1 for such fiscal year of the funds made available for grants under this section among the States awarded such a grant for such fiscal year using a formula prescribed by the Secretary based on the rate of insured unemployment (as defined in section 203(e)(1) of the federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note)) in the State for a period to be determined by the Secretary. In developing such formula with respect to a State, the Secretary shall consider the importance of avoiding sharp reductions in grant funding to a State over time. 42 U.S.C § 506(f)(1)(A). III. Response to Public Comment ETA received a total of 19 comments from 14 commenters concerning the RESEA base allocation formula. These comments include: 6 comments regarding the general formula, 3 comments concerning carry-over provisions, 4 comments concerning the proposed hold-harmless provision, 3 comments concerning the establishment of minimum funding levels, and 3 comments concerning administrative and other program cost limits. The following is a summary of these comments and ETA’s responses. jbell on DSK3GLQ082PROD with NOTICES A. General Formula Comments Several commenters addressed formula design directly, including general concern expressed by multiple states that provisions must be made to ensure adequate funding levels for small and rural states. Members of the Committee on Ways and Means, U.S. House of Representatives, expressed concern that the proposed formula used elements that eliminated the Insured Unemployment Rate (IUR) rather than relied on the IUR as required in section 306(f), SSA. 42 U.S.C § 506(f)(1)(A). Two States suggested considering additional factors, such as costs per RESEA and program and performance data. One State recommended the use of statistically-adjusted unemployment data over a 10-year period, with an emphasis on more recent data, in place 1 The term ‘‘base funding percentage’’ as used here is a percentage of the funds appropriated for RESEA grants to operate the program in a fiscal year. Section 306(f)(1)(B), SSA, defines the base funding percentage for fiscal years 2021 through 2026 as 89 percent and for fiscal years after 2026 as 84 percent. VerDate Sep<11>2014 16:51 Aug 07, 2019 Jkt 247001 of the IUR as a means of providing more stable funding levels. One State expressed support for the proposed formula allocation methodology, but recommended revisiting the formula if future legislation expanded program eligibility to additional populations. One State recommended ETA reserve a portion of RESEA funds to respond to sudden economic changes or other unforeseen circumstances that would require a one-time influx of additional funding. In response to these comments, as discussed more fully below, ETA has developed a revised allocation formula that uses two primary input variables: the IUR and the civilian labor force (CLF). These two factors are included in the formula because section 306, SSA, requires the formula to be based on the IUR and the CLF addresses the differences in state size. 42 U.S.C. 506(f)(1). It also includes additional provisions, discussed below, that are intended to prevent significant State funding fluctuations over time and to provide minimum funding for smaller or rural States. The use of additional data factors, such as cost per RESEA, were considered, but not included because of the increased burden of collecting and maintaining this data and the risk of creating additional funding fluctuations as States change their program design from year to year. The RESEA legislation does not authorize ETA to maintain a RESEA funding reserve. The final allocation formula is described below. B. Carry-Over Provisions Comments Three States commented on the proposed 25 percent carry-over limit, expressing preference to have it increased to 30 or 35 percent, or eliminated altogether. States also suggested that the formula should allow for a higher carry-over limit upon special request by a State. In response to these comments, ETA has increased the carry-over limit to 30 percent. This change ensures the majority of funds continue to be used to provide RESEA services in a timely manner while also providing States with additional flexibility to support program costs that may span across years, such as contractual costs. C. Hold-Harmless Provision Comments ETA received four comments from four commenters on the proposed five percent hold-harmless provision. Two comments expressed concern that the hold-harmless provision would not be applied in the initial distribution under the allocation formula. One commenter expressed concern that a fixed