[Title 20 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2005 Edition]
[From the U.S. Government Printing Office]



[[Page i]]



          20


          Part 500 to End

                         Revised as of April 1, 2005


          Employees' Benefits
          
          


________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of April 1, 2005
          With Ancillaries
                    Published by
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 20:
          Chapter IV--Employees' Compensation Appeals Board, 
          Department of Labor                                        3
          Chapter V--Employment and Training Administration, 
          Department of Labor                                       11
          Chapter VI--Employment Standards Administration, 
          Department of Labor                                      871
          Chapter VII--Benefits Review Board, Department of 
          Labor                                                   1059
          Chapter VIII--Joint Board for the Enrollment of 
          Actuaries                                               1077
          Chapter IX--Office of the Assistant Secretary for 
          Veterans' Employment and Training Service, 
          Department of Labor                                     1109
  Finding Aids:
      Table of CFR Titles and Chapters........................    1121
      Alphabetical List of Agencies Appearing in the CFR......    1139
      List of CFR Sections Affected...........................    1149

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

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 20 CFR 501.1 refers 
                       to title 20, part 501, 
                       section 1.

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

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

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HOW TO USE THE CODE OF FEDERAL REGULATIONS

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OMB CONTROL NUMBERS

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Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
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the revision dates of the 50 CFR titles.

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[[Page vii]]

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                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

April 1, 2005.

[[Page ix]]



                               THIS TITLE

    Title 20--Employees' Benefits is composed of three volumes. The 
first volume, containing parts 1-399, includes all current regulations 
issued by the Office of Workers' Compensation Programs, Department of 
Labor and the Railroad Retirement Board. The second volume, containing 
parts 400-499, includes all current regulations issued by the Social 
Security Administration. The third volume, containing part 500 to End, 
includes all current regulations issued by the Employees' Compensation 
Appeals Board, the Employment and Training Administration, the 
Employment Standards Administration, the Benefits Review Board, the 
Office of the Assistant Secretary for Veterans' Employment and Training 
(all of the Department of Labor) and the Joint Board for the Enrollment 
of Actuaries. The contents of these volumes represent all current 
regulations codified under this title of the CFR as of April 1, 2005.

    An Index to chapter III appears in the second volume.

    For this volume, Cheryl E. Sirofchuck was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Frances D. McDonald, assisted by Alomha S. Morris.

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                      TITLE 20--EMPLOYEES' BENEFITS




                  (This book contains part 500 to end)

  --------------------------------------------------------------------
                                                                    Part

chapter iv--Employees' Compensation Appeals Board, 
  Department of Labor.......................................         501

chapter v--Employment and Training Administration, 
  Department of Labor.......................................         601

chapter vi--Employment Standards Administration, Department 
  of Labor..................................................         701

chapter vii--Benefits Review Board, Department of Labor.....         801

chapter viii--Joint Board for the Enrollment of Actuaries...         900

chapter ix--Office of the Assistant Secretary for Veterans' 
  Employment and Training Service, Department of Labor......        1001

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 CHAPTER IV--EMPLOYEES' COMPENSATION APPEALS BOARD, DEPARTMENT OF LABOR




  --------------------------------------------------------------------
Part                                                                Page
501             Rules of procedure..........................           5

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PART 501_RULES OF PROCEDURE--Table of Contents




Sec.
501.1 Definitions.
501.2 Scope and applicability of rules; composition and jurisdiction of 
          the Board.
501.3 Application for review.
501.4 Transmittal of record.
501.5 Oral argument.
501.6 Decisions.
501.7 Petition for reconsideration.
501.8 Docket of proceedings; inspection of docket and records.
501.9 Regulation of proceedings.
501.10 Number of copies of pleadings and related documents; service; 
          computation of time.
501.11 Appearances.
501.12 Intervention.
501.13 Place of proceedings.

    Authority: Sec. 32, 39 Stat. 749, 5 U.S.C. 8145; sec. 3, 
Reorganization Plan No. 2 of 1946, 60 Stat. 1095; 3 CFR 1943-48 Comp., 
p. 1064; sec. 2, Reorganization Plan No. 19 of 1950, 64 Stat. 1272; 3 
CFR 1949-53 Comp., p. 1010.

    Source: 27 FR 12186, Dec. 8, 1962, unless otherwise noted.



Sec. 501.1  Definitions.

    (a) Act means the Federal Employees' Compensation Act and any 
statutory extension or application thereof.
    (b) Board means the Employees' Compensation Appeals Board.
    (c) Office means the Office of Workers' Compensation Programs and in 
the case of employees of the Canal Zone Government and of the Panama 
Canal Company, the Governor of the Canal Zone.
    (d) Director means the Director of the Office and in the case of 
employees of the Canal Zone Government and of the Panama Canal Company, 
the Governor of the Canal Zone.
    (e) Party means any person admitted and named as a party on the 
docket of the Board, including any intervenors.
    (f) Counsel includes any person who is a member in good standing of 
the bar of the Supreme Court of the United States or the highest court 
of any State, territory, or the District of Columbia.

[27 FR 12186, Dec. 8, 1962, as amended at 29 FR 13519, Oct. 1, 1964]



Sec. 501.2  Scope and applicability of rules; composition and 
jurisdiction of the Board.

    (a) The regulations in this part provide the rules of practice of 
the Board in hearing and deciding appeals from final decisions of the 
Office.
    (b) The Board consists of three members appointed by the Secretary 
of Labor, one of whom is designated as Chairman of the Board and 
administrative officer.
    (c) The Board has jurisdiction to consider and decide appeals from 
the final decision of the Office in any case arising under the Act. The 
Board may review all relevant questions of law, fact, and discretion in 
such cases. There shall be no appeal with respect to any interlocutory 
matter disposed of by the Office during the pendency of a case. The 
review of a case shall be limited to the evidence in the case record 
which was before the Office at the time of its final decision.



Sec. 501.3  Application for review.

    (a) Who may file. Any person adversely affected by a final decision 
of the Director, or his duly authorized representative, may file an 
application for review of such decision by the Board.
    (b) Place of filing. Any application for review shall be filed with 
the Clerk of the Board, Employees' Compensation Appeals Board, U.S. 
Department of Labor, Washington, DC 20210.
    (c) Form of application; contents. An application for review should 
be filed with the Board upon Form AB-1 (Application for Review). Any 
application made without the use of the form shall contain the following 
information: The full name and address of the applicant, the name of the 
injured or deceased employee, the employing establishment, the case file 
number assigned to the case by the Office, a description of the 
particular injury involved, the date of the injury, the place of injury, 
and the date of the decision being appealed. If the applicant is being 
represented by another person in the proceeding, the name and address of 
such representative should be stated. Each application shall include a 
succinct statement indicating the contentions of the applicant and 
describing with particularity

[[Page 6]]

any findings of fact, conclusions of law, or exercise of (or failure to 
exercise) discretion complained of. Any application containing 
incomplete information shall be returned to the applicant with a 
description of the additional information needed and a reasonable 
opportunity for furnishing any such information shall be allowed.
    (d) Time for filing. (1) Except as provided in paragraph (d)(2) of 
this section, any application for review by a person residing within the 
United States or Canada must be filed within 90 days from the date of 
issuance of the final decision of the Director, and any application for 
review by a person residing outside the United States or Canada must be 
filed within 180 days from the date of issuance.
    (2) For good cause shown, the Board may in its discretion waive a 
failure to file an application within the time limitations provided in 
paragraph (d)(1) of this section, but for no longer than one year from 
the date of issuance of the final decision of the Director.
    (3) Date of filing--(i) Date or receipt. Except as otherwise 
provided in this section, a notice of appeal is considered to have been 
filed only as of the date it is received in the office of the clerk of 
the Board.
    (ii) Date of mailing. If the notice is sent by mail and the fixing 
of the date of delivery as the date of filing would render the appeal 
untimely, it will be considered to have been filed as of the date of 
mailing. The date appearing on the postmark (when available and legible) 
shall be prima facie evidence of the date of mailing. If there is no 
postmark or it is not legible, other evidence, such as, but not limited 
to, certified mail receipts, certificate of service and affidavits, may 
be used to establish the date of mailing.
    (e) Briefs and supporting statements. Any application for review may 
be accompanied by a brief or supporting statement.

[27 FR 12186, Dec. 8, 1982, as amended at 53 FR 49491, Dec. 7, 1988]



Sec. 501.4  Transmittal of record.

    (a) The Board shall serve upon the Director a copy of each 
application for review and any brief or supporting statement 
accompanying it. Within 60 days from the date of such service, the 
Director, through his legal representative, the Solicitor of Labor, 
shall transmit to the Board the record of the proceeding to which the 
application refers and a statement in support of his decision, or other 
pleading, as appropriate, signed on his behalf by his legal 
representative.
    (b) On application of the Director, the Board may in its discretion 
extend the 60-day time for submittal to the Board of the record of 
proceedings and accompanying statement or pleading.

[42 FR 62471, Dec. 13, 1977]



Sec. 501.5  Oral argument.

    (a) Notice. Whenever any party requests an opportunity to present 
oral argument the Board shall schedule the case for argument. Each party 
shall be notified at least 10 days before the date of argument. The 
notice shall state the issues to be heard, as determined by the Board.
    (b) Time allowed. Generally not more than 1 hour shall be allowed 
for oral argument by any party although in appropriate cases the Board 
may in its discretion extend or shorten the time allowed.
    (c) Failure to respond to notice. Failure to respond to a notice of 
oral argument shall not prejudice the rights of any party to the 
proceeding. The Board in its discretion may set the case for further 
argument upon notice or it may proceed to dispose of the appeal pursuant 
to Sec. 501.6.



Sec. 501.6  Decisions.

    (a) The decision of the Board shall contain a written opinion 
setting forth the reasons for the action taken and an appropriate order. 
The decision may consist of affirmance, reversal, remand for further 
development of the evidence, or other appropriate action. A copy of the 
decision shall be sent by the Board to all parties in interest. The case 
record shall be returned to the Director with a copy of the decision.
    (b) A decision of not less than two members shall be the decision of 
the Board.
    (c) The decision of the Board shall be final as to the subject 
matter appealed and such decision shall not be subject to review, except 
by the Board.

[[Page 7]]

    (d) The decision of the Board shall be final upon the expiration of 
30 days from the date of the filing of the order, unless the Board shall 
in its order fix a different period of time or reconsideration by the 
Board is granted.



Sec. 501.7  Petition for reconsideration.

    (a) Procedure for filing. A petition for reconsideration of a 
decision of the Board may be filed with the Board within 30 days from 
the date of the order, or, if another period is specified in the order, 
then prior to the time when the order becomes final. The petition shall 
state the grounds relied upon, including any matters claimed to have 
been erroneously decided and shall specify the alleged errors. The 
petition may be in letter form.
    (b) Answer; procedure for disposition of petitions. Upon the filing 
of a petition for reconsideration, each of the other parties to the 
proceeding may file an answer thereto within such time as may be fixed 
by the Board. If reconsideration should be granted, reargument upon 
reasonable notice may be allowed in the discretion of the Board. After 
reconsideration of a case the Board shall either grant or deny the 
petition.



Sec. 501.8  Docket of proceedings; inspection of docket and records.

    (a) Maintenance of docket. A docket of all proceedings shall be 
maintained by the Board. Each proceeding shall be assigned a number in 
chronological order upon the date on which an application for review is 
received. Each proceeding shall be generally considered in the order in 
which it is docketed, although for good cause shown the Board may 
advance the order in which a particular case is to be considered. 
Correspondence or further applications in connection with any pending 
case shall refer to the docket number of that case.
    (b) Inspection of docket and records. The docket of the Board shall 
be open to public inspection. The Board shall publish its decisions in 
such form as to be readily available for inspection, and shall allow the 
public inspection thereof at the permanent location of the Board. 
Inspection of the papers and documents included in the case record of 
any proceeding before the Board shall be permitted or denied in 
accordance with the standards provided in Sec. 1.22 of this title. The 
Chairman of the Board shall exercise the functions prescribed in 29 CFR 
70.74a.

[27 FR 12186, Dec. 8, 1962, as amended at 37 FR 26710, Dec. 15, 1972]



Sec. 501.9  Regulation of proceedings.

    The proceedings shall be conducted under the supervision of the 
Chairman or Acting Chairman, who shall regulate such matters as the 
granting of continuances, acceptance of briefs and other procedural 
matters.



Sec. 501.10  Number of copies of pleadings and related documents; 
service; computation of time.

    (a) Except as provided in paragraph (b) of this section, any 
application, pleading, petition, brief or other memorandum shall be 
filed in duplicate (original and 1 copy) with the Board; the Board shall 
serve the copy upon the other party.
    (b) Instead of filing the duplicate of any such document with the 
Board, the party submitting it may serve the duplicate or copy directly 
upon the Director and make a notation to that effect upon the copy filed 
with the Board.
    (c) Any notice or order required under this part to be given or 
served shall be by certified or registered mail or by personal service.
    (d) Computation of Time. (1) In computing any period of time 
prescribed or allowed by these rules or by direction of the Board, the 
first day counted shall be the day after the event from which the time 
period begins to run, and the last day for filing shall be included in 
the computation. If the last day for filing falls on a Saturday, Sunday, 
or Federal holiday, the first working day thereafter shall be the last 
day for timely filing. For purposes of computing the time for filing a 
notice of appeal or a petition for reconsideration, the event which 
commences the running of the time period shall be construed as occurring 
on the date the relevant decision is issued, and not the date the 
decision is actually received.
    (2) Whenever a paper is served on the Board by mail, paragraph 
(d)(1) of this section will be deemed complied with if the envelope 
containing the paper is

[[Page 8]]

postmarked within the time period allowed, computed as in paragraph 
(d)(1) of this section. If there is no postmark, or it is not legible, 
other evidence, such as, but not limited to, certified mail receipts, 
certificate of service and affidavits, may be used to establish the date 
of mailing.
    (3) A waiver or an extension of the time limitations for filing a 
paper, other than a notice of appeal or a petition for reconsideration, 
may be requested by motion.

[27 FR 12186, Dec. 8, 1962, as amended at 53 FR 49491, Dec. 7, 1988]



Sec. 501.11  Appearances.

    (a) Representation. In any proceeding before the Board, a party may 
appear in person, or by counsel or any other duly authorized person, 
including any accredited representative of an employee organization. No 
person shall be recognized as representing an appellant or intervenor 
unless there shall be filed with the Board a statement in writing, 
signed by the party to be represented, authorizing such representation. 
Such representative when accepted shall continue to be recognized unless 
he should abandon such capacity, withdraw, or the appellant or 
intervenor directs otherwise.
    (b) Former members of the Board; other employees of the Department 
of Labor. A former member of the Board shall not be allowed to 
participate as counsel or other representative before the Board in any 
proceeding until two years from the termination of his status as a Board 
member. The practice of other former employees of the Department of 
Labor are governed by 29 CFR 2.2 and 2.3.
    (c) Debarment of counsel or other representative. Whenever in any 
proceeding the Board finds that a person acting as counsel or other 
representative for any party to the proceeding is guilty of unethical or 
unprofessional conduct, the Board may order that such person be excluded 
from further acting as counsel or other representative in such 
proceeding. An appeal may be taken to the Secretary of Labor from such 
an order, but the proceeding shall not be delayed or suspended pending 
disposition of the appeal, although the Board may suspend the proceeding 
for a reasonable time for the purpose of enabling the party to obtain 
different counsel or other representative. Whenever the Board has issued 
an order precluding a person from further acting as counsel or other 
representative in a proceeding, the Board shall within a reasonable time 
thereafter submit to the Secretary of Labor a report of the facts and 
circumstances surrounding the issuance of the order, and shall recommend 
what action the Secretary of Labor should take in regard to the 
appearance of such person as counsel or other representative in other 
proceedings before the Board. Before any action is taken debarring such 
person as counsel or representative from other proceedings, he shall be 
furnished notice and opportunity to be heard on the matter.
    (d) Fees. No claim for legal or other service rendered in respect to 
a proceeding before the Board to or on account of any person, shall be 
valid unless approved by the Board or by a member thereof. No contract 
for a stipulated fee or for a fee upon a contingent basis shall be 
recognized by the Board, and no fee for service shall be approved except 
upon an application to the Board supported by a sufficient statement of 
the extent and character of the necessary work done before the Board on 
behalf of the interested party. Except where such representation is 
gratuitous, the fee approved by the Board, or by a member thereof, shall 
be reasonably commensurate with the actual necessary work performed by 
such representative, taking into account the capacity in which the 
representative has appeared, the amount of the compensation involved, 
and the circumstances of the appellant.



Sec. 501.12  Intervention.

    The Board may permit any person whose rights may be affected by any 
proceeding before the Board to intervene therein whenever such person 
shows in a written petition to intervene that such rights are so 
affected. The petition should state with precision and particularity (a) 
the rights affected; and (b) the nature of any argument he intends to 
make.

[[Page 9]]



Sec. 501.13  Place of proceedings.

    The Board shall sit in Washington, DC.

[[Page 11]]



 CHAPTER V--EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR




  --------------------------------------------------------------------
Part                                                                Page
601             Administrative procedure....................          15
602             Quality control in the Federal-State 
                    unemployment insurance system...........          20
603             Income and eligibility verification system..          28
606             Tax credits under the Federal Unemployment 
                    Tax Act; advances under Title XII of the 
                    Social Security Act.....................          31
609             Unemployment compensation for Federal 
                    civilian employees......................          40
614             Unemployment compensation for ex-
                    servicemembers..........................          52
615             Extended benefits in the Federal-State 
                    Unemployment Compensation Program.......          73
616             Interstate arrangement for combining 
                    employment and wages....................          91
617             Trade adjustment assistance for workers 
                    under the Trade Act of 1974.............          96
618-621         [Reserved]
625             Disaster unemployment assistance............         156
626             Introduction to the regulations under the 
                    Job Training Partnership Act............         182
627             General provisions governing programs under 
                    Titles I, II, and III of the act........         191
628             Programs under Title II of the Job Training 
                    Partnership Act.........................         234
629-630         [Reserved]
631             Programs under Title III of the Job Training 
                    Partnership Act.........................         254
632             Indian and Native American employment and 
                    training programs.......................         273
633             Migrant and seasonal farmworker programs....         304
634             Labor market information programs under 
                    Title IV, Part E of the Job Training 
                    Partnership Act.........................         319
636             Complaints, investigations and hearings.....         319

[[Page 12]]

637             Programs under Title V of the Job Training 
                    Partnership Act.........................         328
638             Job Corps program under Title IV-B of the 
                    Job Training Partnership Act............         331
639             Worker adjustment and retraining 
                    notification............................         351
640             Standard for benefit payment promptness--
                    unemployment compensation...............         361
641             Provisions governing the Senior Community 
                    Service Employment Program..............         364
645             Provisions governing welfare-to-work grants.         401
646             Provisions governing the Indian and Native 
                    American welfare-to-work grant programs.         423
650             Standard for appeals promptness--
                    unemployment compensation...............         431
651             General provisions governing the Federal-
                    State Employment Service System.........         433
652             Establishment and functioning of State 
                    employment services.....................         437
653             Services of the Employment Service System...         445
654             Special responsibilities of the Employment 
                    Service System..........................         463
655             Temporary employment of aliens in the United 
                    States..................................         472
656             Labor certification process for permanent 
                    employment of aliens in the United 
                    States..................................         683
657             Provisions governing grants to State agencies for employment services 
activities [Reserved]
658             Administrative provisions governing the Job 
                    Service System..........................         709
660             Introduction to the regulations for 
                    workforce investment systems under Title 
                    I of the Workforce Investment Act.......         738
661             Statewide and local governance of the 
                    workforce investment system under Title 
                    I of the Workforce Investment Act.......         740
662             Description of the one-stop system under 
                    Title I of the Workforce Investment Act.         755
663             Adult and dislocated worker activities under 
                    Title I of the Workforce Investment Act.         762
664             Youth activities under Title I of the 
                    Workforce Investment Act................         778
665             Statewide workforce investment activities 
                    under Title I of the Workforce 
                    Investment Act..........................         786
666             Performance accountability under Title I of 
                    the Workforce Investment Act............         790
667             Administrative provisions under Title I of 
                    the Workforce Investment Act............         796

[[Page 13]]

668             Indian and Native American programs under 
                    Title I of the Workforce Investment Act.         823
669             National farmworkers jobs program under 
                    Title I of the Workforce Investment Act.         840
670             The Job Corps under Title I of the Workforce 
                    Investment Act..........................         850
671             National emergency grants for dislocated 
                    workers.................................         866

[[Page 15]]



PART 601_ADMINISTRATIVE PROCEDURE--Table of Contents




  Subpart A_Approval, Certification and Findings With Respect to State 
  Laws and Plans of Operation for Normal and Additional Tax Credit and 
                             Grant Purposes

Sec.
601.1 General.
601.2 Approval of State unemployment compensation laws.
601.3 Findings with respect to State laws and plans of operation.
601.4 Certification for tax credit.
601.5 Withholding payments and certifications.