hold- PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 39019 harmless provision would negatively impact States with a stable IUR. The final comment recommended a gradual, tiered-approach to implementing the hold-harmless provision that would increase the hold-harmless rate over several years until it is fully implemented at the maximum five percent level. In response to these comments, ETA incorporated the recommended gradual, phased implementation strategy in which the maximum potential reduction increases from 3 to 5 percent over a 3year period. This phased implementation results in a longer transition period for states that may face reductions resulting from the new allocation formula to adjust their program design and will help prevent significant disruptions in service delivery. ETA is also clarifying that the hold-harmless provision will be applied during the initial formula allocation of funds in FY 2021 and each State, after applying the hold-harmless provision, will receive a FY 2021 allotment that is no less than an amount equal to at least 97 percent of its FY 2020 maximum RESEA grant award. Each State’s FY 2020 maximum RESEA grant award will be provided in forthcoming FY 2020 RESEA operating guidance. D. Minimum Funding Level Comments Three States provided comments pertaining to the absence of a minimum funding level for rural and less populated States. Two States provided comments recommending inclusion of a minimum funding level and a third State expressed concern that an additional ‘‘leveling factor’’ beyond the hold-harmless provision must be included to further protect small States from potential funding fluctuations associated with changes in the IUR. In response to these comments, ETA has incorporated a minimum funding level into the allocation formula as described below. The inclusion of a minimum funding level will allow all states, regardless of size, population density, or economic conditions, to implement or maintain an RESEA program. E. Administrative Costs and Other Funding Limitations. Three States provided comments on RESEA requirements that are not related to the formula allocation. One State submitted a comment recommending greater flexibility in administrative cost limits to support alternative approaches to grant management, such as the use of cost allocation plans. One State commented that all limits on RESEA funds should be removed to provide States with maximum flexibility in E:\FR\FM\08AUN1.SGM 08AUN1 39020 Federal Register / Vol. 84, No. 153 / Thursday, August 8, 2019 / Notices determining how to administer the RESEA program. A third State recommended providing States that are pursing program automation with additional program administration resources. Because none of these comments are related to the proposed formula allocation methodology, ETA made no changes to the proposed formula allocation. IV. Description of Base Allocation Formula The final base allocation formula has been modified in response to the public comments. The new formula uses two primary input variables: The IUR and the CLF Under this formula, each State’s average IUR for the 12 months ending June 30 will be divided by the national average IUR. The two resulting ratios will be multiplied together, producing a combined IUR–CLF weighting factor. A State’s allotment of the available RESEA funding will reflect the proportion of its State-specific combined weighting factor compared to the sum of all States combined weighting factors. Use of the IUR ensures that States with high IURs, and hence greater unemployment, receive a higher proportion of RESEA funds. Use of the CLF as a factor controls for State size. V. Description of the Hold-Harmless Provision The statutory language requires the Secretary to consider the importance of avoiding sharp reductions in grant funding to a state over time. 42 U.S.C. § 506(f)(1)(A). To satisfy this requirement, DOL will incorporate a phased hold-harmless provision as follows: jbell on DSK3GLQ082PROD with NOTICES (1) In FY 2021, each State will receive no less than an amount equal to at least 97 percent of its FY 2020 maximum grant award; (2) In FY 2022, each State will receive no less than an amount equal to at least 96 percent of its FY 2021 allotment; (3) In FY 2023 and subsequent years, each State will receive no less than an amount equal to at least 95 percent of its previous year’s allotment. VI. Minimum Funding Provisions No State will receive an amount equal to less than 0.28 percent of the total available funding for FY2021 RESEA’s base funding level. This approach mirrors the minimum funding provisions in the