                  Subpart B_Grants, Advances and Audits

601.6 Grants for administration of unemployment insurance and employment 
          service.
601.7 [Reserved]
601.8 Agreement with Postmaster General.
601.9 Audits.

    Authority: 5 U.S.C. 301; 26 U.S.C. Chapter 23; 29 U.S.C. 49k; 38 
U.S.C. Chapters 41 and 42; 39 U.S.C. 3202(a)(1)(E) and 3202 note; 42 
U.S.C. 1302; and Secretary of Labor's Order No. 4-75, 40 FR 18515.

    Source: 15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, unless 
otherwise noted.



  Subpart A_Approval, Certification and Findings With Respect to State 
  Laws and Plans of Operation for Normal and Additional Tax Credit and 
                             Grant Purposes



Sec. 601.1  General.

    (a) State unemployment compensation laws are approved and certified 
as provided in section 3304 of the Internal Revenue Code of 1954; 
findings are made regarding reduced rates permitted by a State law 
(section 3303(a) of the Internal Revenue Code of 1954) and such laws are 
certified as provided in section 3303(b) of the Internal Revenue Code of 
1954; findings are made regarding the inclusion of specified provisions 
(section 303(a) of the Social Security Act) in State laws approved under 
section 3304(a) of the Internal Revenue Code of 1954; findings are made 
whether the States have accepted the provisions of the Wagner-Peyser Act 
and whether their plans of operation for public employment offices 
comply with the provisions of said Act.
    (b) Normal and additional tax credit is given to taxpayers against 
taxes imposed by section 3301 of the Internal Revenue Code of 1954.
    (c) Grants of funds are made to States for administration of their 
employment security laws if their unemployment compensation laws and 
their plans of operation for public employment offices meet required 
conditions of Federal law. (Section 303(a) of the Social Security Act; 
section 3304(a) of the Internal Revenue Code of 1954; sections 6, 7, and 
8 of the Wagner-Peyser Act.)
    (d) As used throughout this Part, the terms ``Secretary'' or 
``Secretary of Labor'' shall refer to the Secretary of Labor, U.S. 
Department of Labor, or his or her designee.

[15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, as amended at 61 
FR 19983, May 3, 1996]



Sec. 601.2  Approval of State unemployment compensation laws.

    States may at their option submit their unemployment compensation 
laws for approval (section 3304(a) of the Internal Revenue Code of 
1954).
    (a) Submission. The States submit to the Regional Administrator, 
Employment and Training Administration (RAETA) two copies of the State 
unemployment compensation law properly certified by an authorized State 
official to be true and complete, together with a written request for 
approval.
    (b) Review of State law. The RAETA reviews the State law and 
forwards one copy to the central office of the Employment and Training 
Administration with his comments. The central office reviews the RAETA's 
comments and analyzes the State law from the standpoint of the 
requirements of section 3304(a) of the Internal Revenue Code of 1954.
    (c) Approval. The Secretary of Labor determines whether the State 
law contains the provisions required by section 3304(a) of the Internal 
Revenue Code of 1954. If the State law is approved, the Secretary 
notifies the Governor of the State within 30 days of the submission of 
such law.
    (d) Certification. On December 31 of each taxable year the Secretary 
of

[[Page 16]]

Labor certifies, for the purposes of normal tax credit (section 
3302(a)(1) of the Internal Revenue Code of 1954), to the Secretary of 
the Treasury each State the law of which he has previously approved. 
(See also Sec. 601.5.)

(Approved by the Office of Management and Budget under control number 
1205-0222)

[15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, as amended at 49 
FR 18295, Apr. 30, 1984; 50 FR 51241, Dec. 16, 1985]



Sec. 601.3  Findings with respect to State laws and plans of operation.

    For purposes of grants, findings are made regarding the inclusion in 
State unemployment compensation laws, approved under section 3304(a) of 
the Internal Revenue Code of 1954, of provisions required by section 
303(a) of the Social Security Act (see Sec. 601.2); findings are also 
made whether a State has accepted the provisions of the Wagner-Peyser 
Act and whether its plan of operation for public employment offices 
complies with the provisions of said act. For purposes of additional tax 
credit, findings are made regarding reduced rates of contributions 
permitted by the State law (section 3303(a) (1) of the Internal Revenue 
Code of 1954).

So that the Secretary of Labor may be enabled to determine the status of 
State laws and plans of operation, all relevant State materials, such as 
statutes, executive and administrative orders, legal opinions, rules, 
regulations, interpretations, court decisions, etc., are required to be 
submitted currently.
    (a) Submission. The States submit currently to the RAETA two copies 
of relevant State material, properly certified by an authorized State 
official to be true and complete.
    (b) Review. The RAETA reviews the State material and forwards one 
copy to the central office with his comments. The central office reviews 
the material from the standpoint of its conformity with section 303(a) 
of the Social Security Act, section 3303(a) of the Internal Revenue Code 
of 1954, or the Wagner-Peyser Act, as the case may be.
    (c) Findings. The Secretary makes findings as provided in the cited 
sections of the Federal law. In the event that the Secretary is unable 
to make the findings required for certification for payment or for 
certification of the law for purposes of additional tax credit, further 
discussions with State officials are undertaken.

(Approved by the Office of Management and Budget under control number 
1205-0222)

[15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, as amended at 49 
FR 18295, Apr. 30, 1984; 50 FR 51241, Dec. 16, 1985]



Sec. 601.4  Certification for tax credit.

    (a) Within 30 days after submittal of a State unemployment 
compensation law for such purpose, the Secretary certifies to the State 
agency, in accordance with the provisions of section 3303(b)(3) of the 
Internal Revenue Code of 1954, his findings regarding reduced rates of 
contributions allowable under such law. On December 31 of each taxable 
year the Secretary certifies to the Secretary of the Treasury the law of 
each State, certified with respect to such year under section 3304 of 
the Internal Revenue Code of 1954 (see Sec. 601.2), which he finds 
allows reduced rates with respect to such taxable year only in 
accordance with the provisions of section 3303(a) of the Internal 
Revenue Code of 1954.
    (b) With regard to certification for payment, see Sec. 601.6.



Sec. 601.5  Withholding payments and certifications.

    (a) When withheld. Payment of funds to States or yearend 
certification of State laws, or both, are withheld when the Secretary 
finds, after reasonable notice and opportunity for hearing:
    (1) That any provision required by section 303(a) of the Social 
Security Act is no longer included in the State unemployment 
compensation law; or
    (2) That the State unemployment compensation law has been so changed 
as no longer to meet the conditions required by section 3303(a) of the 
Internal Revenue Code of 1954 (section 3303(b)(3) of the Internal 
Revenue Code); or
    (3) That the State unemployment compensation law has been so amended 
as no longer to contain the provisions specified in section 3304(a) or 
has failed to comply substantially with any such provision and such 
finding has become effective (section 3304(c) of the Internal Revenue 
Code of 1954); or

[[Page 17]]

    (4) That in the administration of the State unemployment 
compensation law there has been a failure to comply substantially with 
required provisions of such law (section 303(b)(2) of the Social 
Security Act and section 3303(b)(3) of the Internal Revenue Code of 
1954); or
    (5) That in the administration of the State unemployment 
compensation law there has been a denial, in a substantial number of 
cases, of benefits due under such law, except that there may be no such 
finding until the question of entitlement has been decided by the 
highest judicial authority given jurisdiction under such State law 
(section 303(b)(1) of the Social Security Act); or
    (6) That a State fails to make its unemployment compensation records 
available to the Railroad Retirement Board or fails to cooperate with 
Federal agencies charged with the administration of unemployment 
compensation laws (section 303(c) of the Social Security Act); or
    (7) That a State no longer has a plan of operation for public 
employment offices complying with the provisions of the Wagner-Peyser 
Act; or
    (8) That a State agency has not properly expended, in accordance 
with an approved plan of operation, the Federal monies paid it for 
administration of its public employment service.
    (b) Informal discussion. Such hearings are generally not called, 
however, until after every reasonable effort has been made by regional 
and central office representatives to resolve the question involved by 
conference and discussion with State officials. Formal notification of 
the date and place of a hearing does not foreclose further negotiations 
with State officials.
    (c) Notice of noncertification. If, at any time during the taxable 
year, the Secretary of Labor has reason to believe that a State whose 
unemployment compensation law he has previously approved may not be 
certified, he promptly notifies the Governor of the State to that effect 
(section 3304(d) of the Internal Revenue Code of 1954).
    (d) Notice of hearing. Notice of hearing is sent by the Secretary of 
Labor to the State employment security agency. The notice sets forth the 
purpose of the hearing, the time, date, and place at which the hearing 
will be held, and the rules of procedure which will be followed. At a 
hearing the State is given an opportunity to present arguments and all 
relevant evidence, written or oral. The Secretary makes the necessary 
determination or findings, on the basis of the record of such hearings. 
A notice of the Secretary's determination or finding is sent to the 
State employment security agency.
    (e) Civil Rights Act issues. To the extent that any proposed 
withholding of funds involves circumstances within the scope of title VI 
of the Civil Rights Act of 1964 and the regulations promulgated 
thereunder, the procedure set forth in 29 CFR part 31 shall be 
applicable.
    (f) Tax credit reductions. (1) Section 3302(c)(2) of the Internal 
Revenue Code of 1954 prescribes the conditions under which the total 
credits otherwise allowable under section 3302 for a taxable year in the 
case of a taxpayer subject to the unemployment compensation law of a 
State shall be reduced on account of an outstanding balance of advances 
made to the State pursuant to title XII of the Social Security Act. As 
amended by section 110(a) of the Emergency Compensation and Special 
Unemployment Assistance Extension Act of 1975 (Pub. L. 94-45, approved 
June 30, 1975; 89 Stat. 236, 239), and as further amended by title II of 
the Emergency Unemployment Compensation Extension Act of 1977 (Pub. L. 
95-19, approved April 12, 1977; 91 Stat. 39, 43), the incremental 
reductions in total credits will not apply to a State with respect to 
the taxable years beginning on January 1, 1975, January 1, 1976, January 
1, 1977, January 1, 1978, and January 1, 1979, if the Secretary of Labor 
finds as to each such year that the State has studied and taken 
appropriate action with respect to the financing of its unemployment 
compensation program so as substantially to accomplish the purpose of 
restoring the fiscal soundness of the State's unemployment account in 
the Unemployment Trust Fund and permitting the repayment within a 
reasonable time of any advances made to the State's account pursuant to 
title XII of the Social Security Act.

[[Page 18]]

    (2) The Secretary of Labor's finding with respect to a State as to 
any of the taxable years 1975, 1976, 1977, 1978, and 1979 will be based 
on his determination as to whether the State has taken appropriate 
action resulting in:
    (i) Amendment of its unemployment compensation law, effective in or 
prior to the taxable year with respect to which the finding is made, or 
effective at the beginning of the succeeding taxable year, increasing 
the State's unemployment tax rate, increasing the State's unemployment 
tax base, or changing the State's experience rating formula, or a 
combination of such changes, so as to be estimated by the Secretary to 
achieve for the taxable year with respect to which the finding is made 
or for the period following the effective date of the amendment:
    (A) An average employer tax rate, computed as a percentage of the 
total wages in employment covered by the State's unemployment 
compensation law, which exceeds the State's average annual benefit cost 
rate, computed as a percentage of the total wages in employment covered 
by the State's unemployment compensation law, for the ten calendar years 
immediately preceding the year with respect to which the finding is 
made; and
    (B) An effective minimum employer tax rate which is not less than 
1.0 percent of the wages of any employer which are subject to tax under 
the Federal Unemployment Tax Act for the same year; and
    (C) An effective maximum employer tax rate which exceeds 2.7 percent 
of the wages of any employer which are subject to tax under the Federal 
Unemployment Tax Act for the same year, or provision for no reduced rate 
of contributions for any employer subject to the State unemployment 
compensation law; or
    (ii)(A) Amendment of its unemployment compensation law increasing 
the State's unemployment tax rate, increasing the State's unemployment 
tax base, or changing the State's experience rating formula, or a 
combination of such changes, so as to be estimated by the Secretary of 
Labor to result in increasing contributions to the State's unemployment 
fund, for the taxable year with respect to which the finding is made, 
and the allocation from such increased contributions of a sum sufficient 
to make the repayment in the amount and within the time limit prescribed 
in paragraph (f)(2)(ii)(B) of this section; and
    (B) Repayment to the Treasury of the United States, for credit to 
the Federal unemployment account in the Unemployment Trust Fund, prior 
to November 10 of the taxable year with respect to which the finding is 
made, of an amount equal to the amount of the additional tax which would 
be payable by all taxpayers subject to the unemployment compensation law 
of the State for that taxable year if (1) for any year prior to 1978, 
the reduction in total credits prescribed by section 3302(c)(2)(A) of 
the Internal Revenue Code of 1954 for that taxable year was applied 
without regard to the amendment added by section 110(a) of the Emergency 
Compensation and Special Unemployment Assistance Extension Act of 1975, 
and (2) for any year after 1977, the reduction in total credits 
prescribed by the applicable provisions of section 3302(c)(2) of the 
Internal Revenue Code of 1954 for that taxable year was applied without 
regard to the amendment added by section 110(a) of the Emergency 
Compensation and Special Unemployment Assistance Extension Act of 1975; 
and
    (C) Determination by the Secretary that unemployment reserves and 
income from contributions in the State unemployment fund will be 
adequate to meet benefit payment obligations without title XII advances 
during the 6-month period beginning November 1 of the year in which such 
determination is made.
    (3)(i) An application for deferral under this paragraph (f) must be 
requested and filed with the Secretary of Labor by the Governor of a 
State no later than July 1 of the taxable year for which such deferral 
is requested. Such application shall be in such form, and shall be 
accompanied by such documentation, as the Secretary of Labor shall 
prescribe.
    (ii) A finding by the Secretary of Labor with respect to a State 
shall be made as of November 10 of the taxable year with respect to 
which the finding

[[Page 19]]

is made, and such finding shall be published in the Federal Register 
together with the reasons for the finding.

[30 FR 6942, May 22, 1965, as amended at 43 FR 13828, Mar. 31, 1978]



                  Subpart B_Grants, Advances and Audits



Sec. 601.6  Grants for administration of unemployment insurance and 
employment service.

    Grants of funds for administration of State unemployment insurance 
and public employment service programs are made to States under section 
302(a) of the Social Security Act, the Wagner-Peyser Act, and the 
Appropriation Acts.
    (a) Requests for funds. The forms and instructions used by State 
agencies in requesting funds are available upon request from the 
Employment and Training Administration, Department of Labor, Washington, 
DC 20210, and at the regional offices. The forms and instructions call 
for detailed information for each budgetary period concerning the 
specific amounts requested for personal services and other current 
expenses of State agencies, supported by workload and unit-cost 
estimates. Supplementary budget requests are processed in the same 
manner as regular requests. The Administration's representatives in the 
regional offices furnish assistance to the State agencies in preparing 
requests for funds.
    (b) Processing of requests. State agencies send their requests for 
funds to the RAETA who reviews the requests and forwards them to the ETA 
National Office with his recommendation as to the amounts necessary for 
proper and efficient administration of the State unemployment 
compensation law and employment service program.

The ETA National Office appraises the requests and the recommendations 
of the regional representatives from a nationwide point of view, 
examining each State's request in the light of the experience of other 
States to insure equitable treatment among the States in the allocation 
of funds made available by Congress for the administration of State 
unemployment compensation laws and public employment service programs.
    (c) Action by ETA National Office. If the ETA National Office 
approves the State's budget request, the State agency is notified; and, 
provided the conditions precedent to grants continue during the 
budgetary period, certifications for payment, under the approved budget, 
stating the amounts, are made by the ETA National Office to the 
Secretary of the Treasury quarterly. Upon denial of a request, in whole 
or in part, the State agency is notified and the RAETA is instructed to 
negotiate with the State with a view to removing the basis for denial.

(Approved by the Office of Management and Budget under control number 
1205-0132)

[15 FR 5886, Aug. 31, 1950, as amended at 42 FR 4724, Jan. 25, 1977; 49 
FR 18295, Apr. 30, 1984]



Sec. 601.7  [Reserved]



Sec. 601.8  Agreement with Postmaster General.

    The Secretary of Labor and the Postmaster General have been directed 
by the Congress (title II of the Labor-Federal Security Agency 
Appropriation Act, 1950) to prescribe a mutually satisfactory procedure 
whereby official State employment security postal matter will be handled 
without the prepayment of postage. In lieu of such prepayments, the 
Secretary periodically certifies to the Secretary of the Treasury for 
payment to the U.S. Postal Service the amount necessary to cover the 
cost of State agency mailings. The amount of payment is based on a 
formula agreed upon by the Secretary of Labor and the U.S. Postal 
Service.

[15 FR 5886, Aug. 31, 1950, as amended at 42 FR 4724, Jan. 25, 1977]



Sec. 601.9  Audits.

    The Department of Labor's audit regulations at 41 CFR 29-70.207-2(h) 
and (i), 41 CFR 29-70.207-3, and 41 CFR 29-70.207-4 shall apply with 
respect to employment service and unemployment insurance programs.

[46 FR 7766, Jan. 23, 1981]

[[Page 20]]



PART 602_QUALITY CONTROL IN THE FEDERAL-STATE UNEMPLOYMENT INSURANCE 
SYSTEM--Table of Contents




                      Subpart A_General Provisions

Sec.
602.1 Purpose.
602.2 Scope.

                     Subpart B_Federal Requirements

602.10 Federal law requirements.
602.11 Secretary's interpretation.

                    Subpart C_State Responsibilities

602.20 Organization.
602.21 Standard methods and procedures.
602.22 Exceptions.

                   Subpart D_Federal Responsibilities

602.30 Management.
602.31 Oversight.

               Subpart E_Quality Control Grants to States

602.40 Funding.
602.41 Proper expenditure of Quality Control granted funds.
602.42 Effect of failure to implement Quality Control program.
602.43 No incentives or sanctions based on specific error rates.

Appendix A to Part 602--Standard For Claim Determinations--Separation 
          Information

    Authority: 42 U.S.C. 1302.

    Source: 52 FR 33528, Sept. 3, 1987, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 602.1  Purpose.

    The purpose of this part is to prescribe a Quality Control (QC) 
program for the Federal-State unemployment insurance (UI) system, which 
is applicable to the State UI programs and the Federal unemployment 
benefit and allowance programs administered by the State Employment 
Security Agencies (SESA) under agreements between the States and the 
Secretary of Labor (Secretary). QC will be a major tool to assess the 
timeliness and accuracy of State administration of the UI program. It is 
designed to identify errors in claims processes and revenue collections 
(including payments in lieu of contributions and Extended Unemployment 
Compensation Account collections), analyze causes, and support the 
initiation of corrective action.



Sec. 602.2  Scope.

    This part applies to all State laws approved by the Secretary under 
the Federal Unemployment Tax Act (section 3304 of the Internal Revenue 
Code of 1954, 26 U.S.C. section 3304), to the administration of the 
State laws, and to any Federal unemployment benefit and allowance 
program administered by the SESAs under agreements between the States 
and the Secretary. QC is a requirement for all States, initially being 
applicable to the largest permanently authorized programs (regular UI 
including Combined-Wage-Claims) and federally-funded programs 
(Unemployment Compensation for Ex-Servicemen and Unemployment 
Compensation for Federal Employees). Other elements of the QC program 
(e.g., interstate, extended benefit programs, benefit denials, and 
revenue collections) will be phased in under a schedule determined by 
the Department in consultation with State agencies.



                     Subpart B_Federal Requirements



Sec. 602.10  Federal law requirements.

    (a) Section 303(a)(1) of the Social Security Act (SSA), 42 U.S.C. 
503(a)(1), requires that a State law include provision for:

    Such methods of administration . . . as are found by the Secretary 
of Labor to be reasonably calculated to insure full payment of 
unemployment compensation when due.

    (b) Section 303(a)(6), SSA, 42 U.S.C. 505(a)(6), requires that a 
State law include provision for:

    The making of such reports, in such form and containing such 
information, as the Secretary of Labor may from time to time require, 
and compliance with such provisions as the Secretary of Labor may from 
time to time find necessary to assure the correctness and verification 
of such reports.

    (c) Section 303(b), SSA, 42 U.S.C. 503(b), provides in part that:


[[Page 21]]


    Whenever the Secretary of Labor, after reasonable notice and 
opportunity for hearing to the State agency charged with the 
administration of the State law, finds that in the administration of the 
law there is--

                                * * * * *

    (2) a failure to comply substantially with any provision specified 
in subsection (a);

the Secretary of Labor shall notify such State agency that further 
payments will not be made to the State until the Secretary of Labor is 
satisfied that there is no longer any such denial or failure to comply. 
Until he is so satisfied, he shall make no further certification to the 
Secretary of the Treasury with respect to such State . . . .

    (d) Certification of payment of granted funds to a State is withheld 
only when the Secretary finds, after reasonable notice and opportunity 
for hearing to the State agency--
    (1) That any provision required by section 303(a) of the Social 
Security Act is no longer included in the State unemployment 
compensation law, or
    (2) That in the administration of the State unemployment 
compensation law there has been a failure to comply substantially with 
any required provision of such law.



Sec. 602.11  Secretary's interpretation.

    (a) The Secretary interprets section 303(a)(1), SSA, to require that 
a State law provide for such methods of administration as will 
reasonably ensure the prompt and full payment of unemployment benefits 
to eligible claimants, and collection and handling of income for the 
State unemployment fund (particularly taxes and reimbursements), with 
the greatest accuracy feasible.
    (b) The Secretary interprets sections 303(a)(1) and 303(a)(6), SSA, 
to authorize the Department of Labor to prescribe standard definitions, 
methods and procedures, and reporting requirements for the QC program 
and to ensure accuracy and verification of QC findings.
    (c) The Secretary interprets section 303(b)(2), SSA to require that, 
in the administration of a State law, there shall be substantial 
compliance with the provisions required by sections 303(a) (1) and (6). 
Further, conformity of the State law with those requirements is required 
by section 303(a) and Sec. 601.5(a) of this chapter.
    (d) To satisfy the requirements of sections 303(a) (1) and (6), a 
State law must contain a provision requiring, or which is construed to 
require, the establishment and maintenance of a QC program in accordance 
with the requirements of this part. The establishment and maintenance of 
such a QC program in accordance with this part shall not require any 
change in State law concerning authority to undertake redeterminations 
of claims or liabilities or the finality of any determination, 
redetermination or decision.



                    Subpart C_State Responsibilities



Sec. 602.20  Organization.

    Each State shall establish a QC unit independent of, and not 
accountable to, any unit performing functions subject to evaluation by 
the QC unit. The organizational location of this unit shall be 
positioned to maximize its objectivity, to facilitate its access to 
information necessary to carry out its responsibilities, and to minimize 
organizational conflict of interest.



Sec. 602.21  Standard methods and procedures.

    Each State shall:
    (a) Perform the requirements of this section in accordance with 
instructions issued by the Department, pursuant to Sec. 602.30(a) of 
this part, to ensure standardization of methods and procedures in a 
manner consistent with this part;
    (b) Select representative samples for QC study of at least a minimum 
size specified by the Department to ensure statistical validity (for 
benefit payments, a minimum of 400 cases of weeks paid per State per 
year);
    (c) Complete prompt and in-depth case investigations to determine 
the degree of accuracy and timeliness in the administration of the State 
UI law and Federal programs with respect to benefit determinations, 
benefit payments, and revenue collections; and conduct other 
measurements and studies necessary or appropriate for carrying out the 
purposes of this part; and in conducting investigations each State 
shall:

[[Page 22]]

    (1) Inform claimants in writing that the information obtained from a 
QC investigation may affect their eligibility for benefits and inform 
employers in writing that the information obtained from a QC 
investigation of revenue may affect their tax liability,
    (2) Use a questionnaire, prescribed by the Department, which is 
designed to obtain such data as the Department deems necessary for the 
operation of the QC program; require completion of the questionnaire by 
claimants in accordance with the eligibility and reporting authority 
under State law,
    (3) Collect data identified by the Department as necessary for the 
operation of the QC program; however, the collection of demographic data 
will be limited to those data which relate to an individual's 
eligibility for UI benefits and necessary to conduct proportions tests 
to validate the selection of representative samples (the demographic 
data elements necessary to conduct proportions tests are claimants' date 
of birth, sex, and ethnic classification); and
    (4) Conclude all findings of inaccuracy as detected through QC 
investigations with appropriate official actions, in accordance with the 
applicable State and Federal laws; make any determinations with respect 
to individual benefit claims in accordance with the Secretary's 
``Standard for Claim Determinations--Separation Information'' in the 
Employment Security Manual, part V, sections 6010-6015 (appendix A of 
this part);
    (d) Classify benefit case findings resulting from QC investigations 
as:
    (1) Proper payments, underpayments, or overpayments in benefit 
payment cases, or
    (2) Proper denials or underpayments in benefit denial cases;
    (e) Make and maintain records pertaining to the QC program, and make 
all such records available in a timely manner for inspection, 
examination, and audit by such Federal officials as the Secretary may 
designate or as may be required or authorized by law;
    (f) Furnish information and reports to the Department, including 
weekly transmissions of case data entered into the automated QC system 
and annual reports, without, in any manner, identifying individuals to 
whom such data pertain; and
    (g) Release the results of the QC program at the same time each 
year, providing calendar year results using a standardized format to 
present the data as prescribed by the Department; States will have the 
opportunity to release this information prior to any release by the 
Department.

(Approved by the Office of Management and Budget under Control Number 
1205-0245)



Sec. 602.22  Exceptions.

    If the Department determines that the QC program, or any constituent 
part of the QC program, is not necessary for the proper and efficient 
administration of a State law or in the Department's view is not cost 
effective, the Department shall use established procedures to advise the 
State that it is partially or totally excepted from the specified 
requirements of this part. Any determination under this section shall be 
made only after consultations with the State agency.



                   Subpart D_Federal Responsibilities



Sec. 602.30  Management.

    (a) The Department shall establish required methods and procedures 
(as specified in Sec. 602.21 of this part); and provide technical 
assistance as needed on the QC process.
    (b) The Department shall consider and explore alternatives to the 
prescribed sampling, study, recordkeeping, and reporting methodologies. 
This shall include, but not be limited to, testing the obtaining of 
information needed for QC by telephone and mail rather than in face-to-
face interviews.
    (c) The Department shall maintain a computerized data base of QC 
case data which is transmitted to the Department under Sec. 602.21, 
which will be combined with other data for statistical and other 
analysis such as assessing the impact of economic cycles, funding 
levels, and workload levels on program accuracy and timeliness.



Sec. 602.31  Oversight.

    The Department shall review QC operational procedures and samples,

[[Page 23]]

and validate QC methodology to ensure uniformity in the administration 
of the QC program and to ensure compliance with the requirements of this 
part. The Department shall, for purposes of determining eligibility for 
grants described in Sec. 602.40, annually review the adequacy of the 
administration of a State's QC program.



               Subpart E_Quality Control Grants to States



Sec. 602.40  Funding.

    (a) The Department shall use established procedures to notify States 
of the availability of funds for the operation of QC programs in 
accordance with this part.
    (b) The Department may allocate additional resources, if available, 
to States for analysis of date generated by the QC program, to increase 
the number of claims sampled in areas where more information is needed, 
for pilot studies for the purpose of expanding the QC program, and for 
corrective action.



Sec. 602.41  Proper expenditure of Quality Control granted funds.

    The Secretary may, after reasonable notice and opportunity for 
hearing to the State agency, take exception to and require repayment of 
an expenditure for the operation of a QC program if it is found by the 
Secretary that such expenditure is not necessary for the proper and 
efficient administration of the QC program in the State. See sections 
303(a)(8), 303(a)(9) and 303(b)(2), SSA, and 20 CFR 601.5. For purposes 
of this section, an expenditure will be found not necessary for proper 
and efficient administration if such expenditure fails to comply with 
the requirements of subpart C of this part.

[52 FR 33528, Sept. 3, 1987, as amended at 52 FR 34343, Sept. 10, 1987]



Sec. 602.42  Effect of failure to implement Quality Control program.

    Any State which the Secretary finds, after reasonable notice and 
opportunity for hearing, has not implemented or maintained a QC program 
in accordance with this part will not be eligible for any grants under 
title III of the Social Security Act until such time as the Secretary is 
satisfied that there is no longer any failure to conform or to comply 
substantially with any provision specified in this part. See sections 
303(a)(1), 303(a)(6), and 303(b)(2), SSA, and 20 CFR 601.5.



Sec. 602.43  No incentives or sanctions based on specific error rates.

    Neither sanctions nor funding incentives shall be used by the 
Department to influence the achievement of specified error rates in 
State UI programs.

 Appendix A to Part 602--Standard for Claim Determinations--Separation 
                               Information

         Employment Security Manual (Part V, Sections 6010-6015)

    6010 Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for:
    ``Such methods of administration . . . as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 303(a)(3) of the Social Security Act requires that a State 
law include provision for:
    ``Opportunity for a fair hearing before an impartial tribunal, for 
all individuals whose claims for unemployment compensation are denied.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation. . . .''
    Section 3306(h) of the Federal Unemployment Tax Act defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''
    6011 Secretary's Interpretation of Federal Law Requirements. The 
Secretary interprets the above sections to require that a State law 
include provisions which will insure that:
    A. Individuals who may be entitled to unemployment compensation are 
furnished such information as will reasonably afford them an opportunity 
to know, establish, and protect their rights under the unemployment 
compensation law of such State, and
    B. The State agency obtains and records in time for the prompt 
determination and review of benefit claims such information as will 
reasonably insure the payment of benefits to individuals to whom 
benefits are due.
    6012 Criteria for Review of State Law Conformity with Federal 
Requirements:

[[Page 24]]

    In determining the conformity of a State law with the above 
requirements of the Federal Unemployment Tax Act and the Social Security 
Act as interpreted by the Secretary, the following criteria will be 
applied:
    A. Is it required that individuals who may be entitled to 
unemployment compensation be furnished such information of their 
potential rights to benefits, including the manner and places of filing 
claims, the reasons for determinations, and their rights of appeal, as 
will insure them a reasonable opportunity to know, establish, and 
protect their rights under the law of the State?
    B. Is the State agency required to obtain, in time for prompt 
determination of rights to benefits such information as will reasonably 
insure the payment of benefits to individuals to whom benefits are due?
    C. Is the State agency required to keep records of the facts 
considered in reaching determinations of rights to benefits?
    6013 Claim Determinations Requirements Designed To Meet Department 
of Labor Criteria:
    A. Investigation of claims. The State agency is required to obtain 
promptly and prior to a determination of an individual's right to 
benefits, such facts pertaining thereto as will be sufficient reasonably 
to insure the payment of benefits when due.
    This requirement embraces five separate elements:
    1. It is the responsibility of the agency to take the initiative in 
the discovery of information. This responsibility may not be passed on 
to the claimant or the employer. In addition to the agency's own 
records, this information may be obtained from the worker, the employer, 
or other sources. If the information obtained in the first instance 
discloses no essential disagreement and provides a sufficient basis for 
a fair determination, no further investigation is necessary. If the 
information obtained from other sources differs essentially from that 
furnished by the claimant, the agency, in order to meet its 
responsibility, is required to inform the claimant of such information 
from other sources and to afford the claimant an opportunity to furnish 
any further facts he may have.
    2. Evidentiary facts must be obtained as distinguished from ultimate 
facts or conclusions. That a worker was discharged for misconduct is an 
ultimate fact or conclusion; that he destroyed a machine upon which he 
was working is a primary or evidentiary fact, and the sort of fact that 
the requirement refers to.
    3. The information obtained must be sufficient reasonably to insure 
the payment of benefits when due. In general, the investigation made by 
the agency must be complete enough to provide information upon which the 
agency may act with reasonable assurance that its decision is consistent 
with the unemployment compensation law. On the other hand, the 
investigation should not be so exhaustive and time-consuming as unduly 
to delay the payment of benefits and to result in excessive costs.
    4. Information must be obtained promptly so that the payment of 
benefits is not unduly delayed.
    5. If the State agency requires any particular evidence from the 
worker, it must give him a reasonable opportunity to obtain such 
evidence.
    B. Recording of facts. The agency must keep a written record of the 
facts considered in reaching its determinations.
    C. Determination notices.
    1. The agency must give each claimant a written notice of:
    a. Any monetary determination with respect to his benefit year;
    b. Any determination with respect to purging a disqualification if, 
under the State law, a condition or qualification must be satisfied with 
respect to each week of disqualification; but in lieu of giving written 
notice of each determination for each week in which it is determined 
that the claimant has met the requirements for purging, the agency may 
inform the claimant that he has purged the disqualification for a week 
by notation of his applicant identification card or otherwise in 
writing.
    c. Any other determination which adversely affects \1\ his rights to 
benefits, except that written notice of determination need not be given 
with respect to:
---------------------------------------------------------------------------

    \1\ A determination ``adversely affects'' claimant's right to 
benefits if it (1) results in a denial to him of benefits (including a 
cancellation of benefits or wage credits or any reduction in whole or in 
part below the weekly or maximum amount established by his monetary 
determination) for any week or other period; or (2) denies credit for a 
waiting week; or (3) applies any disqualification or penalty; or (4) 
determines that he has not satisfied a condition of eligibility, 
requalification for benefits, or purging a disqualification; or (5) 
determines that an overpayment has been made or orders repayment or 
recoupment of any sum paid to him; or (6) applies a previously 
determined overpayment, penalty, or order for repayment or recoupment; 
or (7) in any other way denies claimant a right to benefits under the 
State law.
---------------------------------------------------------------------------

    (1) A week in a benefit year for which the claimant's weekly benefit 
amount is reduced in whole or in part by earnings if, the first time in 
the benefit year that there is such a reduction, he is required to be 
furnished a booklet or leaflet containing the information set forth 
below in paragraph 2f(1). However, a written notice of determination is 
required if: (a) there is a dispute concerning the reduction with 
respect to any week (e.g.,

[[Page 25]]

as to the amount computed as the appropriate reduction, etc.); or (b) 
there is a change in the State law (or in the application thereof) 
affecting the reduction; or
    (2) Any week in a benefit year subsequent to the first week in such 
benefit year in which benefits were denied, or reduced in whole or in 
part for reasons other than earnings, if denial or reduction for such 
subsequent week is based on the same reason and the same facts as for 
the first week, and if written notice of determination is required to be 
given to the claimant with respect to such first week, and with such 
notice of determination, he is required to be given a booklet or 
pamphlet containing the information set forth below in paragraphs 2f(2) 
and 2h. However, a written notice of determination is required if: (a) 
there is a dispute concerning the denial or reduction of benefits with 
respect to such week; or (b) there is a change in the State law (or in 
the application thereof) affecting the denial or reduction; or (c) there 
is a change in the amount of the reduction except as to the balance 
covered by the last reduction in a series of reductions.
    Note: This procedure may be applied to determinations made with 
respect to any subsequent weeks for the same reason and on the basis of 
the same facts: (a) that claimant is unable to work, unavailable for 
work, or is disqualified under the labor dispute provision; and (b) 
reducing claimant's weekly benefit amount because of income other than 
earnings or offset by reason of overpayment.
    2. The agency must include in written notices of determinations 
furnished to claimants sufficient information to enable them to 
understand the determinations, the reasons therefor, and their rights to 
protest, request reconsideration, or appeal.
    The written notice of monetary determination must contain the 
information specified in the following items (except h) unless an item 
is specifically not applicable. A written notice of any other 
determination must contain the information specified in as many of the 
following items as are necessary to enable the claimant to understand 
the determination and to inform him of his appeal rights. Information 
specifically applicable to the individual claimant must be contained in 
the written notice of determination. Information of general application 
such as (but not limited to) the explanation of benefits for partial 
unemployment, information as to deductions, seasonality factors, and 
information as to the manner and place of taking an appeal, extension of 
the appeal period, and where to obtain information and assistance may be 
contained in a booklet or leaflet which is given the claimant with his 
monetary determination.
    a. Base period wages. The statement concerning base-period wages 
must be in sufficient detail to show the basis of computation of 
eligibility and weekly and maximum benefit amounts. (If maximum benefits 
are allowed, it may not be necessary to show details of earnings.)
    b. Employer name. The name of the employer who reported the wages is 
necessary so that the worker may check the wage transcript and know 
whether it is correct. If the worker is given only the employer number, 
he may not be able to check the accuracy of the wage transcript.
    c. Explanation of benefit formula--weekly and maximum benefit 
amounts. Sufficient information must be given the worker so that he will 
understand how his weekly benefit amount, including allowances for 
dependents, and his maximum benefit amount were figured. If benefits are 
computed by means of a table contained in the law, the table must be 
furnished with the notice of determination whether benefits are granted 
or denied.
    The written notice of determination must show clearly the weekly 
benefit amount and the maximum potential benefits to which the claimant 
is entitled.
    The notice to a claimant found ineligible by reason of insufficient 
earnings in the base period must inform him clearly of the reason for 
ineligibility. An explanation of the benefit formula contained in a 
booklet or pamphlet should be given to each claimant at or prior to the 
time he receives written notice of a monetary determination.
    d. Benefit year. An explanation of what is meant by the benefit year 
and identification of the claimant's benefit year must be included in 
the notice of determination.
    e. Information as to benefits for partial unemployment. There must 
be included either in the written notice of determination or in a 
booklet or pamphlet accompanying the notice an explanation of the 
claimant's rights to partial benefits for any week with respect to which 
he is working less than his normal customary full-time workweek because 
of lack of work and for which he earns less than his weekly benefit 
amount or weekly benefit amount plus earnings, whichever is provided by 
the State law. If the explanation is contained in the notice of 
determination, reference to the item in the notice in which his weekly 
benefit amount is entered should be made.
    f. Deductions from weekly benefits.
    (1) Earnings. Although written notice of determinations deducting 
earnings from a claimant's weekly benefit amount is generally not 
required (see paragraph 1 c (1) above), where written notice of 
determination is required (or given) it shall set forth the amount of 
earnings, the method of computing the deduction in sufficient detail to 
enable the claimant to verify the accuracy of the deduction, and his 
right to protest, request redetermination, and appeal. Where a written 
notice of determination is given to the claimant because there has been 
a

[[Page 26]]

change in the State law or in the application of the law, an explanation 
of the change shall be included.
    Where claimant is not required to receive a written notice of 
determination, he must be given a booklet or pamphlet the first time in 
his benefit year that there is a deduction for earnings which shall 
include the following information:
    (a) The method of computing deductions for earnings in sufficient 
detail to enable the claimant to verify the accuracy of the deduction;
    (b) That he will not automatically be given a written notice of 
determination for a week with respect to which there is a deduction for 
earnings (unless there is a dispute concerning the reduction with 
respect to a week or there has been a change in the State law or in the 
application of the law affecting the deduction) but that he may obtain 
such a written notice upon request; and
    (c) A clear statement of his right to protest, request a 
redetermination, and appeal from any determination deducting earnings 
from his weekly benefit amount even though he does not automatically 
receive a written notice of determination; and if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    (2) Other deductions.
    (a) A written notice of determination is required with respect to 
the first week in claimant's benefit year in which there is a reduction 
from his benefits for a reason other than earnings. This notice must 
describe the deduction made from claimant's weekly benefit amount, the 
reason for the deduction, the method of computing it in sufficient 
detail to enable him to verify the accuracy of such deduction, and his 
right to protest, request redetermination, or appeal.
    (b) A written notice of determination is not required for subsequent 
weeks that a deduction is made for the same reason and on the basis of 
the same facts, if the notice of determination pursuant to (2)(a), or a 
booklet or pamphlet given him with such notice explains (i) the several 
kinds of deductions which may be made under the State law (e.g., 
retirement pensions, vacation pay, and overpayments); (ii) the method of 
computing each kind of deduction in sufficient detail that claimant will 
be able to verify the accuracy of deductions made from his weekly 
benefit payments; (iii) any limitation on the amount of any deduction or 
the time in which any deduction may be made; (iv) that he will not 
automatically be given a written notice of determination for subsequent 
weeks with respect to which there is a deduction for the same reason and 
on the basis of the same facts, but that he may obtain a written notice 
of determination upon request; (v) his right to protest, request 
redetermination, or appeal with respect to subsequent weeks for which 
there is a reduction from his benefits for the same reason, and on the 
basis of the same facts even though he does not automatically receive a 
written notice of determination; and (vi) that if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    g. Seasonality factors. If the individual's determination is 
affected by seasonality factors under the State law, an adequate 
explanation must be made. General explanation of seasonality factors 
which may affect determinations for subsequent weeks may be included in 
a booklet or pamphlet given claimant with his notice of monetary 
determination.
    h. Disqualification or ineligibility. If a disqualification is 
imposed, or if the claimant is declared ineligible for one or more 
weeks, he must be given not only a statement of the period of 
disqualification or ineligibility and the amount of wage-credit 
reductions, if any, but also an explanation of the reason for the 
ineligibility or disqualification. This explanation must be sufficiently 
detailed so that he will understand why he is ineligible or why he has 
been disqualified, and what he must do in order to requalify for 
benefits or purge the disqualification. The statement must be 
individualized to indicate the facts upon which the determination was 
based, e.g., state, ``It is found that you left your work with Blank 
Company because you were tired of working; the separation was voluntary, 
and the reason does not constitute good cause,'' rather than merely the 
phrase ``voluntary quit.'' Checking a box as to the reason for the 
disqualification is not a sufficiently detailed explanation. However, 
this statement of the reason for the disqualification need not be a 
restatement of all facts considered in arriving at the determination.
    i. Appeal rights. The claimant must be given information with 
respect to his appeal rights.
    (1) The following information shall be included in the notice of 
determination:
    (a) A statement that he may appeal or, if the State law requires or 
permits a protest or redetermination before an appeal, that he may 
protest or request a redetermination.
    (b) The period within which an appeal, protest, or request for 
redetermination must be filed. The number of days provided by statute 
must be shown as well as either the beginning date or ending date of the 
period. (It is recommended that the ending date of the appeal period be 
shown, as this is the more understandable of the alternatives.)