Wagner-Peyser Act (29 U.S.C. 49e) and acknowledges that all States have certain fixed costs to administer the program. VII. Carry-Over Threshold If a State has a balance of up to 30 percent of its previous year’s award, the VerDate Sep<11>2014 16:51 Aug 07, 2019 Jkt 247001 State may carry that amount over from one year to the next. However, a State agency carrying over an amount in excess of 30 percent will have any amount in excess of the 30 percent reduced from its subsequent year’s allocation, and the resulting additional resources will be included in the distribution to States that are under the 30 percent threshold. This provision is intended to ensure States are using the majority of funds to provide reemployment services to claimants in the year for which it is allocated and provide States with flexibility to support costs and activities that may span across years. VIII. Conclusion The RESEA funding formula articulated in this notice will be utilized beginning in FY 2021. It is ETA’s intent to provide States with funding planning targets annually in advance of the actual guidance and allocation. John Pallasch, Assistant Secretary for Employment and Training, Labor. [FR Doc. 2019–16988 Filed 8–7–19; 8:45 am] BILLING CODE 4510–FW–P DEPARTMENT OF LABOR Employment and Training Administration Workforce Information Advisory Council Employment and Training Administration, Labor. ACTION: Notice of Renewal of the Workforce Information Advisory Council AGENCY: Authority: Pursuant to the WagnerPeyser Act of 1933, as amended, 29 U.S.C. 49 et seq.; Workforce Innovation and Opportunity Act, Public Law 113– 128; Federal Advisory Committee Act, as amended, 5 U.S.C. App. SUMMARY: The Department of Labor (Department) announces the renewal of the Workforce Information Advisory Council (WIAC) charter. SUPPLEMENTARY INFORMATION: I. Background and Authority Section 15 of the Wagner-Peyser Act, 29 U.S.C. 49l–2, as amended by section 308 of the Workforce Innovation and Opportunity Act of 2014 (WIOA), Public Law 113–128 requires the Secretary of Labor (Secretary) to establish and maintain the WIAC. The statute, as amended, requires the Secretary, acting through the Commissioner of Labor Statistics and PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 the Assistant Secretary for Employment and Training, to formally consult at least twice annually with the WIAC to address: (1) Evaluation and improvement of the nationwide workforce and labor market information system established by the WagnerPeyser Act, and of the statewide systems that comprise the nationwide system, and (2) how the Department and the States will cooperate in the management of those systems. The Secretary, acting through the Bureau of Labor Statistics (BLS) and the Employment and Training Administration (ETA), and in consultation with the WIAC and appropriate Federal agencies, must also develop a 2-year plan for management of the system, with subsequent updates every two years thereafter. The statute generally prescribes how the plan is to be developed and implemented, outlines the contents of the plan, and requires the Secretary to submit the plan to designated authorizing committees in the House and Senate. By law, the Secretary must ‘‘seek, review, and evaluate’’ recommendations from the WIAC, and respond to the recommendations in writing to the WIAC. The WIAC must make written recommendations to the Secretary on the evaluation and improvement of the workforce and labor market information system, including recommendations for the 2-year plan. The 2-year plan, in turn, must describe WIAC recommendations and the extent to which the plan incorporates them. The WIAC accomplishes its objectives by, for example: (1) Studying workforce and labor market information issues; (2) seeking and sharing information on innovative approaches, new technologies, and data to inform employment, skills training, and workforce and economic development decision making and policy; and (3) advising the Secretary on how the workforce and labor market information system can best support workforce development, planning, and program development. II. Structure The Wagner-Peyser Act at section 15(d)(2)(B), requires the WIAC to have 14 representative members, appointed by the Secretary, consisting of: (i) Four members who are representatives of lead State agencies with responsibility for workforce investment activities, or State agencies described in Wagner-Peyser Act Section 4 (agency designated or authorized by Governor to cooperate with the Secretary), who have been nominated by such agencies or by a national E:\FR\FM\08AUN1.SGM 08AUN1

Agencies

[Federal Register Volume 84, Number 153 (Thursday, August 8, 2019)]
[Notices]
[Pages 39018-39020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-16988]


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DEPARTMENT OF LABOR

Employment and Training Administration


Allocating Grants to States for Reemployment Services and 
Eligibility Assessments (RESEA) in Accordance With Title III, Section 
306 of the Social Security Act (SSA)

AGENCY: Office of Unemployment Insurance (OUI), Employment and Training 
Administration (ETA), Department of Labor (DOL).

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Bipartisan Budget Act of 2018 (BBA), Public Law 115-123 
(2018), established permanent authorization for the RESEA program by 
enacting section 306 of title III, (SSA). This notice announces the 
formula to allocate base funds for the RESEA program, as provided under 
Section 306(f)(1), SSA, 42 U.S.C. 506(f)(1).
    On April 4, 2019, ETA published a notice in the Federal Register 
(84 FR 13319) requesting public comment concerning the development of a 
proposed formula that ETA will use to distribute funding to States for 
RESEA. The notice presented a description of a proposed allocation 
formula and public comments were requested. The comment period closed 
on May 6, 2019. This notice summarizes and responds to the comments 
received and publishes the final allocation formula that will take 
effect in Fiscal Year (FY) 2021.

DATES: The RESEA allocation formula described in this notice will take 
effect in FY 2021.

ADDRESSES: Questions about this notice may be submitted to the U.S. 
Department of Labor, Employment and Training Administration, Office of 
Unemployment Insurance, 200 Constitution Avenue NW, Room S-4524, 
Washington, DC 20210, Attention: Lawrence Burns, or by email at [email protected].

FOR FURTHER INFORMATION CONTACT: Lawrence Burns, Division of 
Unemployment Insurance Operations, at 202-693-3141 (this is not a toll-
free number), TTY 1-877-889-5627, or by email at 
Burns.[email protected].

SUPPLEMENTARY INFORMATION:

I. Introduction

    Since 2005, DOL and participating State workforce agencies have 
been addressing individual reemployment needs of Unemployment Insurance 
(UI) claimants and working to prevent and detect UI improper payments 
through the voluntary UI Reemployment and Eligibility Assessment (REA) 
program and, beginning in FY 2015, through the voluntary RESEA program.
    On February 9, 2018, the President signed the BBA, which included 
amendments to the SSA creating a permanent authorization for the RESEA 
program. The RESEA provisions are contained in section 30206 of the 
BBA, enacting new section 306 of the SSA. 42 U.S.C. 506. Section 306, 
SSA also contains provisions for funding the RESEA program.
    The primary goals of the RESEA program are to: Improve employment 
outcomes for individuals that receive unemployment compensation (UC) by 
reducing average duration of receipt of UC through employment; 
strengthen program integrity and reduce improper payments; promote 
alignment with the broader vision of the Workforce Innovation and 
Opportunity Act through increased program integration and service 
delivery for job seekers; and establish RESEA as an entry point to 
other workforce system partner programs for individuals receiving UC. 
Core services that must be provided to RESEA participants are:
     UI eligibility assessment, including review of work search 
activities, and referral to adjudication, as appropriate, if an issue 
or potential issue is identified;
     Labor market and career information that address the 
claimant's specific needs;
     Enrollment in Wagner-Peyser Act funded Employment 
Services;
     Support to the claimant to develop and implement an 
individual reemployment plan; and
     Information regarding, and access to, American Job Center 
services and providing referrals to reemployment services and training, 
as appropriate, to support the claimant's return to work.

II. Background

    Section 306, SSA, specifies three uses for amounts appropriated for 
the RESEA program and designates the proportion of annual 
appropriations to be assigned to these uses: (1) Base funding (84 
percent to 89 percent of the appropriation depending on the year) for 
States to operate the RESEA program, (2) outcome payments (10 percent 
to 15 percent of the

[[Page 39019]]

appropriation depending on the year) designed to reward States meeting 
or exceeding certain criteria, and (3) up to one percent for the 
Secretary of Labor to use for research and technical assistance to 
States. 42 U.S.C. 506(f). With respect to the base funding, section 
306(f)(1)(A), SSA, states:

    IN GENERAL.-- For each fiscal year after fiscal year 2020, the 
Secretary shall allocate a percentage equal to the base funding 
percentage \1\ for such fiscal year of the funds made available for 
grants under this section among the States awarded such a grant for 
such fiscal year using a formula prescribed by the Secretary based 
on the rate of insured unemployment (as defined in section 203(e)(1) 
of the federal-State Extended Unemployment Compensation Act of 1970 
(26 U.S.C. 3304 note)) in the State for a period to be determined by 
the Secretary. In developing such formula with respect to a State, 
the Secretary shall consider the importance of avoiding sharp 
reductions in grant funding to a State over time. 42 U.S.C Sec.  
506(f)(1)(A).
---------------------------------------------------------------------------