[[Page 27]]

    (2) The following information must be included either in the notice 
of determination or in separate informational material referred to in 
the notice:
    (a) The manner in which the appeal, protest, or request for 
redetermination must be filed, e.g., by signed letter, written 
statement, or on a prescribed form, and the place or places to which the 
appeal, protest, or request for redetermination may be mailed or hand-
delivered.
    (b) An explanation of any circumstances (such as nonworkdays, good 
cause, etc.) which will extend the period for the appeal, protest, or 
request for redetermination beyond the date stated or identified in the 
notice of determination.
    (c) That any further information claimant may need or desire can be 
obtained together with assistance in filing his appeal, protest, or 
request for redetermination from the local office.
    If the information is given in separate material, the notice of 
determination would adequately refer to such material if it said, for 
example, ``For other information about your (appeal), (protest), 
(redetermination) rights, see pages ---- to ---- of the ------ (name of 
pamphlet or booklet) heretofore furnished to you.''
    6014 Separation Information Requirements Designed To Meet Department 
of Labor Criteria:
    A. Information to agency. Where workers are separated, employers are 
required to furnish the agency promptly, either upon agency request or 
upon such separation, a notice describing the reasons for and the 
circumstances of the separation and any additional information which 
might affect a claimant's right to benefits. Where workers are working 
less than full time, employers are required to furnish the agency 
promptly, upon agency request, information concerning a claimant's hours 
of work and his wages during the claim periods involved, and other facts 
which might affect a claimant's eligibility for benefits during such 
periods.
    When workers are separated and the notices are obtained on a request 
basis, or when workers are working less than full time and the agency 
requests information, it is essential to the prompt processing of claims 
that the request be sent out promptly after the claim is filed and the 
employer be given a specific period within which to return the notice, 
preferably within 2 working days.
    When workers are separated and notices are obtained upon separation, 
it is essential that the employer be required to send the notice to the 
agency with sufficient promptness to insure that, if a claim is filed, 
it may be processed promptly. Normally, it is desirable that such a 
notice be sent to the central office of the agency, since the employer 
may not know in which local office the workers will file his claim. The 
usual procedure is for the employer to give the worker a copy of the 
notice sent by the employer to the agency.
    B. Information to worker.
    1. Information required to be given. Employers are required to give 
their employees information and instructions concerning the employees' 
potential rights to benefits and concerning registration for work and 
filing claims for benefits.
    The information furnished to employees under such a requirement need 
not be elaborate; it need only be adequate to insure that the worker who 
is separated or who is working less than full time knows he is 
potentially eligible for benefits and is informed as to what he is to do 
or where he is to go to file his claim and register for work. When he 
files his claim, he can obtain more detailed information.
    In States that do not require employers to furnish periodically to 
the State agency detailed reports of the wages paid to their employees, 
each employer is required to furnish to his employees information as to 
(a) the name under which he is registered by the State agency, (b) the 
address where he maintains his payroll records, and (c) the workers' 
need for this information if and when they file claims for benefits.
    2. Methods for giving information. The information and instructions 
required above may be given in any of the following ways:
    a. Posters prominently displayed in the employer's establishment. 
The State agency should supply employers with a sufficient number of 
posters for distribution throughout their places of business and should 
see that the posters are conspicuously displayed at all times.
    b. Leaflets. Leaflets distributed either periodically or at the time 
of separation or reduction of hours. The State agency should supply 
employers with a sufficient number of leaflets.
    c. Individual notices. Individual notices given to each employee at 
the time of separation or reduction in hours.
    It is recommended that the State agency's publicity program be used 
to supplement the employer-information requirements. Such a program 
should stress the availability and location of claim-filing offices and 
the importance of visiting those offices whenever the worker is 
unemployed, wishes to apply for benefits, and to seek a job.
    6015 Evaluation of Alternative State Provisions with Respect to 
Claim Determinations and Separation Information. If the State law 
provisions do not conform to the suggested requirements set forth in 
sections 6013 and 6014, but the State law contains alternative 
provisions, the Bureau of Employment Security, in collaboration with the 
State agency, will study the actual or anticipated effects of

[[Page 28]]

the alternative provisions. If the Administrator of the Bureau concludes 
that the alternative provisions satisfy the criteria in section 6012, he 
will so notify the State agency. If the Administrator of the Bureau does 
not so conclude, he will submit the matter to the Secretary. If the 
Secretary concludes that the alternative provisions satisfy the criteria 
in section 6012, the State agency will be so notified. If the Secretary 
concludes that there is a question as to whether the alternative 
provisions satisfy the criteria, the State agency will be advised that 
unless the State law provisions are appropriately revised, a notice of 
hearing will be issued as required by the Code of Federal Regulations, 
title 20, section 601.5.



PART 603_INCOME AND ELIGIBILITY VERIFICATION SYSTEM--Table of Contents




Sec.
603.1 Purpose.

          Subpart A_Income and Eligibility Verification System

603.2 Definitions.
603.3 Eligibility condition for claimants.
603.4 Notification to claimants.
603.5 Disclosure of information.
603.6 Agreement between State unemployment compensation agency and 
          requesting agency.
603.7 Protection of confidentiality.
603.8 Obtaining information from other agencies and crossmatching with 
          wage information.
603.9 Effective date of rule.

                   Subpart B_Quarterly Wage Reporting

603.20 Effective date of rule.
603.21 Alternative system.

    Authority: Sec. 1102, Social Security Act, ch. 531, 49 Stat. 647, as 
amended (42 U.S.C 1302); Reorganization Plan No. 2 of 1949, 63 Stat. 
1065, 14 FR 5225.

    Source: 51 FR 7207, Feb. 28, 1986, unless otherwise noted.



Sec. 603.1  Purpose.

    (a) Section 2651 of Public Law 98-369 (the Deficit Reduction Act of 
1984) amended title XI of the Social Security Act to include a 
requirement that States have an income and eligibility verification 
system in effect which would be used in verifying eligibility for, and 
the amount of, benefits available under several Federally assisted 
programs including the Federal-State unemployment compensation program. 
The Act requires that employers in each State make quarterly wage 
reports to a State agency, which may be the State unemployment 
compensation agency, and that wage information and benefit information 
obtained from other agencies be used in verifying eligibility for 
benefits. The requirement of quarterly wage reporting may be waived if 
the Secretary of Labor (in consultation with the Secretary of Health and 
Human Services and the Secretary of Agriculture) determines the State 
has in effect an alternative system which is as effective and timely as 
quarterly wage reporting for the purposes of providing employment 
related income and eligibility data.
    (b) Section 2651(d) of Public Law 98-396 added a new section 303(f) 
of the Social Security Act (42 U.S.C. 503(f)), to provide that the 
agency charged with the administration of the State unemployment 
compensation law shall provide that information shall be requested and 
exchanged for purposes of income and eligibility verification in 
accordance with a State system which meets the requirements of section 
1137 of the Social Security Act, as added by Public Law 98-369. The 
regulations in this part are issued to implement this requirement.



          Subpart A_Income and Eligibility Verification System



Sec. 603.2  Definitions.

    For the purposes of this part:
    (a) State unemployment compensation agency means the agency charged 
with the administration of the unemployment compensation law approved by 
the Secretary of Labor under section 3304 of the Internal Revenue Code 
of 1954 (26 U.S.C. 3304).
    (b) Wage information means information about wages as defined in the 
State's unemployment compensation law and includes the Social Security 
Number (or numbers, if more than one) and quarterly wages of an 
employee, and the name, address, State, and (when known) Federal 
employer identification number of an employer reporting wages under a 
State unemployment compensation law, except that in a State in which 
wages are not required

[[Page 29]]

to be reported under the unemployment compensation law, ``wage 
information'' means:
    (1) That wage information which is reported under provisions of 
State law which fulfill the requirements of section 1137 of the Social 
Security Act; or
    (2) That information which is obtained through an alternative system 
which fulfills the requirements of section 1137 of the Social Security 
Act.
    (c) Claim information means information regarding:
    (1) Whether an individual is receiving, has received or has applied 
for unemployment compensation;
    (2) The amount of compensation the individual is receiving or is 
entitled to receive;
    (3) The individual's current (or most recent) home address; and
    (4) Whether the individual has refused an offer of work and, if so, 
a description of the job offered including the terms, conditions, and 
rate of pay.
    (5) Any other information contained in the records of the State 
unemployment compensation agency which is needed by the requesting 
agency to verify eligiblity for, and the amount of, benefits.
    (d) Requesting agency means:
    (1) Any State or local agency charged with the responsibility of 
enforcing the provisions of the Aid to Families with Dependent Children 
program under a State plan approved under part A of title IV of the 
Social Security Act;
    (2) Any State or local agency charged with the responsibility of 
enforcing the provisions of the Medicaid program under a State plan 
approved under title XIX of the Social Security Act;
    (3) Any State or local agency charged with the responsibility of 
enforcing the provisions of the Food Stamp program under the Food Stamp 
Act of 1977;
    (4) Any State or local agency charged with the responsibility of 
enforcing a program under a plan approved under title I, X, XIV, or XVI 
of the Social Security Act;
    (5) Any State or local child support enforcement agency charged with 
the responsibility of enforcing child support obligations under a plan 
approved under part D of title IV of the Social Security Act; and
    (6) The Secretary of Health and Human Services in establishing or 
verifying eligibility or benefit amounts under titles II and XVI of the 
Social Security Act (section 1137(a)).



Sec. 603.3  Eligibility condition for claimants.

    (a) The State unemployment compensation agency shall require, as a 
condition of eligibility for unemployment benefits, that each claimant 
for benefits furnish to the agency his/her social security number (or 
numbers if he/she has more than one such number), and the agency shall 
utilize such numbers in the administration of the unemployment 
compensation program so as to associate the agency's records pertaining 
to each claimant with the claimant's social security number(s).
    (b) If the State agency determines that a claimant has refused or 
failed to provide a Social Security Number, then that individual shall 
be ineligible to participate in the unemployment compensation program.
    (c) Any claimant held ineligible for not supplying a social security 
number may become eligible upon providing the State agency with such 
number retroactive to the extent permitted under State law. (Section 
1137(a)(1)).



Sec. 603.4  Notification to claimants.

    Claimants shall be notified at the time of filing an initial claim 
for benefits through a written statement on or provided with the initial 
claim form and periodically thereafter that information available 
through the income and eligibility verification system will be requested 
and utilized by requesting agencies as defined in Sec. 603.2(d) 
(section 1137(a)(6)). Provisions of a printed notice on or attached to 
any subsequent additional claims will satisfy the requirement for 
periodic notice thereafter.



Sec. 603.5  Disclosure of information.

    The State unemployment compensation agency will disclose to 
authorized requesting agencies, as defined in Sec. 603.2(d), which have 
entered into an agreement in accordance with this part, wage and claim 
information as defined herein contained in the records of such State 
agency as is deemed by

[[Page 30]]

the requesting agency to be needed in verifying eligibility for, and the 
amount of, benefits. Standardized formats established by the Secretary 
of Health and Human Services (in consultation with the Secretary of 
Agriculture) will be adhered to by the State unemployment compensation 
agency. (Section 1137(a)(4)).



Sec. 603.6  Agreement between State unemployment compensation agency 
and requesting agency.

    (a) The State unemployment compensation agency will enter into 
specific written agreements with any requesting agency as defined in 
this part.
    (b) The agreements will include, but need not be limited, to the 
following:
    (1) The purposes for which requests will be made and the specific 
information needed;
    (2) Identification of all agency officials, by position, with 
authority to request information;
    (3) Methods and timing of the requests for information, including 
the format to be used, and the period of time needed to furnish the 
requested information;
    (4) Basis for establishing the reporting periods for which 
information will be provided;
    (5) Provisions for determining appropriate reimbursement from the 
requesting agency for the costs incurred in providing data, including 
any new developmental costs associated with furnishing data to the 
requesting agency and calculated in accordance with the provisions of 
OMB Circular A-87;
    (6) Safeguards to ensure that information obtained from the State 
unemployment compensation agency will be protected against unauthorized 
access or disclosure. At a minimum, such procedures will comply with the 
requirements of Sec. 603.7.
    (c) The requirements in paragraphs (a) and (b) of this section shall 
also apply to requesting agencies receiving information from a State 
unemployment compensation agency in another State and shall be 
administered by the State unemployment compensation agency disclosing 
the information (section 1137(a)(4) and (a)(7)).



Sec. 603.7  Protection of confidentiality.

    (a) State unemployment compensation agencies shall require 
requesting agencies receiving information under this part to comply with 
the following measures to protect the confidentiality of the information 
against unauthorized access or disclosure:
    (1) The information shall be used only to the extent necessary to 
assist in the valid administrative needs of the program receiving such 
information and shall be disclosed only for these purposes as defined in 
this agreement;
    (2) The requesting agency shall not use the information for any 
purposes not specifically authorized under an agreement that meets the 
requirements of Sec. 603.6;
    (3) The information shall be stored in a place physically secure 
from access by unauthorized persons;
    (4) Information in electronic format, such as magnetic tapes or 
discs, shall be stored and processed in such a way that unauthorized 
persons cannot retrieve the information by means of computer, remote 
terminal or other means;
    (5) Precautions shall be taken to ensure that only authorized 
personnel are given access to on-line files;
    (6)(i) The requesting agency shall instruct all personnel with 
access to the information regarding the confidential nature of the 
information, the requirements of this part, and the sanctions specified 
in State unemployment compensation laws against unauthorized disclosure 
of information covered by this part, and any other relevant State 
statutes, and
    (ii) The head of each State agency shall sign an acknowledgment on 
behalf of the entire agency attesting to the agency's policies and 
procedures regarding confidentiality.
    (b) Any requesting agency is authorized to redisclose the 
information only as follows:
    (1) Any wage or claim information may be given to the individual who 
is the subject of the information;
    (2) Information about an individual may be given to an attorney or 
other duly authorized agent representing the individual if the 
individual has given written consent and the information is needed in 
connection with a claim for

[[Page 31]]

benefits against the requesting agency; and
    (3) Any wage or claim information may be given to another requesting 
agency as defined in this part or to any criminal or civil prosecuting 
authorities acting for or on behalf of the requesting agency if 
provision for such redisclosure is contained in the agreement between 
the requesting agency and the State unemployment compensation agency.
    (c) The requesting agency shall permit the State unemployment 
compensation agency to make onsite inspections to ensure that the 
requirements of State unemployment compensation laws and Federal 
statutes and regulations are being met (section 1137(a)(5)(B).



Sec. 603.8  Obtaining information from other agencies and crossmatching 
with wage information.

    (a) The State unemployment compensation agency shall obtain such 
information from the Social Security administration and any requesting 
agency as may be needed in verifying eligibility for, and the amount of, 
benefits.
    (b) To the extent that such information shall be determined likely 
to be productive in identifying ineligibility for benefits and 
preventing incorrect payments, the State unemployment compensation 
agency shall crossmatch quarterly wage information with unemployment 
benefit payment information (section 1137(a)(2)).
    (c) To the extent necessary, the United States Department of Labor 
may amplify on the requirements for state compliance with this section 
in instructions issued and published for comment in the Federal Register 
under the provisions of section 1137(a)(2) of the Social Security Act.



Sec. 603.9  Effective date of rule.

    The effective date of this subpart A rule is May 29, 1986, after 
consultation with the Secretary of Health and Human Services and the 
Secretary of Agriculture, may by waiver grant a delay in this effective 
date if the State submits within 90 days of publication of this rule in 
final form a plan describing a good faith effort to comply with the 
requirements of section 1137 (a) and (b) of the Social Security Act 
through but not beyond September 30, 1986.



                   Subpart B_Quarterly Wage Reporting



Sec. 603.20  Effective date of rule.

    The requirement that employers in a State report quarterly wage 
information to a State agency (which may be the State unemployment 
compensation agency), is effective September 30, 1988 (section 
1137(a)(3)).



Sec. 603.21  Alternative system.

    The Secretary of Labor (in consultation with the Secretary of Health 
and Human Services and the Secretary of Agriculture) may waive the 
provision that employers in a State are required to make quarterly wage 
reports to a State agency if the Secretary determines that the State has 
in effect an alternative system which is as effective and timely for 
purposes of providing employment related income and eligibility data for 
the purposes described in section 1137 of the Social Security Act. 
Criteria for such waiver and the date for submitting requests for such 
waiver will be issued, if necessary, by the United States Department of 
Labor and published for comment in the Federal Register.



PART 606_TAX CREDITS UNDER THE FEDERAL UNEMPLOYMENT TAX ACT; ADVANCES 
UNDER TITLE XII OF THE SOCIAL SECURITY ACT--Table of Contents




                            Subpart A_General

Sec.
606.1 Purpose and scope.
606.2 Total credits allowable.
606.3 Definitions.
606.4 Redelegation of authority.
606.5 Verification of estimates and review of determinations.
606.6 Information, reports, and studies.

Subpart B--Tax Credit Reduction [Reserved]

               Subpart C_Relief from Tax Credit Reduction

606.20 Cap on tax credit reduction.
606.21 Criteria for cap.
606.22 Application for cap.
606.23 Avoidance of tax credit reduction.

[[Page 32]]

606.24 Application for avoidance.
606.25 Waiver of and substitution for additional tax credit reduction.
606.26 Application for waiver and substitution.

                     Subpart D_Interest on Advances

606.30 Interest rates on advances.
606.31 Due dates for payment of interest. [Reserved]
606.32 Types of advances subject to interest.
606.33 No payment of interest from unemployment fund. [Reserved]
606.34 Reports of interest payable. [Reserved]
606.35 Order of application for repayments. [Reserved]

                 Subpart E_Relief from Interest Payment

606.40 May/September delay.
606.41 High unemployment deferral.
606.42 High unemployment delay.
606.43 Maintenance of solvency effort.
606.44 Notification of determinations.

    Authority: 42 U.S.C. 1102; 26 U.S.C. 7805(a); Secretary's Order No. 
4-75 (40 FR 18515).

    Source: 53 FR 37429, Sept. 26, 1988, unless otherwise noted.



                            Subpart A_General



Sec. 606.1  Purpose and scope.

    (a) In general. The regulations in this part 606 are issued to 
implement the tax credit provisions of the Federal Unemployment Tax Act, 
and the loan provisions of title XII of the Social Security Act. The 
regulations on tax credits cover all of the subjects of 3302 of the 
Federal Unemployment Tax Act (FUTA), except subsections (c)(3) and (e). 
The regulations on loans cover all of the subjects in title XII of the 
Social Security Act.
    (b) Scope. This part 606 covers general matters relating to this 
part in this subpart A, and in the following subparts includes specific 
subjects described in general terms as follows:
    (1) Subpart B describes the tax credit reductions under the Federal 
Unemployment Tax Act, which relate to outstanding balances of advances 
made under title XII of the Social Security Act.
    (2) Subpart C describes the various forms of relief from tax credit 
reductions, and the criteria and standards for grant of such relief in 
the form of--
    (i) A cap on tax credit reduction,
    (ii) Avoidance of tax credit reduction, and
    (iii) Waiver of and substitution for additional tax credit 
reduction.
    (3) Subpart D describes the interest rates on advances made under 
title XII of the Social Security Act, dues dates for payment of 
interest, and other related matters.
    (4) Subpart E describes the various forms of relief from payment of 
interest, and the criteria and standards for grant of such relief in the 
form of--
    (i) May/September delay of interest payments,
    (ii) High unemployment deferral of interest payments,
    (iii) High unemployment delay of interest payments, and
    (iv) Maintenance of solvency effort required to retain a deferral 
previously granted.



Sec. 606.2  Total credits allowable.

    The total credits allowed to an employer subject to the tax imposed 
by section 3301 of the Federal Unemployment Tax Act shall not exceed 5.4 
percent with respect to taxable years beginning after December 31, 1984.