    \1\ The term ``base funding percentage'' as used here is a 
percentage of the funds appropriated for RESEA grants to operate the 
program in a fiscal year. Section 306(f)(1)(B), SSA, defines the 
base funding percentage for fiscal years 2021 through 2026 as 89 
percent and for fiscal years after 2026 as 84 percent.
---------------------------------------------------------------------------

III. Response to Public Comment

    ETA received a total of 19 comments from 14 commenters concerning 
the RESEA base allocation formula. These comments include: 6 comments 
regarding the general formula, 3 comments concerning carry-over 
provisions, 4 comments concerning the proposed hold-harmless provision, 
3 comments concerning the establishment of minimum funding levels, and 
3 comments concerning administrative and other program cost limits. The 
following is a summary of these comments and ETA's responses.

A. General Formula Comments

    Several commenters addressed formula design directly, including 
general concern expressed by multiple states that provisions must be 
made to ensure adequate funding levels for small and rural states. 
Members of the Committee on Ways and Means, U.S. House of 
Representatives, expressed concern that the proposed formula used 
elements that eliminated the Insured Unemployment Rate (IUR) rather 
than relied on the IUR as required in section 306(f), SSA. 42 U.S.C 
Sec.  506(f)(1)(A). Two States suggested considering additional 
factors, such as costs per RESEA and program and performance data. One 
State recommended the use of statistically-adjusted unemployment data 
over a 10-year period, with an emphasis on more recent data, in place 
of the IUR as a means of providing more stable funding levels. One 
State expressed support for the proposed formula allocation 
methodology, but recommended revisiting the formula if future 
legislation expanded program eligibility to additional populations. One 
State recommended ETA reserve a portion of RESEA funds to respond to 
sudden economic changes or other unforeseen circumstances that would 
require a one-time influx of additional funding.
    In response to these comments, as discussed more fully below, ETA 
has developed a revised allocation formula that uses two primary input 
variables: the IUR and the civilian labor force (CLF). These two 
factors are included in the formula because section 306, SSA, requires 
the formula to be based on the IUR and the CLF addresses the 
differences in state size. 42 U.S.C. 506(f)(1). It also includes 
additional provisions, discussed below, that are intended to prevent 
significant State funding fluctuations over time and to provide minimum 
funding for smaller or rural States. The use of additional data 
factors, such as cost per RESEA, were considered, but not included 
because of the increased burden of collecting and maintaining this data 
and the risk of creating additional funding fluctuations as States 
change their program design from year to year. The RESEA legislation 
does not authorize ETA to maintain a RESEA funding reserve. The final 
allocation formula is described below.

B. Carry-Over Provisions Comments

    Three States commented on the proposed 25 percent carry-over limit, 
expressing preference to have it increased to 30 or 35 percent, or 
eliminated altogether. States also suggested that the formula should 
allow for a higher carry-over limit upon special request by a State. In 
response to these comments, ETA has increased the carry-over limit to 
30 percent. This change ensures the majority of funds continue to be 
used to provide RESEA services in a timely manner while also providing 
States with additional flexibility to support program costs that may 
span across years, such as contractual costs.

C. Hold-Harmless Provision Comments

    ETA received four comments from four commenters on the proposed 
five percent hold-harmless provision. Two comments expressed concern 
that the hold-harmless provision would not be applied in the initial 
distribution under the allocation formula. One commenter expressed 
concern that a fixed hold-harmless provision would negatively impact 
States with a stable IUR. The final comment recommended a gradual, 
tiered-approach to implementing the hold-harmless provision that would 
increase the hold-harmless rate over several years until it is fully 
implemented at the maximum five percent level.
    In response to these comments, ETA incorporated the recommended 
gradual, phased implementation strategy in which the maximum potential 
reduction increases from 3 to 5 percent over a 3-year period. This 
phased implementation results in a longer transition period for states 
that may face reductions resulting from the new allocation formula to 
adjust their program design and will help prevent significant 
disruptions in service delivery. ETA is also clarifying that the hold-
harmless provision will be applied during the initial formula 
allocation of funds in FY 2021 and each State, after applying the hold-
harmless provision, will receive a FY 2021 allotment that is no less 
than an amount equal to at least 97 percent of its FY 2020 maximum 
RESEA grant award. Each State's FY 2020 maximum RESEA grant award will 
be provided in forthcoming FY 2020 RESEA operating guidance.