Sec. 606.3  Definitions.

    For the purposes of the Acts cited and this part--
    (a) Act means as appropriate the Federal Unemployment Tax Act (26 
U.S.C. 3301-3311), or title XII of the Social Security Act (42 U.S.C. 
1321-1324).
    (b) Advance means a transfer of funds to a State unemployment fund, 
for the purpose of paying unemployment compensation, from the Federal 
unemployment account in the Unemployment Trust Fund, pursuant to section 
1202 of the Social Security Act.
    (c) Benefit-cost ratio for cap purposes for a calendar year is the 
percentage obtained by dividing--
    (1) The total dollar sum of--
    (i) All compensation actually paid under the State law during such 
calendar year, including in such total sum all regular, additional, and 
extended compensation, as defined in section 205 of the Federal-State 
Extended Unemployment Compensation Act of 1970, and excluding from such 
total sum--

[[Page 33]]

    (A) Any such compensation paid for which the State is entitled to 
reimbursement or was reimbursed under the provisions of any Federal Law, 
and
    (B) Any such compensation paid which is attributable to services 
performed for a reimbursing employer, and which is not included in the 
total dollar amount reported under paragraph (c)(1)(i)(A) of this 
section, and
    (ii) Any interest paid during such calendar year on any advance, by
    (2) The total wages (as defined in Sec. 606-3(l)) with respect to 
such calendard year. If any percentage determined by this computation 
for a calendar year is not a multiple of 0.1 percent, such percentage 
shall be reduced to the nearest multiple of 0.1 percent.
    (d) Contributions means payments required by a State law to be made 
into an unemployment fund by any person on account of having individuals 
in his employ, to the extent that such payments are made by him without 
being deducted or deductible from the remuneration of individuals in his 
employ.
    (e) Federal unemployment tax means the excise tax imposed under 
section 3301 of the Federal Unemployment Tax Act on employers with 
respect to having individuals in their employ.
    (f) Fiscal year means the Federal fiscal year which begins on 
October 1 of a year and ends on September 30, of the next succeeding 
year.
    (g) FUTA referes to the Federal Unemployment Tax Act.
    (h) State unemployment fund or unemployment fund means a special 
fund established under a State law for the payment of unemployment 
compensation to unemployed individuals, and which is an ``unemployment 
fund'' as defined in section 3306(f) of the Federal Unemployment Tax 
Act.
    (i) Taxable year means the calendar year.
    (j) Unemployment tax rate means, for any taxable year and with 
respect to any State, the percentage obtained by dividing the total 
amount of contributions paid into the State unemployment fund with 
respect to such taxable year by total wages as defined in Sec. 
606.3(l).
    (k) Wages, taxable means the total sum of remuneration which is 
subject to contributions under a State law.
    (l) Wages, total means the total sum of all remuneration covered by 
a State law, disregarding any dollar limitation on the amount of 
remuneration which is subject to contributions under the State law.



Sec. 606.4  Redelegation of authority.

    (a) Redelegation to UIS Director. The Director, Unemployment 
Insurance Service (hereinafter ``UIS Director''), is redelegated 
authority to make the determinations required under this part. This 
redelegation is contained in Employment and Training Order No. 1-84, 
published in the Federal Register on November 14, 1983 (48 FR 51870).
    (b) Delegation by Governor. The Governor of a State, as used in this 
part, refers to the highest executive official of a State. Wherever in 
this part an action is required by or of the Governor of a State, such 
action may be taken by the Governor or may be taken by a delegatee of 
the Governor if the Department is furnished appropriate proof of an 
authoritative delegation of authority.



Sec. 606.5  Verification of estimates and review of determinations.

    The Department of Labor (hereinafter ``Department'') shall verify 
all information and data provided by a State under this part, and the 
State shall comply with such provisions as the Department considers 
necessary to assure the correctness and verification of such information 
and data. The State agency of a State affected by a determination made 
by the UIS director under this part may seek review of such 
determination by a higher level official of the Employment and Training 
Administration.



Sec. 606.6  Information, reports, and studies.

    A State shall furnish to the Secretary of Labor such information and 
reports and conduct such studies as the Secretary determines are 
necessary or appropriate for carrying out the purposes of this part, 
including any additional information or data the UIS Director may 
require for the purposes of making determinations under subparts C and E 
of this part. This collection has been approved by the Office of

[[Page 34]]

Management and Budget under control number 1205-0205.

Subpart B--Tax Credit Reduction [Reserved]



               Subpart C_Relief from Tax Credit Reduction



Sec. 606.20  Cap on tax credit reduction.

    (a) Applicability. Subsection (f) of section 3302 of FUTA authorizes 
a limitation (cap) on the reduction of tax credits by reason of an 
outstanding balance of advances, if the UIS Director determines with 
respect to a State, on or before November 10 of a taxable year, that--
    (1) No action was taken by the State during the 12-month period 
ending on September 30 of such taxable year which has resulted, or will 
result, in a reduction in the State's unemployment tax effort, as 
defined in Sec. 606.21(a);
    (2) No action was taken by the State during the 12-month period 
ending on September 30 of such taxable year which has resulted, or will 
result, in a net decrease in the solvency of the State unemployment 
compensation system, as defined in Sec. 606.21(b);
    (3) The State unemployment tax rate (as defined in Sec. 606.3(j)) 
for the taxable year equals or exceeds the average benefit-cost ratio 
(as defined in Sec. 606.3(c)) for the calendar years in the five-
calendar year period ending with the calendar year immediately preceding 
the taxable year for which the cap is requested, under the rules 
specified in Sec. 606.21 (c) and (d); and
    (4) The outstanding balance of advances to the State on September 30 
of the taxable year was not greater than the outstanding balance of 
advances to the State on September 30 of the third preceding taxable 
year.
    (b) Maximum tax credit reduction. If a State qualifies for a cap, 
the maximum tax credit reduction for the taxable year shall not exceed 
0.6 percent, or, if higher, the tax credit reduction that was in effect 
for the taxable year preceding the taxable year for which the cap is 
requested.
    (c) Year not taken into account. If a State qualifies for a cap for 
any year, the year and January 1 of the year to which the cap applies 
will not be taken into account for purposes of determining reduction of 
tax credit for subsequent taxable years.
    (d) Partial caps. Partial caps obtained under subsection (f)(8) are 
no longer available. Nevertheless, for the purposes of applying section 
3302(c)(2) to subsequent taxable years, partial cap credits earned will 
be taken into account for purposes of determining reduction of tax 
credits. Also, the taxable year to which the partial cap applied (and 
January 1 thereof) will be taken into account for purposes of 
determining reduction of tax credits for subsequent taxable years.



Sec. 606.21  Criteria for cap.

    (a) Reduction in unemployment tax effort. (1) For purposes of 
paragraph (a)(1) of Sec. 606.20, a reduction in a State's unemployment 
tax effort will have occurred with respect to a taxable year if any 
action is or was taken (legislative, judicial, or administrative,) that 
is effective during the 12-month period ending on September 30 of such 
taxable year, which has resulted in or will result in a reduction of the 
amount of contributions paid or payable or the amounts that were or 
would have been paid or payable but for such action.
    (2) Actions that will result in a reduction in tax effort include, 
but are not limited to, a reduction in the taxable wage base, the tax 
rate schedule, tax rates, or taxes payable (including surtaxes) that 
would not have gone into effect but for the legislative, judicial, or 
administrative action taken. Notwithstanding the foregoing criterion, a 
reduction in unemployment tax effort resulting from any provision of the 
State law enacted prior to August 13, 1981, will not be taken into 
account as a reduction in the State's unemployment tax effort for the 
purposes of this section.
    (b) Net decrease in solvency. For purposes of paragraph (a)(2) of 
Sec. 606.20, a net decrease in the solvency of the State's unemployment 
compensation system will have occurred with respect to a taxable year if 
any action is or was taken (legislative, judicial, or administrative), 
that is effective during the 12-month period ending on September 30 of 
such taxable year, which

[[Page 35]]

has resulted in or will result in an increase in benefits without at 
least an equal increase in taxes, or a decrease in taxes without at 
least an equal decrease in benefits. Notwithstanding the foregoing 
criterion, a decrease in solvency resulting from any provision of the 
State law enacted prior to August 13, 1981, will not be taken into 
account as a reduction in solvency of the State's unemployment 
compensation system for the purposes of this section.
    (c) State unemployment tax rate. For purposes of paragraph (a)(3) of 
Sec. 606.20, the State unemployment tax rate is defined in Sec. 
606.3(j). If such percentage is not a multiple of 0.1 percent, the 
percentage shall remain unrounded.
    (d) State five-year average benefit cost ratio. For purposes of 
paragraph (a)(3) of Sec. 606.20, the average benefit cost ratio for the 
five preceding calendar years is the percentage determined by dividing 
the sum of the benefit cost ratios for the five years by five. If such 
percentage is not a multiple of 0.1 percent, the percentage shall remain 
unrounded.



Sec. 606.22  Application for cap.

    (a) Application. (1) The Governor of the State shall make 
application, addressed to the Secretary of Labor, no later than July 1 
of a taxable year with respect to which a State requests a cap on tax 
credit reduction. The Governor is required to notify the Department on 
or before October 15 of such taxable year of any action occurring after 
the date of the initial application and effective prior to October 1 of 
such year that would impact upon the State's application.
    (2) The UIS Director will make a determination on the application on 
or before November 10 of such taxable year, will notify the applicant 
and the Secretary of the Treasury of such determination, and will cause 
notice of such determination to be published in the Federal Register.
    (b) Anticipated impact statement. In support of the application by 
the Governor, there shall be submitted with the application (on or 
before October 15), for the purposes of the criteria described in 
Sec. Sec. 606.20(a) (1) and (2) and 606.21 (a) and (b), a description 
of all statutory provisions enacted or amended, regulations adopted or 
revised, administrative policies and procedures adopted or revised, and 
judicial decisions given effect, which are effective during the 12-month 
period ending on September 30 of the taxable year for which a cap on tax 
credit reduction is requested, and an anticipated impact statement (AIS) 
for each such program action in the following respect--
    (1) The estimated dollar effect on each program action upon 
expenditures for compensation from the State unemployment fund and for 
the amounts of contributions paid or payable in such 12-month period, 
including the effect of interaction among program actions, and with 
respect to program actions for which dollar impact cannot be estimated 
or is minor or negligible, indicate whether the impact is positive or 
negative;
    (2) If a program action has no such dollar effect, an explanation of 
why there is or will be no such effect;
    (3) A description of assumptions and methodology used and the basis 
for the financial estimate of the impact of each program action 
described in paragraphs (b)(1) and (b)(2) of this section; and
    (4) A comparision of the program actions described in paragraphs 
(b)(1) and (b)(2) of this section with the program actions prior to the 
Federal fiscal year (as defined in Sec. 606.3(f)) which ends on such 
September 30.
    (c) Unemployment tax rate. With respect to the unemployment tax rate 
criterion described in Sec. Sec. 606.20(a)(3) and 606.21(c), the 
application shall include an estimate for the taxable year with respect 
to which a cap on tax credit reduction is requested and actual data for 
the prior two years as follows:
    (1) The amount of taxable wages as defined in Sec. 606.3(k);
    (2) The amount of total wages as defined in Sec. 606.3(l); and
    (3) The estimated distribution of taxable wages, as defined in Sec. 
606.3(k), by tax rate under the State law.
    (d) Benefit cost ratio. With respect to the benefit cost ratio 
criterion described in Sec. Sec. 606.20(a)(3) and 606.21(d), the 
application shall include for each of the five calendar years prior to 
the taxable year for which a cap on tax

[[Page 36]]

credit reduction is requested, the following data:
    (1) The total dollar sum of compensation actually paid under the 
State law during the calendar year, including in such total sum all 
regular, additional, and extended compensation as defined in section 205 
of the Federal-State Extended Unemployment Compensation Act of 1970, but 
excluding from such total sum--
    (i) The total dollar amount of such compensation paid for which the 
State is entitled to reimbursement or was reimbursed under the 
provisions of any Federal law;
    (ii) The total dollar amount of such compensation paid which is 
attributable to services performed for a reimbursing employer, and which 
is not included in the total amount reported under paragraph (d)(1)(i) 
of this section;
    (2) The total dollar amount of interest paid during the calendar 
year on any advance; and
    (3) The total dollar amount of wages (as defined in Sec. 606.3(l)) 
with respect to such calendar year.
    (e) Documentation required. Copies of the sources of or authority 
for each program action described in paragraph (b) of this section shall 
be submitted with each application for a cap on tax credit reduction. In 
addition, a notation shall be made on each AIS of where all figures 
referred to are contained in reports required by the Department or in 
other data sources.
    (f) State contact person. The Department may request additional 
information or clarification of information submitted bearing upon an 
application for a cap on tax credit reduction. To expedite requests for 
such information, the name and telephone number of an appropriate State 
official shall be included in the application by the Governor.



Sec. 606.23  Avoidance of tax credit reduction.

    (a) Applicability. Subsection (g) of section 3302 of FUTA authorizes 
a State to avoid a tax credit reduction for a taxable year by meeting 
the three requirements of subsection (g). These requirements are met if 
the UIS Director determines that:
    (1) Advances were repaid by the State during the one-year period 
ending on November 9 of the taxable year in an amount not less than the 
sum of--
    (i) The potential additional taxes (as estimated by the UIS 
Director) that would be payable by the State's employers if paragraph 
(2) of section 3302(c) of FUTA were applied for such taxable year (as 
estimated with regard to the cap on tax credit reduction for which the 
State qualifies under Sec. Sec. 606.20 to 606.22 with respect to such 
taxable year), and
    (ii) Any advances made to such State during such one-year period 
under title XII of the Social Security Act;
    (2) There will be adequate funds in the State unemployment fund (as 
estimated by the UIS Director) sufficient to pay all benefits when due 
and payable under the State law during the three-month period beginning 
on November 1 of such taxable year without receiving any advance under 
title XII of the Social Security Act; and
    (3) There is a net increase (as estimated by the UIS Director) in 
the solvency of the State unemployment compensation system for the 
taxable year and such net increase equals or exceeds the potential 
additional taxes for such taxable year as estimated under paragraph 
(a)(1)(i) of this section.
    (b) Net increase in solvency. (1) The net increase in solvency for a 
taxable year, as determined for the purposes of paragraph (a)(3) of this 
section, must be attributable to legislative changes made in the State 
law after the later of--
    (i) September 3, 1982, or
    (ii) The date on which the first advance is taken into account in 
determining the amount of the potential additional taxes.
    (2) The UIS Director shall determine the net increase in solvency by 
first estimating the difference between revenue receipts and benefit 
outlays under the law in effect for the year for which avoidance is 
requested, as if the relevant changes in State law referred to in 
paragraph (b)(1) of this section were not in effect for such year. The 
UIS Director shall then estimate the difference between revenue receipts 
and benefit outlays under the law in effect for the year for which the 
avoidance is

[[Page 37]]

requested, taking into account the relevant changes in State law 
referred to in paragraph (b)(1) of this section. The amount (if any) by 
which the second estimated difference exceeds the first estimated 
difference shall constitute the net increase in solvency for the 
purposes of this section.
    (c) Year taken into account. If a State qualifies for avoidance for 
any year, that year and January 1 of that year to which the avoidance 
applies will be taken into account for purposes of determining reduction 
of tax credits for subsequent taxable years.



Sec. 606.24  Application for avoidance.

    (a) Application. (1) The Governor of the State shall make 
application, addressed to the Secretary of Labor, no later than July 1 
of a taxable year with respect to which a State requests avoidance of 
tax credit reduction. The Governor is required to notify the Department 
on or before October 15 of such taxable year of any action impacting 
upon the State's application occurring subsequent to the date of the 
initial application and on or before November 10.
    (2) The UIS Director will make a determination on the application as 
of November 10 of such taxable year, will notify the applicant and the 
Secretary of the Treasury of such determination, and will cause notice 
of such determination to be published in the Federal Register.
    (b) Information. (1) The application shall include a statement of 
the amount of advances repaid and to be repaid during the one-year 
period ending on November 9 of the taxable year for which avoidance is 
requested. If the amount repaid as of the date of the application is 
less than the amount required to satisfy the provisions of Sec. 
606.23(a)(1), the Governor shall provide a report later of the 
additional repayments that have been made in the remainder of the one-
year period ending on November 9 of the taxable year, for the purposes 
of meeting the provisions of Sec. 606.23(a)(1).
    (2) The application also shall include estimates of revenue 
receipts, benefit outlays, and end-of-month fund balance for each month 
in the period beginning with September of the taxable year for which 
avoidance is requested through the subsequent January. Actual data for 
the comparable period of the preceding year also shall be included in 
the application in order to determine the reasonableness of such 
estimates.
    (3) The application also shall include a description of State law 
changes, effective for the taxable year for which the avoidance is 
requested, which resulted in a net increase in the solvency of the State 
unemployment compensation system, and documentation which supports the 
State's estimate of the net increase in solvency for such taxable year.



Sec. 606.25  Waiver of and substitution for additional tax credit 
reduction.

    A provision of subsection (c)(2) of section 3302 of FUTA provides 
that, for a State that qualifies, the additional tax credit reduction 
applicable under subparagraph (C), beginning in the fifth consecutive 
year of a balance of outstanding advances, shall be waived and the 
additional tax credit reduction applicable under subparagraph (B) shall 
be substituted. The waiver and substitution are granted if the UIS 
Director determines that the State has taken no action, effective during 
the 12-month period ending on September 30 of the year for which the 
waiver and substitution are requested, which has resulted or will result 
in a net decrease in the solvency of the State unemployment compensation 
system as determined for the purposes of Sec. Sec. 606.20(a)(2) and 
606.21(b).



Sec. 606.26  Application for waiver and substitution.

    (a) Application. The Governor of the State shall make application 
addressed to the Secretary of Labor, no later than July 1 of a taxable 
year with respect to which a State requests waiver and substitution. Any 
such application shall contain the supportive data and information 
required by Sec. 606.22(b) for the purposes of Sec. Sec. 606.20(a)(2) 
and 606.21(b). The Governor is required to notify the Department on or 
before October 15 of such taxable year of action occurring after the 
date of the initial application and effective prior to October 1 of such 
year that would impact upon the State's application.

[[Page 38]]

    (b) Notification of determination. The UIS Director will make a 
determination on the application as of November 10 of the taxable year, 
will notify the applicant and the Secretary of the Treasury of the 
resulting tax credit reduction to be applied, and will cause notice of 
such determination to be published in the Federal Register.



                     Subpart D_Interest on Advances



Sec. 606.30  Interest rates on advances.

    Advances made to States pursuant to title XII of the Social Security 
Act on or after April 1, 1982, shall be subject to interest payable on 
the due dates specified in Sec. 606.31.\1\ The interest rate for each 
calendar year will be 10 percent or, if less, the rate determined by the 
Secretary of the Treasury and announced to the States by the Department.
---------------------------------------------------------------------------

    \1\ (Editorial note: This section will be added at a later date.)
---------------------------------------------------------------------------



Sec. 606.31  Due dates for payment of interest. [Reserved]



Sec. 606.32  Types of advances subject to interest.

    (a) Payment of interest. Except as otherwise provided in paragraph 
(b) of this section each State shall pay interest on any advance made to 
such State under title XII of the Social Security Act.
    (b) Cash flow loans. Advances repaid in full prior to October 1 of 
the calendar year in which made are deemed cash flow loans and shall be 
free of interest; provided, that the State does not receive an 
additional advance after September 30 of the same calendar year. If such 
additional advance is received by the State, interest on the completely 
repaid earlier advance(s) shall be due and payable not later than the 
day following the date of the first such additional advance. The 
administrator of the State agency shall notify the Secretary of Labor no 
later than September 10 of those loans deemed to be cash flow loans and 
not subject to interest. This notification shall include the date and 
amount of each loan made in January through September and a copy of 
documentation sent to the Secretary of the Treasury requesting loan 
repayment transfer(s) from the State's account in the Unemployment Trust 
Fund to the Federal unemployment account in such Fund.



Sec. 606.33  No payment of interest from unemployment fund. [Reserved]



Sec. 606.34  Reports of interest payable. [Reserved]



Sec. 606.35  Order of application for repayments. [Reserved]



                 Subpart E_Relief from Interest Payment



Sec. 606.40  May/September delay.

    Subsection (b)(3)(B) of section 1202 of the Social Security Act 
permits a State to delay payment of interest accrued on advances made 
during the last five months of the Federal fiscal year (May, June, July, 
August, and September) to no later than December 31 of the next 
succeeding calendar year. If the payment is delayed, interest on the 
delayed payment will accrue from the normal due date (i.e., September 
30) and in the same manner as if the interest due on the advance(s) was 
an advance made on such due date. The Governor of a State which has 
decided to delay such interest payment shall notify the Secretary of 
Labor no later than September 1 of the year with respect to which the 
delay is applicable.



Sec. 606.41  High unemployment deferral.

    (a) Applicability. Subsection (b)(3)(C) of section 1202 of the 
Social Security Act permits a State to defer payment of, and extend the 
payment for, 75 percent of interest charges otherwise due prior to 
October 1 of a year if the UIS Director determines that high 
unemployment conditions existed in the State.
    (b) High unemployment defined. For purposes of this section, high 
unemployment conditions existed in the State if the State's rate of 
insured unemployment (as determined for purposes of 20 CFR 615.12) under 
the State law with respect to the period consisting of the first six 
months of the preceding calendar year equalled or exceeded 7.5 percent; 
this means that in

[[Page 39]]

weeks 1 (that week which includes January 1 of the year) through 26 of 
such preceding calendar year, the rate of insured unemployment reported 
by the State and accepted by the Department under 20 CFR part 615 must 
have averaged a percentage equalling or exceeding 7.5 percent.
    (c) Schedule of deferred payments. The State must pay prior to 
October 1 one-fourth of the interest due, and must pay a minimum of one-
third of the deferred amount prior to October 1 in each of the three 
years following the year in which deferral was granted; at the State's 
option payment of deferred interest may be accelerated.
    (d) Related criteria. Timely payment of one-fourth of the interest 
due prior to October 1 is a precondition to obtaining deferral of 
payment of 75 percent of the interest due. No interest shall accrue on 
such deferred interest.
    (e) Application for deferral and determination. (1) The Governor of 
a State which has decided to request such deferral of interest payment 
shall apply to the Secretary of Labor no later than July 1 of the 
taxable year for which the deferral is requested.
    (2) The UIS Director will determine whether deferral is or is not 
granted on the basis of the Department's records of reports of the rates 
of insured unemployment and information obtained from the Department of 
the Treasury as to the timely and full payment of one-fourth of the 
interest due.



Sec. 606.42  High unemployment delay.

    (a) Applicability. Paragraph (9) of section 1202 (b) of the Social 
Security Act permits a State to delay for a period not exceeding nine 
months the interest payment due prior to October 1 if, for the most 
recent 12-month period prior to such October 1 for which data are 
available, the State had an average total unemployment rate of 13.5 
percent or greater.
    (b) Delayed due date. An interest payment delayed under paragraph 
(9) must be paid in full not later than the last official Federal 
business day prior to the following July 1; at the State's option 
payment of delayed interest may be accelerated. No interest shall accrue 
on such delayed payment.
    (c) Application for delay in payment and determination. (1) The 
Governor of a State which has decided to request delay in payment of 
interest under paragraph (9) shall apply to the Secretary of Labor no 
later than July 1 of the taxable year for which the delay is requested.
    (2) The UIS Director will determine whether delay is or is not 
granted on the basis of seasonally unadjusted civilian total 
unemployment rate data published by the Department's Bureau of Labor 
Statistics.



Sec. 606.43  Maintenance of solvency effort.

    (a) Applicability. Legislative-action interest deferrals obtained 
under subsection (b)(8) (A) through (C) of section 1202 of the Social 
Security Act are no longer available. Nevertheless, States must maintain 
their solvency effort with respect to any such deferrals approved in 
1983, 1984, and 1985 in order for the deferral to continue to apply in 
each subsequent year of deferral.
    (b) Determination regarding maintenance of solvency effort. (1) The 
UIS Director shall determine if there is a net reduction in solvency 
effort by first estimating revenue receipts and benefit outlays under 
the law in effect in the 12-month period ending on September 30 of the 
year for which continuation of deferral is requested as if it were 
effective in the base year (12-month period for which the first deferral 
was granted).
    (2) The UIS Director shall then compare revenue receipts and benefit 
outlays for the base year (previously estimated at the time of the 
original deferral) with revenue receipts and benefit outlays estimated 
in paragraph (b)(1) of this section.
    (3) If the sum of--
    (i) The percentage increase in revenue receipts from the base year 
to the year for which the continuation of deferral is requested (as 
estimated in paragraph (b)(1) of this section), and
    (ii) The percentage decrease in benefit outlays from the base year 
to the year for which the continuation of deferral is requested (as 
estimated in paragraph (b)(1) of this section),

is equal to or greater than the sum of such percentages achieved for the 
12-

[[Page 40]]

month period ending on September 30 of the year for which the latest 
deferral was obtained, the State will have maintained its solvency 
effort, but if less, then a reduction in solvency effort will have 
occurred.
    (4) Notwithstanding the results of the calculation in paragraph 
(b)(3) of this section, if there is no increase in revenue receipts or 
no decrease in benefit outlays between the base year and the year for 
which continuation of deferral is requested, then a reduction in 
solvency effort will have occurred.
    (c) Effect of determination. (1) If the UIS Director determines that 
a State has maintained its solvency effort, continuation of deferral 
will be granted, and the State will be required to timely pay the 
deferred interest payable prior to October 1 of the year with respect to 
which such determination is made.
    (2) If the UIS Director determines that a State failed to maintain 
its solvency effort, all deferred interest shall be due and payable 
prior to October 1 of the year with respect to which such determination 
is made.
    (d) Application and information. (1) The Governor of a State which 
has decided to request continuation of a previously approved deferral of 
interest payments shall apply to the Secretary of Labor no later than 
July 1 of the year for which continuation is requested. The Governor is 
required to notify the Department on or before September 1 of such 
taxable year of any action impacting upon the State's application which 
has occurred or will occur subsequent to the date of the initial 
application and on or before September 30.
    (2) In support of the application by the Governor, there shall be 
submitted for the purposes of the estimates required in paragraph (b) of 
this section documentation as specified in Sec. 606.22 (b)(1) through 
(4), (c) and (f) and bearing upon the application for continuation of 
deferral, in terms of the relevant comparison between revenue receipts 
and benefit outlays.



Sec. 606.44  Notification of determinations.

    The UIS Director will make determinations under Sec. Sec. 606.41, 
606.42, and 606.43 on or before September 10 of the taxable year, will 
promptly notify the applicants and the Secretary of the Treasury of such 
determinations, and will cause notice of such determinations to be 
published in the Federal Register. The UIS Director also will inform the 
Secretary of the Treasury and cause notice to be published in the 
Federal Register of information with respect to delayed payment of 
interest as provided in Sec. 606.40.



PART 609_UNEMPLOYMENT COMPENSATION FOR FEDERAL CIVILIAN EMPLOYEES
--Table of Contents




                      Subpart A_General Provisions

Sec.
609.1 Purpose and application.
609.2 Definitions of terms.

                Subpart B_Administration of UCFE Program

609.3 Eligibility requirements for UCFE.
609.4 Weekly and maximum benefit amounts.
609.5 Claims for UCFE.
609.6 Determinations of entitlement; notices to individual.
609.7 Appeal and review.
609.8 The applicable State for an individual.
609.9 Provisions of State law applicable to UCFE claims.
609.10 Restrictions on entitlement.
609.11 Overpayments; penalties for fraud.
609.12 Inviolate rights to UCFE.
609.13 Recordkeeping; disclosure of information.
609.14 Payments to States.
609.15 Public access to Agreements.
609.16 Administration in absence of an Agreement.
609.17 Information, reports, and studies.

             Subpart C_Responsibilities of Federal Agencies

609.20 Information to Federal civilian employees.
609.21 Findings of Federal agency.
609.22 Correcting Federal findings.
609.23 Furnishing additional information.
609.24 Reconsideration of Federal findings.
609.25 Furnishing other information.
609.26 Liaison with Department.

    Authority: 5 U.S.C. 8508; Secretary's Order No. 4-75, 40 FR 18515; 
(5 U.S.C. 301). Interpret and apply secs. 8501-8508 of title 5, United 
States Code.

    Source: 47 FR 54687, Dec. 3, 1982, unless otherwise noted.

[[Page 41]]



                      Subpart A_General Provisions



Sec. 609.1  Purpose and application.

    (a) Purpose. Subchapter I of chapter 85, title 5 of the United 
States Code, as amended by Pub. L. 94-566, 90 Stat. 2667, 5 U.S.C. 8501-
8508, provides for a permanent program of unemployment compensation for 
unemployed Federal civilian employees. The unemployment compensation 
provided for in subchapter I is hereinafter referred to as unemployment 
compensation for Federal employees, or UCFE. The regulations in this 
part are issued to implement the UCFE Program.
    (b) First rule of construction. The Act and the implementing 
regulations in this part shall be construed liberally so as to carry out 
the purposes of the Act.
    (c) Second rule of construction. The Act and the implementing 
regulations in this part shall be construed so as to assure insofar as 
possible the uniform interpretation and application of the Act 
throughout the United States.
    (d) Effectuating purpose and rules of construction. (1) In order to 
effectuate the provisions of this section, each State agency shall 
forward to the United States Department of Labor (hereafter Department), 
not later than 10 days after issuance, a copy of each judicial or 
administrative decision ruling on an individual's entitlement to payment 
of UCFE or to credit for a waiting period. On request of the Department, 
a State agency shall forward to the Department a copy of any 
determination or redetermination ruling on an individual's entitlement 
to UCFE or waiting period credit.
    (2) If the Department believes that a determination, 
redetermination, or decision is inconsistent with the Department's 
interpretation of the Act or this part, the Department may at any time 
notify the State agency of the Department's view. Thereafter the State 
agency shall issue a redetermination or appeal if possible, and shall 
not follow such determination, redetermination, or decision as a 
precedent; and, in any subsequent proceedings which involve such 
determination, redetermination, or decision, or wherein such 
determination, redetermination, or decision is cited as precedent or 
otherwise relied upon, the State agency shall inform the claims deputy 
or hearing officer or court of the Department's view and shall make all 
reasonable efforts, including appeal or other proceedings in an 
appropriate forum, to obtain modification, limitation, or overruling of 
the determination, redetermination, or decision.
    (3) If the Department believes that a determination, 
redetermination, or decision is patently and flagrantly violative of the 
Act or this part, the Department may at any time notify the State agency 
of the Department's view. If the determination, redetermination, or 
decision in question denies UCFE to a claimant, the steps outlined in 
paragraph (d)(2) of this section shall be followed by the State agency. 
If the determination, redetermination, or decision in question awards 
UCFE to a claimant, the benefits are ``due'' within the meaning of 
section 303(a)(1) of the Social Security Act, 42 U.S.C. 503(a)(1), and 
therefore must be paid promptly to the claimant. However, the State 
agency shall take the steps outlined in paragraph (d)(2) of this 
section, and payments to the claimant may be temporarily delayed if 
redetermination or appeal action is taken not more than one business day 
following the day on which the first payment otherwise would be issued 
to the claimant; and the redetermination action is taken or appeal is 
filed to obtain a reversal of the award of UCFE and a ruling consistent 
with the Department's view; and the redetermination action or appeal 
seeks an expedited redetermination or appeal within not more than two 
weeks after the redetermination action is taken or the appeal is filed. 
If redetermination action is not taken or appeal is not filed within the 
above time limit, or a redetermination or decision is not obtained 
within the two-week limit, or any redetermination or decision or order 
is issued which affirms the determination, redetermination, or decision 
awarding UCFE or allows it to stand in whole or in part, the benefits 
awarded must be paid promptly to the claimant.
    (4)(i) If any determination, redetermination, or decision, referred 
to in paragraph (d)(2) or paragraph (d)(3) of this section, is treated 
as a precedent for any future UCFE claim or claim

[[Page 42]]

under the UCX Program (part 614 of this chapter), the Secretary will 
decide whether the Agreement with the State entered into under the Act 
shall be terminated.
    (ii) In the case of any determination, redetermination, or decision 
that is not legally warranted under the Act or this part, including any 
determination, redetermination, or decision referred to in paragraph 
(d)(3) of this section, the Secretary will decide whether the State 
shall be required to restore the funds of the United States for any sums 
paid under such a determination, redetermination, or decision, and 
whether, in the absence of such restoration, the Agreement with the 
State shall be terminated and whether other action shall be taken to 
recover such sums for the United States.
    (5) A State agency may request reconsideration of a notice issued 
pursuant to paragraph (d)(2) of paragraph (d)(3) of this section, and 
shall be given an opportunity to present views and arguments if desired.
    (6) Concurrence of the Department in a determination, 
redetermination, or decision shall not be presumed from the absence of a 
notice issued pursuant to this section.



Sec. 609.2  Definitions of terms.

    For the purposes of the Act and this part:
    (a) Act means subchapter I of chapter 85, title 5, United States 
Code, 5 U.S.C. 8501-8508.
    (b) Agreement means the agreement entered into pursuant to the Act 
between a State and the Secretary under which the State agency of the 
State agrees to make payments of unemployment compensation in accordance 
with the Act and the regulations and procedures thereunder prescribed by 
the Department.
    (c) Based period means the base period as defined by the applicable 
State law for the benefit year.
    (d) Benefit year means the benefit year as defined by the applicable 
State law, and if not so defined the term means the period prescribed in 
the agreement with the State or, in the absence of an Agreement, the 
period prescribed by the Department.
    (e) Federal agency means any department, agency, or governmental 
body of the United States, including any instrumentality wholly or 
partially owned by the United States, in any branch of the Government of 
the United States, which employs any individual in Federal civilian 
service.
    (f) Federal civilian service means service performed in the employ 
of any Federal agency, except service performed--
    (1) By an elective official in the executive or legislative branches 
of the Government of the United States;
    (2) As a member of the Armed Forces or the Commissioned Corps of the 
National Oceanic and Atmospheric Administration;
    (3) By Foreign Service personnel for whom special separation 
allowances are provided under chapter 14 of title 22 of the United 
States Code;
    (4) Outside the 50 States, the Commonwealth of Puerto Rico, the 
Virgin Islands, and the District of Columbia, by an individual who is 
not a citizen of the United States;
    (5) By an individual excluded by regulations of the Office of 
Personnel Management from civil service retirement coverage provided by 
subchapter III of chapter 83 of title 5 of the United States Code 
because the individual is paid on a contract or fee basis;
    (6) By an individual receiving nominal pay and allowances of $12 or 
less a year;
    (7) In a hospital, home, or other institution of the United States 
by a patient or inmate thereof;
    (8) By a student-employee as defined by 5 U.S.C. 5351; that is: (i) 
A student nurse, medical or dental intern, resident-in-training, student 
dietitian, student physical therapist, or student occupational 
therapist, assigned or attached to a hospital, clinic, or medical or 
dental laboratory operated by an agency as defined in section 5351; or
    (ii) Any other student-employee, assigned or attached primarily for 
training purposes to such a hospital, clinic, or medical or dental 
laboratory operated by such an agency, who is designated by the head of 
the agency with the approval of the Office of Personnel Management;

[[Page 43]]

    (9) By an individual serving on a temporary basis in case of fire, 
storm, earthquake, flood, or other similar emergency;
    (10) By an individual employed under a Federal relief program to 
relieve the individual from unemployment;
    (11) As a member of a State, county, or community committee under 
the Agricultural Stabilization and Conservation Service or of any other 
board, council, committee, or other similar body, unless such body is 
composed exclusively of individuals otherwise in the full-time employ of 
the United States;
    (12) By an officer or member of the crew on or in connection with an 
American vessel which is: (i) Owned by or bareboat chartered to the 
United States, and
    (ii) The business of which is conducted by a general agent of the 
Secretary of Commerce; and
    (iii) If contributions on account of such service are required under 
section 3305(g) of the Internal Revenue Code of 1954 (26 U.S.C. 3305(g)) 
to be made to an unemployment fund under a State law;
    (13) By an individual excluded by any other Federal law from 
coverage under the UCFE Program; or
    (14) By an individual whose service is covered by the UCX Program to 
which part 614 of this chapter applies.
    (g) Federal employee means an individual who has performed Federal 
civilian service.
    (h) Federal findings means the facts reported by a Federal agency 
pertaining to an individual as to: (1) Whether or not the individual has 
performed Federal civilian service for such an agency;
    (2) The period or periods of such Federal civilian service;
    (3) The individual's Federal wages; and
    (4) The reasons for termination of the individual's Federal civilian 
service.
    (i) Federal wages means all pay and allowances, in cash and in kind, 
for Federal civilian service.
    (j) First claim means an initial claim for unemployment compensation 
under the UCFE Program, the UCX Program (part 614 of this chapter), a 
State law, or some combination thereof, whereby a benefit year is 
established under an applicable State law.
    (k) Official station means the State (or country, if outside the 
United States) designated on a Federal employee's notification of 
personnel action terminating the individual's Federal civilian service 
(Standard Form 50 or its equivalent) as the individual's ``duty 
station.'' If the form of notification does not specify the Federal 
employee's ``duty station'', the individual's official station shall be 
the State or country designated under ``name and location of employing 
office'' on such form or designated as the individual's place of 
employment on an equivalent form.
    (l) Secretary means the Secretary of Labor of the United States.
    (m) State means the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the Virgin Islands.
    (n) State agency means the agency of the State which administers the 
applicable State law and is administering the UCFE Program in the State 
pursuant to an Agreement with the Secretary.
    (o)(1) State law means the unemployment compensation law of a State 
approved by the Secretary under section 3304 of the Internal Revenue 
Code of 1954, 26 U.S.C. 3304, if the State is certified under section 
3304(c) of the Internal Revenue Code of 1954, 26 U.S.C. 3304(c).
    (2) Applicable State law means the State law made applicable to a 
UCFE claimant by Sec. 609.8.
    (p)(1) Unemployment compensation means cash benefits (including 
dependents' allowances) payable to individuals with respect to their 
unemployment, and includes regular, additional, emergency, and extended 
compensation.
    (2) Regular compensation means unemployment compensation payable to 
an individual under any State law, but not including additional 
compensation or extended compensation.
    (3) Additional compensation means unemployment compensation totally 
financed by a State and payable under a State law by reason of 
conditions of high unemployment or by reason of other special factors.

[[Page 44]]

    (4) Emergency compensation means supplementary unemployment 
compensation payable under a temporary Federal law after exhaustion of 
regular and extended compensation.
    (5) Extended compensation means unemployment compensation payable to 
an individual for weeks of unemployment in an extended benefit period, 
under those provisions of a State law which satisfy the requirements of 
the Federal-State Extended Unemployment Compensation Act of 1970, as 
amended, 26 U.S.C. 3304 note, and part 615 of this chapter, with respect 
to the payment of extended compensation.
    (q) Week means, for purposes of eligibility for and payment of UCFE, 
a week as defined in the applicable State law.
    (r) Week of unemployment means a week of total, part-total, or 
partial unemployment as defined in the applicable State law, which shall 
be applied in the same manner and to the same extent to all employment 
and earnings, and in the same manner and to the same extent for the 
purposes of the UCFE Program, as if the individual filing for UCFE were 
filing a claim for State unemployment compensation.



                Subpart B_Administration of UCFE Program



Sec. 609.3  Eligibility requirements for UCFE.

    An individual shall be eligible to receive a payment of UCFE or to 
waiting period credit with respect to a week of unemployment if:
    (a) The individual has Federal civilian service and Federal wages in 
the base period under the applicable State law;
    (b) The individual meets the qualifying employment and wage 
requirements of the applicable State law, either on the basis of Federal 
civilian service and Federal wages alone or in combination with service 
and wages covered under a State law or under the UCX Program (part 614 
of this chapter);
    (c) The individual has filed an initial claim for UCFE and, as 
appropriate, has filed a timely claim for waiting period credit or a 
payment of UCFE with respect to that week of unemployment; and
    (d) The individual is totally, part-totally, or partially 
unemployed, and is able to work, available for work, and seeking work 
within the meaning of or as required by the applicable State law, and is 
not subject to disqualification under this part or the applicable State 
law, with respect to that week of unemployment.



Sec. 609.4  Weekly and maximum benefit amounts.

    (a) Total unemployment. The weekly amount of UCFE payable to an 
eligible individual for a week of total unemployment shall be the amount 
that would be payable to the individual as unemployment compensation for 
a week of total unemployment as determined under the applicable State 
law.
    (b) Partial and part-total unemployment. The weekly amount of UCFE 
payable for a week of partial or part-total unemployment shall be the 
amount that would be payable to the individual as unemployment 
compensation for a week of partial or part-total unemployment as 
determined under the applicable State law.
    (c) Maximum amount. The maximum amount of UCFE which shall be 
payable to an eligible individual during and subsequent to the 
individual's benefit year shall be the maximum amount of all 
unemployment compensation that would be payable to the individual as 
determined under the applicable State law.
    (d) Computation rules. (1) The weekly and maximum amounts of UCFE 
payable to an individual under the UCFE Program shall be determined 
under the applicable State law to be in the same amount, on the same 
terms, and subject to the same conditions as the State unemployment 
compensation which would be payable to the individual under the 
applicable State law if the individual's Federal civilian service and 
Federal wages assigned or transferred under this part to the State had 
been included as employment and wages covered by that State law.
    (2) All Federal civilian service and Federal wages for all Federal 
agencies shall be considered employment with a single employer for 
purposes of the UCFE Program.