D. Minimum Funding Level Comments

    Three States provided comments pertaining to the absence of a 
minimum funding level for rural and less populated States. Two States 
provided comments recommending inclusion of a minimum funding level and 
a third State expressed concern that an additional ``leveling factor'' 
beyond the hold-harmless provision must be included to further protect 
small States from potential funding fluctuations associated with 
changes in the IUR. In response to these comments, ETA has incorporated 
a minimum funding level into the allocation formula as described below. 
The inclusion of a minimum funding level will allow all states, 
regardless of size, population density, or economic conditions, to 
implement or maintain an RESEA program.

E. Administrative Costs and Other Funding Limitations.

    Three States provided comments on RESEA requirements that are not 
related to the formula allocation. One State submitted a comment 
recommending greater flexibility in administrative cost limits to 
support alternative approaches to grant management, such as the use of 
cost allocation plans. One State commented that all limits on RESEA 
funds should be removed to provide States with maximum flexibility in

[[Page 39020]]

determining how to administer the RESEA program. A third State 
recommended providing States that are pursing program automation with 
additional program administration resources. Because none of these 
comments are related to the proposed formula allocation methodology, 
ETA made no changes to the proposed formula allocation.

IV. Description of Base Allocation Formula

    The final base allocation formula has been modified in response to 
the public comments. The new formula uses two primary input variables: 
The IUR and the CLF Under this formula, each State's average IUR for 
the 12 months ending June 30 will be divided by the national average 
IUR. The two resulting ratios will be multiplied together, producing a 
combined IUR-CLF weighting factor. A State's allotment of the available 
RESEA funding will reflect the proportion of its State-specific 
combined weighting factor compared to the sum of all States combined 
weighting factors. Use of the IUR ensures that States with high IURs, 
and hence greater unemployment, receive a higher proportion of RESEA 
funds. Use of the CLF as a factor controls for State size.

V. Description of the Hold-Harmless Provision

    The statutory language requires the Secretary to consider the 
importance of avoiding sharp reductions in grant funding to a state 
over time. 42 U.S.C. Sec.  506(f)(1)(A). To satisfy this requirement, 
DOL will incorporate a phased hold-harmless provision as follows:

    (1) In FY 2021, each State will receive no less than an amount 
equal to at least 97 percent of its FY 2020 maximum grant award;
    (2) In FY 2022, each State will receive no less than an amount 
equal to at least 96 percent of its FY 2021 allotment;
    (3) In FY 2023 and subsequent years, each State will receive no 
less than an amount equal to at least 95 percent of its previous 
year's allotment.

VI. Minimum Funding Provisions

    No State will receive an amount equal to less than 0.28 percent of 
the total available funding for FY2021 RESEA's base funding level. This 
approach mirrors the minimum funding provisions in the Wagner-Peyser 
Act (29 U.S.C. 49e) and acknowledges that all States have certain fixed 
costs to administer the program.

VII. Carry-Over Threshold

    If a State has a balance of up to 30 percent of its previous year's 
award, the State may carry that amount over from one year to the next. 
However, a State agency carrying over an amount in excess of 30 percent 
will have any amount in excess of the 30 percent reduced from its 
subsequent year's allocation, and the resulting additional resources 
will be included in the distribution to States that are under the 30 
percent threshold. This provision is intended to ensure States are 
using the majority of funds to provide reemployment services to 
claimants in the year for which it is allocated and provide States with 
flexibility to support costs and activities that may span across years.

VIII. Conclusion

    The RESEA funding formula articulated in this notice will be 
utilized beginning in FY 2021. It is ETA's intent to provide States 
with funding planning targets annually in advance of the actual 
guidance and allocation.

John Pallasch,
Assistant Secretary for Employment and Training, Labor.
[FR Doc. 2019-16988 Filed 8-7-19; 8:45 am]
 BILLING CODE 4510-FW-P