[[Page 45]]



Sec. 609.5  Claims for UCFE.

    (a) First claims. A first claim for UCFE shall be filed by an 
individual in any State agency of any State (or Canada) according to the 
applicable State law, and on a form prescribed by the Department which 
shall be furnished to the individual by the State agency where the claim 
is filed.
    (b) Weekly claims. Claims for waiting week credit and payments of 
UCFE for weeks of unemployment shall be filed in any State agency (or 
Canada) at the times and in the manner as claims for State unemployment 
compensation are filed under the applicable State law, and on forms 
prescribed by the Department which shall be furnished to the individual 
by the State agency where the claim is filed.
    (c) Secretary's standard. The procedure for reporting and filing 
claims for UCFE and waiting period credit shall be consistent with this 
part 609 and the Secretary's ``Standard for Claim Filing, Claimant 
Reporting, Job Finding and Employment Services'' (Employment Security 
Manual, part V, sections 5000 et seq.).



Sec. 609.6  Determinations of entitlement; notices to individual.

    (a) Determination of first claim. The State agency whose State law 
applies to an individual under Sec. 609.8 shall, promptly upon the 
filing of a first claim for UCFE, determine whether the individual is 
eligible and whether a disqualification applies, and, if the individual 
is found to be eligible, the individual's benefit year and the weekly 
and maximum amounts of UCFE payable to the individual.
    (b) Determinations of weekly claims. The State agency promptly 
shall, upon the filing of a claim for payment of UCFE or waiting period 
credit with respect to a week, determine whether the individual is 
entitled to a payment of UCFE or waiting period credit with respect to 
such week, and, if entitled, the amount of UCFE or waiting period credit 
to which the individual is entitled.
    (c) Redetermination. The provisions of the applicable State law 
concerning the right to request, or authority to undertake, 
reconsideration of a determination pertaining to State unemployment 
compensation under the applicable State law shall apply to 
determinations pertaining to UCFE.
    (d) Notices to individual. The State agency promptly shall give 
notice in writing to the individual of any determination or 
redetermination of a first claim, and, except as may be authorized under 
paragraph (g) of this section, of any determination or redetermination 
of any weekly claim which denies UCFE or waiting period credit or 
reduces the weekly amount or maximum amount initially determined to be 
payable. Each notice of determination or redetermination shall include 
such information regarding the determination or redetermination and 
notice of right to reconsideration or appeal, or both, as is furnished 
with written notices of determinations and redeterminations with respect 
to claims for State unemployment compensation; and where information 
furnished by a Federal agency was considered in making the 
determination, or redetermination, the notice thereof shall include an 
explanation of the right of the individual to seek additional 
information pursuant to Sec. 609.23 and/or a reconsideration of Federal 
findings pursuant to Sec. 609.24.
    (e) Obtaining information for claim determinations. (1) Information 
required for the determination of claims for UCFE shall be obtained by 
the State agency from claimants, employers, and others, in the same 
manner as information is obtained for claim purposes under the 
applicable State law, but information (including additional and 
reconsidered Federal findings) shall be obtained from the Federal agency 
that employed the UCFE claimant as prescribed in Sec. Sec. 609.21 
through 609.25. On request by a UCFE claimant, the State agency shall 
seek additional information pursuant to Sec. 609.23 and reconsideration 
of Federal findings pursuant to Sec. 609.24.
    (2) If Federal findings have not been received from a Federal agency 
within 12 days after the request for information was submitted to the 
Federal agency, the State agency shall determine the individual's 
entitlement to UCFE on the basis of an affidavit completed by the 
individual on a form prescribed by the Department. In addition,

[[Page 46]]

the individual shall submit for examination by the State agency any 
documents issued by the Fedeal agency (for example, Standard Form 50 or 
W-2) verifying that the individual performed services for and received 
wages from such Federal agency.
    (3) If Federal findings received by a State agency after a 
determination has been made under this section contain information which 
would result in a change in the individual's eligibility for or 
entitlement to UCFE, the State agency promptly shall make a 
redetermination and notify the individual, as provided in this section. 
All payments of UCFE made prior to or after such redetermination shall 
be adjusted in accordance therewith.
    (f) Promptness. Full payment of UCFE when due shall be consistent 
with this part 609 and shall be made with the greatest promptness that 
is administratively feasible, but the provisions of part 640 of this 
chapter (relating to promptness of benefit payments) shall not be 
applicable to the UCFE Program.
    (g) Secretary's standard. The procedures for making determinations 
and redeterminations, and furnishing written notices of determinations, 
redeterminations, and rights of appeal to individuals applying for UCFE, 
shall be consistent with this part 609 and with the Secretary's 
``Standard for Claim Determinations--Separation Information'' 
(Employment Security Manual, part V, sections 6010 et seq.).



Sec. 609.7  Appeal and review.

    (a) Applicable State law. The provisions of the applicable State law 
concerning the right of appeal and fair hearing from a determination or 
redetermination of entitlement to State unemployment compensation shall 
apply to determinations and redeterminations of eligibility for or 
entitlement to UCFE and waiting period credit. Any such determination or 
redetermination shall be subject to appeal and review only in the manner 
and to the extent provided in the applicable State law with respect to 
determinations and redeterminations of entitlement to State unemployment 
compensation.
    (b) Rights of appeal and fair hearing. The provisions on right to 
appeal and opportunity for a fair hearing with respect to claims for 
UCFE shall be consistent with this part and with sections 303(a)(1) and 
303(a)(3) of the Social Security Act, 42 U.S.C. 503(a)(1) and 503(a)(3).
    (c) Promptness on appeals. (1) Decisions on appeals under the UCFE 
Program shall accord with the Secretary's ``Standard for Appeals 
Promptness--Unemployment Compensation'' in part 650 of this chapter, and 
with Sec. 609.1(d).
    (2) Any provision of an applicable State law for advancement or 
priority of unemployment compensation cases on judicial calenders, or 
otherwise intended to provide for the prompt payment of unemployent 
compensation when due, shall apply to proceedings involving claims for 
UCFE.
    (d) Appeal and review by Federal agency. If a Federal agency 
believes that a State agency's determination or redetermination of an 
individual's eligibility for or entitlement to UCFE is incorrect, the 
Federal agency may seek appeal and review of such determination or 
redetermination in the same manner as an interested employer may seek 
appeal and review under the applicable State law.



Sec. 609.8  The applicable State for an individual.

    (a) The applicable State. The applicable State for an individual 
shall be the State to which the individual's Federal civilian service 
and Federal wages are assigned or transferred under this section. The 
applicable State law for the individual shall be the State law of such 
State.
    (b) Assignment of service and wages. (1) An individual's Federal 
civilian service and Federal wages shall be assigned to the State in 
which the individual had his or her last official station prior to 
filing a first claim unless:
    (i) At the time a first claim is filed the individual resides in 
another State in which, after separation from Federal civilian service, 
the individual performed service covered under the State law, in which 
case all of the individual's Federal civilian service and wages shall be 
assigned to the latter State; or
    (ii) Prior to filing a first claim an individual's last official 
station was outside the States, in which case all of the

[[Page 47]]

individual's Federal civilian service and Federal wages shall be 
assigned to the State in which the individual resides at the time the 
individual files a first claim, provided the individual is personally 
present in a State when the individual files the first claim.
    (2) Federal civilian service and wages assigned to a State in error 
shall be reassigned for use by the proper State agency. An appropriate 
record of a reassignment shall be made by the State agency which makes 
the reassignment.
    (3) Federal civilian service and Federal wages assigned to a State 
shall be transferred to another State where such transfer is necessary 
for the purposes of a combined-wage claim filed by an individual.
    (c) Assignment deemed complete. All of an individual's Federal 
civilian service and Federal wages shall be deemed to have been assigned 
to a State upon the filing of a first claim. Federal civilian service 
and Federal wages shall be assigned to a State only in accordance with 
paragraph (b) of this section.
    (d) Use of assigned service and wages. All assigned Federal civilian 
service and Federal wages shall be used only by the State to which 
assigned or transferred in accordance with paragraph (b) of this 
section.



Sec. 609.9  Provisions of State law applicable to UCFE claims.

    (a) Particular provisions applicable. Except where the result would 
be inconsistent with the provisions of the Act or this part or the 
procedures thereunder prescribed by the Department, the terms and 
conditions of the applicable State law which apply to claims for, and 
the payment of, State unemployment compensation shall apply to claims 
for, and the payment of, UCFE and claims for waiting period credit. The 
provisions of the applicable State law which shall apply include, but 
are not limited to:
    (1) Claim filing and reporting;
    (2) Information to individuals, as appropriate;
    (3) Notices to individuals and Federal agencies, as appropriate, 
including notice to each individual of each determination and 
redetermination of eligibility for or entitlement to UCFE;
    (4) Determinations and redeterminations;
    (5) Ability to work, availability for work, and search for work; and
    (6) Disqualifications.
    (b) IBPP. The Interstate Benefit Payment Plan shall apply, where 
appropriate, to individuals filing claims for UCFE.
    (c) Wage combining. The State's provisions complying with the 
Interstate Arrangement for Combining Employment and Wages (part 616 of 
this chapter) shall apply, where appropriate, to individuals filing 
claims for UCFE.
    (d) Procedural requirements. The provisions of the applicable State 
law which apply hereunder to claims for and the payment of UCFE shall be 
applied consistently with the requirements of title III of the Social 
Security Act and the Federal Unemployment Tax Act which are pertinent in 
the case of State unemployment compensation, including but not limited 
to those standards and requirements specifically referred to in the 
provisions of this part, except as provided in paragraph (f) of Sec. 
609.6.



Sec. 609.10  Restrictions on entitlement.

    (a) Disqualification. If the week of unemployment for which an 
individual claims UCFE is a week to which a disqualification for State 
unemployment compensation applies under the applicable State law, or 
would apply but for the fact that the individual has no right to such 
compensation, the individual shall not be entitled to a payment of UCFE 
for that week.
    (b) Allocation of terminal annual leave payments. Lump-sum terminal 
annual leave payments shall not be allocated by a Federal agency and 
shall be allocated by a State agency in the same manner as similar 
payments to individuals employed by private employers are allocated 
under the applicable State law. In a State in which a private employer 
has an option as to the period to which such payments shall be 
allocated, such payments shall be allocated to the date of separation 
from employment.

[[Page 48]]



Sec. 609.11  Overpayments; penalties for fraud.

    (a) False statements and representations. Section 8507(a) of the Act 
provides that if a State agency, the Department, or a court of competent 
jurisdiction finds that an individual--
    (1) Knowingly has made, or caused to be made by another, a false 
statement or representation of a material fact, or knowingly has failed, 
or caused another to fail, to disclose a material fact; and
    (2) As a result of that action has received an amount as UCFE to 
which the individual was not entitled; the individual shall repay the 
amount to the State agency or the Department. Instead of requiring 
repayments, the State agency or the Department may recover the amount by 
deductions from UCFE payable to the individual during the 2-year period 
after the date of the finding. A finding by a State agency or the 
Department may be made only after an opportunity for a fair hearing, 
subject to such further review as may be appropriate under Sec. 609.7.
    (b) Prosecution for fraud. Section 1919 of title 18, United States 
Code, provides that whoever makes a false statement or representation of 
a material fact knowing it to be false, or knowingly fails to disclose a 
material fact, to obtain or increase for himself or for any other 
individual any payment authorized to be paid under chapter 85 of title 
5, United States Code, or under an agreement thereunder, shall be fined 
not more than $1,000 or imprisoned not more than one year, or both.
    (c) Absence of fraud. If a State agency or court of competent 
jurisdiction finds that an individual has received a payment of UCFE to 
which the individual was not entitled under the Act and this part, which 
was not due to a false statement or representation as provided in 
paragraph (a) or (b) of this section, the individual shall be liable to 
repay to the applicable State the total sum of the payment to which the 
individual was not entitled, and the State agency shall take all 
reasonable measures authorized under any State law or Federal law to 
recover for the account of the United States the total sum of the 
payment to which the individual was not entitled.
    (d) Recovery by offset. (1) The State agency shall recover, insofar 
as is possible, the amount of any overpayment which is not repaid by the 
individual, by deductions from any UCFE payable to the individual under 
the Act and this part, or from any unemployment compensation payable to 
the individual under any Federal unemployment compensation law 
administered by the State agency, or from any assistance or allowance 
payable to the individual with respect to unemployment under any other 
Federal law administered by the State agency.
    (2) A State agency shall also recover, insofar as is possible, the 
amount of any overpayment of UCFE made to the individual by another 
State, by deductions from any UCFE payable by the State agency to the 
individual under the Act and this part, or from any unemployment 
compensation payable to the individual under any Federal unemployment 
compensation law administered by the State agency, or from any 
assistance or allowance payable to the individual with respect to 
unemployment under any other Federal law administered by the State 
agency.
    (3) Recoupment of fraudulent overpayments referred to in paragraph 
(a) of this section shall be limited to the 2-year period stated in that 
paragraph. Recoupment of fraudulent overpayments referred to in 
paragraph (b) of this section, and nonfraudulent overpayments referred 
to in paragraph (c) of this section shall be subject to any time 
limitation on recoupment provided for in the State law that applies to 
the case.
    (e) Debts due the United States. UCFE payable to an individual shall 
be applied by the State agency for the recovery by offset of any debt 
due to the United States from the individual, but shall not be applied 
or used by the State agency in any manner for the payment of any debt of 
the individual to any State or any other entity or person except 
pursuant to a court order for child support or alimony in accordance 
with the law of the State and section 459 of the Social Security Act, 42 
U.S.C. 659.
    (f) Application of State law. (1) Except as indicated in paragraph 
(a) of this section, any provision of State law

[[Page 49]]

that may be applied for the recovery of overpayments or prosecution for 
fraud, and any provision of State law authorizing waiver of recovery of 
overpayments of unemployment compensation, shall be applicable to UCFE.
    (2) In the case of any finding of false statement or representation 
under the Act and paragraph (a) of this section, or prosecution for 
fraud under 18 U.S.C. 1919 or pursuant to paragraph (f)(1) of this 
section, the individual shall be disqualified or penalized in accordance 
with the provisions of the applicable State law relating to fraud in 
connection with a claim for State unemployment compensation.
    (g) Final decision. Recovery of any overpayment of UCFE shall not be 
enforced by the State agency until the determination or redetermination 
establishing the overpayment has become final, or if appeal is taken 
from the determination or redetermination, until the decision after 
opportunity for a fair hearing has become final.
    (h) Procedural requirements. (1) The provisions of paragraphs (c), 
(d), and (g) of Sec. 609.6 shall apply to determinations and 
redeterminations made pursuant to this section.
    (2) The provisions of Sec. 609.7 shall apply to determinations and 
redeterminations made pursuant to this section.
    (i) Fraud detection and prevention. Provisions in the procedures of 
each State with respect to detection and prevention of fraudulent 
overpayments of UCFE shall be, as a minimum, commensurate with the 
procedures adopted by the State with respect to State unemployment 
compensation and consistent with the Secretary's ``Standard for Fraud 
and Overpayment Detection'' (Employment Security Manual, part V, section 
7510 et seq.).
    (j) Recovered overpayments. An amount repaid or recouped under this 
section shall be--
    (1) Deposited in the fund from which payment was made, if the 
repayment was to a State agency; or
    (2) Returned to the Treasury of the United States and credited to 
the current applicable appropriation, fund, or account from which 
payment was made, if the repayment was to the Department.



Sec. 609.12  Inviolate rights to UCFE.

    Except as specifically provided in this part, the rights of 
individuals to UCFE shall be protected in the same manner and to the 
same extent as the rights of persons to State unemployment compensation 
are protected under the applicable State law. Such measures shall 
include protection of applicants for UCFE from waiver, release, 
assignment, pledge, encumbrance, levy, execution, attachment, and 
garnishment of their rights to UCFE, except as provided in Sec. 609.11. 
In the same manner and to the same extent, individuals shall be 
protected from discrimination and obstruction in regard to seeking, 
applying for, and receiving any right to UCFE.



Sec. 609.13  Recordkeeping; disclosure of information.

    (a) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the UCFE Program as the Department 
requires, and will make all such records available for inspection, 
examination, and audit by such Federal officials or employees as the 
Department may designate or as may be required by law.
    (b) Disclosure of Information. Information in records maintained by 
a State agency in administering the UCFE Program shall be kept 
confidential, and information in such records may be disclosed only in 
the same manner and to the same extent as information with respect to 
State unemployment compensation and the entitlement of individuals 
thereto may be disclosed under the applicable State law. This provision 
on the confidentiality of information maintained in the administration 
of the UCFE Program shall not apply, however, to the Department or for 
the purposes of Sec. Sec. 609.11 or 609.13, or in the case of 
information, reports and studies required pursuant to Sec. Sec. 609.17 
or 609.25, or where the result would be inconsistent with the Freedom of 
Information Act (5 U.S.C. 552), the Privacy Act of 1974 (5 U.S.C. 552a), 
or regulations of the Department promulgated thereunder.



Sec. 609.14  Payments to States.

    (a) State entitlement. Each State is entitled to be paid by the 
United States

[[Page 50]]

with respect to each individual whose base period wages included Federal 
wages, an amount bearing the same ratio to the total amount of 
compensation paid to such individual as the amount of the individual's 
Federal wages in the individual's base period bears to the total amount 
of the individual's base period wages.
    (b) Payment. Each State shall be paid, either in advance or by way 
of reimbursement, as may be determined by the Department, the sum that 
the Department estimates the State is entitled to receive under the Act 
and this part for each calendar month. The sum shall be reduced or 
increased by the amount which the Department finds that its estimate for 
an earlier calendar month was greater or less than the sum which should 
have been paid to the State. An estimate may be made on the basis of a 
statistical, sampling, or other method agreed on by the Department and 
the State agency.
    (c) Certification by the Department. The Department, from time to 
time, shall certify to the Secretary of the Treasury the sum payable to 
each State under this section. The Secretary of the Treasury, before 
audit or settlement by the General Accounting Office, shall pay the 
State in accordance with the certification from the funds for carrying 
out the purposes of the Act and this part.
    (d) Use of money. Money paid a State under the Act and this part may 
be used solely for the purposes for which it is paid. Money so paid 
which is not used solely for these purposes shall be returned, at the 
time specified by the Agreement, to the Treasury of the United States 
and credited to the current applicable appropriation, fund, or account 
from which payments to states under the Act and this part may be made.



Sec. 609.15  Public access to Agreements.

    The State agency of a State will make available to any individual or 
organization a true copy of the Agreement with the State for inspection 
and copying. Copies of an Agreement may be furnished on request to any 
individual or organization upon payment of the same charges, if any, as 
apply to the furnishing of copies of other records of the State agency.



Sec. 609.16  Administration in absence of an Agreement.

    (a) Administering Program. The Department shall administer the UCFE 
Program through personnel of the Department or through other 
arrangements under procedures prescribed by the Department, in the case 
of any State which does not have an Agreement with the Secretary as 
provided for in 5 U.S.C. 8502. The procedures prescribed by the 
Department under this section shall be consistent with the Act and this 
part.
    (b) Applicable State law. On the filing by an individual of a claim 
for UCFE in accordance with arrangements under this section, UCFE shall 
be paid to the individual, if eligible, in the same amount, on the same 
terms, and subject to the same conditions as would be paid to the 
individual under the applicable State law if the individual's Federal 
civilian service and Federal wages had been included as employment and 
wages under the State law. Any such claim shall include the individual's 
Federal civilian service and Federal wages, combined with any service 
and wages covered by State law. However, if the individual, without 
regard to his or her Federal civilian service and Federal wages, has 
employment or wages sufficient to qualify for compensation during the 
benefit year under that State law, then payments of UCFE under this 
section may be made only on the basis of the individual's Federal 
civilian service and Federal wages.
    (c) Fair hearing. An individual whose claim for UCFE is denied under 
this section is entitled to a fair hearing under rules of procedure 
prescribed by the Department. A final determination by the Department 
with respect to entitlement to UCFE under this section is subject to 
review by the courts in the same manner and to the same extent as is 
provided by section 205(g) of the Social Security Act, 42 U.S.C. 405(g).

[[Page 51]]



Sec. 609.17  Information, reports, and studies.

    State agencies shall furnish to the Department such information and 
reports and conduct such studies as the Department determines are 
necessary or appropriate for carrying out the purposes of the UCFE 
Program.



             Subpart C_Responsibilities of Federal Agencies



Sec. 609.20  Information to Federal civilian employees.

    Each Federal agency shall:
    (a) Furnish information to its employees as to their rights and 
responsibilities under the UCFE Program and 18 U.S.C. 1919; and
    (b) Furnish a completed copy of a form approved by the Department, 
``Notice to Federal Employee About Unemployment Compensation,'' in 
accordance with instructions thereon, to each employee at the time of 
separation from Federal civilian service, when transferred from one 
payroll office to another, or when the office responsible for 
distribution of the form is advised that an individual is in nonpay 
status for seven consecutive days or more.



Sec. 609.21  Findings of Federal agency.

    (a) Answering request. Within four workdays after receipt from a 
State agency of a request for Federal findings on a form furnished by 
the State agency, and prescribed by the Department, a Federal agency 
shall make such Federal findings, complete all copies of the form, and 
transmit the completed copies to the State agency. If documents 
necessary for completion of the form have been assigned to an agency 
records center or the Federal Records Center in St. Louis, the Federal 
agency shall obtain the necessary information from the records center. 
Any records center shall give priority to such a request.
    (b) Failure to meet time limit. If a completed form containing the 
Federal agency's findings cannot be returned within four workdays of 
receipt, the Federal agency immediately shall inform the State agency, 
and shall include an estimated date by which the completed form will be 
returned.
    (c) Administrative control. Each Federal agency shall maintain a 
control of all requests for Federal findings received by it, and the 
Federal agency's response to each request. The records shall be 
maintained so as to enable the Federal agency to ascertain at any time 
the number of such forms that have not been returned to State agencies, 
and the dates of the Federal agency's receipt of such unreturned forms.



Sec. 609.22  Correcting Federal findings.

    If a Federal agency ascertains at any time within one year after it 
has returned a completed form reporting its findings, that any of its 
findings were erroneous, it shall promptly correct its error and forward 
its corrected findings to the State agency.



Sec. 609.23  Furnishing additional information.

    On receipt of a request for additional information from a State 
agency, a Federal agency shall consider the information it supplied 
initially in connection with such request and shall review its findings. 
The Federal agency promptly shall forward to the State agency such 
additional findings as will respond to the request. The Federal agency 
shall, if possible, respond within four workdays after the receipt of a 
request under this section.



Sec. 609.24  Reconsideration of Federal findings.

    On receipt of a request for reconsideration of Federal findings from 
a State agency, the Federal agency shall consider the initial 
information supplied in connection with such request and shall review 
its findings. The Federal agency shall correct any errors or omissions 
in its findings and shall affirm, modify, or reverse any or all of its 
findings in writing. The Federal agency promptly shall forward its 
reconsidered findings to the requesting authority. The Federal agency 
shall, if possible, respond within four workdays after the receipt of a 
request under this section.

[[Page 52]]



Sec. 609.25  Furnishing other information.

    (a) Additional Information. In addition to the information required 
by Sec. Sec. 609.21, 609.22, 609.23, and 609.24, a Federal agency shall 
furnish to a State agency or the Department, within the time requested, 
any information which it is not otherwise prohibited from releasing by 
law, which the Department determines is necessary for the administration 
of the UCFE Program.
    (b) Reports. Federal agencies shall furnish to the Department or 
State agencies such reports containing such information as the 
Department determines are necessary or appropriate for carrying out the 
purposes of the UCFE Program.



Sec. 609.26  Liaison with Department.

    To facilitate the Department's administration of the UCFE Program, 
each Federal agency shall designate one or more of its officials to be 
the liaison with the Department. Each Federal agency will inform the 
Department of its designation(s) and of any change in a designation.



PART 614_UNEMPLOYMENT COMPENSATION FOR EX-SERVICEMEMBERS--Table of 
Contents




                      Subpart A_General Provisions

Sec.
614.1 Purpose and application.
614.2 Definitions of terms.

                 Subpart B_Administration of UCX Program

614.3 Eligibility requirements for UCX.
614.4 Weekly and maximum benefit amounts.
614.5 Claims for UCX.
614.6 Determinations of entitlement; notices to individual and Federal 
          military agency.
614.7 Appeal and review.
614.8 The applicable State for an individual.
614.9 Provisions of State law applicable to UCX claims.
614.10 Restrictions on entitlement.
614.11 Overpayments; penalties for fraud.
614.12 Schedules of remuneration.
614.13 Inviolate rights to UCX.
614.14 Recordkeeping; disclosure of information.
614.15 Payments to States.
614.16 Public access to Agreements.
614.17 Administration in absence of an Agreement.
614.18 Information, reports, and studies.

   Subpart C_Responsibilities of Federal Military Agencies and State 
                                Agencies

614.20 Information to ex-servicemembers.
614.21 Findings of Federal military agency.
614.22 Correcting Federal findings.
614.23 Finality of findings.
614.24 Furnishing other information.
614.25 Liaison with Department

Appendix A to Part 614--Standard for Claim Filing, Claimant Reporting, 
          Job Finding, and Employment Services
Appendix B to Part 614--Standard for Claim Determination--Separation 
          Information
Appendix C to Part 614--Standard for Fraud and Overpayment Detection

    Authority: 5 U.S.C. 8508; Secretary's Order No. 4-75 (40 FR 18515).

    Source: 47 FR 54697, Dec. 3, 1982, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 614.1  Purpose and application.

    (a) Purpose. Subchapter II of chapter 85, title 5 of the United 
States Code (5 U.S.C. 8521-8525) provides for a permanent program of 
unemployment compensation for unemployed individuals separated from the 
Armed Forces. The unemployment compensation provided for in subchapter 
II is hereinafter referred to as Unemployment Compensation for Ex-
servicemembers, or UCX. The regulations in this part are issued to 
implement the UCX Program.
    (b) First rule of construction. The Act and the implementing 
regulations in this part shall be construed liberally so as to carry out 
the purposes of the Act.
    (c) Second rule of construction. The Act and the implementing 
regulations in this part shall be construed so as to assure insofar as 
possible the uniform interpretation and application of the Act 
throughout the United States.
    (d) Effectuating purpose and rules of construction. (1) In order to 
effectuate the provisions of this section, each State agency shall 
forward to the United States Department of Labor (hereafter Department), 
not later than 10 days after issuance, a copy of each judicial or 
administrative decision ruling on an individual's entitlement to payment 
of UCX or to credit for a waiting period. On request of the Department, 
a State agency shall forward to

[[Page 53]]

the Department a copy of any determination or redetermination ruling on 
an individual's entitlement to UCX or waiting period credit.
    (2)(i) If the Department believes that a determination, 
redetermination, or decision is inconsistent with the Department's 
interpretation of the Act or this part, the Department may at any time 
notify the State agency of the Department's view. Thereafter, the State 
agency shall issue a redetermination or appeal if possible, and shall 
not follow such determination, redetermination, or decision as a 
precedent; and, in any subsequent proceedings which involve such 
determination, redetermination, or decision, or wherein such 
determination, redetermination, or decision is cited as precedent or 
otherwise relied upon, the State agency shall inform the claims deputy 
or hearing officer or court of the Department's view and shall make all 
reasonable efforts, including appeal or other proceedings in an 
appropriate forum, to obtain modification, limitation, or overruling of 
the determination, redetermination, or decision.
    (ii) If the Department believes that a State agency has failed to 
use, or use in a timely manner, the crossmatch mechanism at the claims 
control center designated by the Department, the Department may at any 
time notify the State of the Department's view. Thereafter, the State 
agency shall take action to ensure that operable procedures for the 
effective utilization of the claims control center are in place and 
adhered to. In any case of any determination, redetermination, or 
decision that is not legally warranted under the Act or this part had 
the State used, or used in a timely manner, the crossmatch mechanism at 
the claims control center designated by the Department, State agency 
shall take the steps outlined in paragraph (d)(2)(i) of this section.
    (3) If the Department believes that a determination, 
redetermination, or decision is patently and flagrantly violative of the 
Act or this part, the Department may at any time notify the State agency 
of the Department's view. If the determination, redetermination, or 
decision in question denies UCX to a claimant, the steps outlined in 
paragraph (2) above shall be followed by the State agency. If the 
determination, redetermination, or decision in question awards UCX to a 
claimant, the benefits are ``due'' within the meaning of section 
303(a)(1) of the Social Security Act, 42 U.S.C. 503(a)(1), and therefore 
must be paid promptly to the claimant. However, the State agency shall 
take the steps outlined in paragraph (d)(2) of this section, and 
payments to the claimant may be temporarily delayed if redetermination 
or appeal action is taken not more than one business day following the 
day on which the first payment otherwise would be issued to the 
claimant; and the redetermination action is taken or appeal is filed to 
obtain a reversal of the award of UCX and a ruling consistent with the 
Department's view; and the redetermination action or appeal seeks an 
expedited redetermination or appeal within not more than two weeks after 
the redetermination action is taken or the appeal is filed. If 
redetermination action is not taken or appeal is not filed within the 
above time limit, or a redetermination or decision is not obtained 
within the two-week limit, or any redetermination or decision or order 
is issued which affirms the determination, redetermination, or decision 
awarding UCX or allows it to stand in whole or in part, the benefits 
awarded must be paid promptly to the claimant.
    (4)(i) If any determination, redetermination, or decision, referred 
to in paragraph (d)(2) or paragraph (d)(3) of this section, is treated 
as a precedent for any future UCX claim or claim under the UCFE Program 
(part 609 of this chapter), the Secretary will decide whether the 
Agreement with the State entered into under the Act shall be terminated.
    (ii) In the case of any determination, redetermination, or decision 
that is not legally warranted under the Act or this part, including any 
determination, redetermination, or decision referred to in paragraph 
(d)(2) or in paragraph (d)(3) of this section, the Secretary will decide 
whether the State shall be required to restore the funds of the United 
States for any sums paid under such a determination, redetermination, or 
decision, and whether, in absence of such restoration, the Agreement 
with

[[Page 54]]

the State shall be terminated and whether other action shall be taken to 
recover such sums for the United States.
    (5) A State agency may request reconsideration of a notice issued 
pursuant to paragraph (d)(2) or paragraph (d)(3) of this section, and 
shall be given an opportunity to present views and arguments if desired.
    (6) Concurrence of the Department in a determination, 
redetermination, or decision shall not be presumed from the absence of a 
notice issued pursuant to this section.

(Approved by the Office of Management and Budget under control number 
1205-0163)

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40553, Oct. 17, 1988; 53 
FR 43799, Oct. 26, 1988; 57 FR 59799, Dec. 15, 1992]



Sec. 614.2  Definitions of terms.

    For purposes of the Act and this part:
    (a) Act means subchapter II of chapter 85 of title 5 of the United 
States Code, 5 U.S.C. 8521-8525.
    (b) Agreement means the Agreement entered into pursuant to 5 U.S.C. 
8502 between a State and the Secretary under which the State agency of 
the State agrees to make payments of unemployment compensation in 
accordance with the Act and the regulations and procedures thereunder 
prescribed by the Department.
    (c) Base period means the base period as defined by the applicable 
State law for the benefit year.
    (d) Benefit year means the benefit year as defined by the applicable 
State law, and if not so defined the term means the period prescribed in 
the Agreement with the State or, in the absence of an Agreement, the 
period prescribed by the Department.
    (e) Ex-servicemember means an individual who has performed Federal 
military service.
    (f) Federal military agency means any of the Armed Forces of the 
United States, including the Army, Air Force, Navy, Marine Corps, and 
Coast Guard, and the National Oceanic and Atmospheric Administration 
(Department of Commerce).
    (g) Federal military service means active service (not including 
active duty in a reserve status unless for a continuous period of 90 
days or more) in the Armed Forces or the Commissioned Corps of the 
National Oceanic and Atmospheric Administration if with respect to that 
service--
    (1) The individual was discharged or released under honorable 
conditions (and, if an officer, did not resign for the good of the 
service); and
    (2)(i) The individual was discharged or released after completing 
his/her first full term of active service which the individual initially 
agreed to serve, or
    (ii) The individual was discharged or released before completing 
such term of active service--
    (A) For the convenience of the Government under an early release 
program,
    (B) Because of medical disqualification, pregnancy, parenthood, or 
any service-incurred injury or disability,
    (C) Because of hardship, or
    (D) Because of personality disorders or inaptitude but only if the 
service was continuous for 365 days or more.
    (h) Federal military wages means all pay and allowances in cash and 
in kind for Federal military service, computed on the basis of the pay 
and allowances for the pay grade of the individual at the time of his or 
her latest discharge or release from Federal/military service, as 
determined in accordance with the Schedule of Remuneration applicable at 
the time the individual files his or her first claim for compensation 
for a benefit year.
    (i) First claim means an initial claim for unemployment compensation 
under the UCX Program, the UCFE Program (part 609 of this chapter), or a 
State law, or some combination thereof, first filed by an individual 
after the individual's latest discharge or release from Federal military 
service, whereby a benefit year is established under an applicable State 
law.
    (j) Military document means an official document or documents issued 
to an individual by a Federal military agency relating to the 
individual's Federal military service and discharge or release from such 
service.
    (k) Period of active service means a period of continuous active 
duty (including active duty for training purposes) in a Federal military 
agency or agencies, beginning with the date of entry

[[Page 55]]

upon active duty and ending on the effective date of the first discharge 
or release thereafter which is not qualified or conditional.
    (l) Schedule of Remuneration means the schedule issued by the 
Department from time to time under 5 U.S.C. 8521(a)(2) and this part, 
which specifies for purposes of the UCX Program, the pay and allowances 
for each pay grade of servicemember.
    (m) Secretary means the Secretary of Labor of the United States.
    (n) State means the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the Virgin Islands.
    (o) State agency means the agency of the State which administers the 
applicable State unemployment compensation law and is administering the 
UCX Program in the State pursuant to an Agreement with the Secretary.
    (p)(1) State law means the unemployment compensation law of a State 
approved by the Secretary under section 3304 of the Internal Revenue 
Code of 1986, 26 U.S.C. 3304, if the State is certified under section 
3304(c) of the Internal Revenue Code of 1986, 26 U.S.C. 3304(c).
    (2) Applicable State law means the State law made applicable to a 
UCX claimant by Sec. 614.8.
    (q)(1) Unemployment compensation means cash benefits (including 
dependents' allowances) payable to individuals with respect to their 
unemployment, and includes regular, additional, emergency, and extended 
compensation.
    (2) Regular compensation means unemployment compensation payable to 
an individual under any State law, but not including additional 
compensation or extended compensation.
    (3) Additional compensation means unemployment compensation totally 
financed by a State and payable under a State law by reason of 
conditions of high unemployment or by reason of other special factors.
    (4) Emergency compensation means supplementary unemployment 
compensation payable under a temporary Federal law after exhaustion of 
regular and extended compensation.
    (5) Extended compensation means unemployment compensation payable to 
an individual for weeks of unemployment in an extended benefit period, 
under those provisions of a State law which satisfy the requirements of 
the Federal-State Extended Unemployment Compensation Act of 1970, as 
amended, 26 U.S.C. 3304 note, and part 615 of this chapter, with respect 
to the payment of extended compensation.
    (r) Unemployment Compensation for Ex-Servicemember means the 
unemployment compensation payable under the Act to claimants eligible 
for the payments, and is referred to as UCX.
    (s) Week means, for purposes of eligibility for and payment of UCX, 
a week as defined in the applicable State law.
    (t) Week of unemployment means a week of total, part-total, or 
partial unemployment as defined in the applicable State law, which shall 
be applied in the same manner and to the same extent to all employment 
and earnings, and in the same manner and to the same extent for the 
purposes of the UCX Program, as if the individual filing for UCX were 
filing a claim for State unemployment compensation.

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988; 53 
FR 43799, Oct. 26, 1988; 57 FR 59799, Dec. 15, 1992]



                 Subpart B_Administration of UCX Program



Sec. 614.3  Eligibility requirements for UCX.

    An individual shall be eligible to receive a payment of UCX or 
waiting period credit with respect to a week of unemployment if:
    (a) The individual has Federal military service and Federal military 
wages in the base period under the applicable State law;
    (b) The individual meets the qualifying employment and wage 
requirements of the applicable State law, either on the basis of Federal 
military service and Federal military wages alone or in combination with 
service and wages covered under a State law or under the UCFE Program 
(part 609 of this chapter);
    (c) The individual has filed an initial claim for UCX and, as 
appropriate, has filed a timely claim for waiting period credit or 
payment of UCX with respect to that week of unemployment; and

[[Page 56]]

    (d) The individual is totally, part-totally, or partially 
unemployed, and is able to work, available for work, and seeking work 
within the meaning of or as required by the applicable State law, and is 
not subject to disqualification under this part or the applicable State 
law, with respect to that week of unemployment.

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988; 57 
FR 59799, Dec. 15, 1992]



Sec. 614.4  Weekly and maximum benefit amounts.

    (a) Total unemployment. The weekly amount of UCX payable to an 
eligible individual for a week of total unemployment shall be the amount 
that would be payable to the individual as unemployment compensation for 
a week of total unemployment as determined under the applicable State 
law.
    (b) Partial and part-total unemployment. The weekly amount of UCX 
payable for a week of partial or part-total unemployment shall be the 
amount that would be payable to the individual as unemployment 
compensation for a week of partial or part-total unemployment as 
determined under the applicable State law.
    (c) Maximum amount. The maximum amount of UCX which shall be payable 
to an eligible individual during and subsequent to the individual's 
benefit year shall be the maximum amount of all unemployment 
compensation that would be payable to the individual as determined under 
the applicable State law.
    (d) Computation rules. The weekly and maximum amounts of UCX payable 
to an individual under the UCX Program shall be determined under the 
applicable State law to be in the same amount, on the same terms, and 
subject to the same conditions as the State unemployment compensation 
which would be payable to the individual under the applicable State law 
if the individual's Federal military service and Federal military wages 
assigned or transferred under this part to the State had been included 
as employment and wages covered by that State law, subject to the use of 
the applicable Schedule of Remuneration.

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988; 57 
FR 59800, Dec. 15, 1992]



Sec. 614.5  Claims for UCX.

    (a) First claims. A first claim for UCX shall be filed by an 
individual in any State agency of any State according to the applicable 
State law, and on a form prescribed by the Department which shall be 
furnished to the individual by the State agency where the claim is 
filed.
    (b) Weekly claims. Claims for waiting week credit and payments of 
UCX for weeks of unemployment shall be filed in any State agency (or 
Canada) at the times and in the manner as claims for State unemployment 
compensation are filed under the applicable State law, and on forms 
prescribed by the Department which shall be furnished to the individual 
by the State agency where the claim is filed.
    (c) Secretary's standard. The procedures for reporting and filing 
claims for UCX and waiting period credit shall be consistent with this 
part 614 and the Secretary's ``Standard for Claim Filing, Claimant 
Reporting, Job Finding and Employment Services'' in the Employment 
Security Manual, part V, sections 5000-5004 (appendix A of this part).

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988]



Sec. 614.6  Determinations of entitlement; notices to individual and 
Federal military agency.

    (a) Determinations of first claim. Except for findings of a Federal 
military agency and the applicable Schedule of Remuneration which are 
final and conclusive under Sec. 614.23, the State agency whose State 
law applies to an individual under Sec. 614.8 shall, promptly upon the 
filing of a first claim for UCX, determine whether the individual is 
otherwise eligible, and, if the individual is found to be eligible, the 
individual's benefit year and the weekly and maximum amounts of UCX 
payable to the individual.
    (b) Determinations of weekly claims. The State agency promptly 
shall, upon the filing of a claim for a payment of

[[Page 57]]

UCX or waiting period credit with respect to a week, determine whether 
the individual is entitled to a payment of UCX or waiting period credit 
respect to such week, and, if entitled, the amount of UCX or waiting 
period credit to which the individual is entitled.
    (c) Redetermination. The provisions of the applicable State law 
concerning the right to request, or authority to undertake, 
reconsideration of a determination pertaining to State unemployment 
compensation under the applicable State law shall apply to 
determinations pertaining to UCX.
    (d) Notices to individual and Federal military agency. (1) The State 
agency promptly shall give notice in writing to the individual of any 
determination or redetermination of a first claim, and, except as may be 
authorized under paragraph (g) of this section, of any determination or 
redetermination of any weekly claim which denies UCX or waiting period 
credit or reduces the weekly amount or maximum amount initially 
determined to be payable. Each notice of determination or 
redetermination shall include such information regarding the 
determination or redetermination and notice of right to reconsideration 
or appeal, or both, as is furnished with written notices of 
determinations and redeterminations with respect to claims for State 
unemployment compensation. Such notice shall include the findings of any 
Federal military agency utilized in making the determination or 
redetermination, and shall inform the individual of the finality of 
Federal findings and the individual's right to request correction of 
such findings as is provided in Sec. 614.22.
    (2) A notice of claim filing and subsequent notices of monetary and 
nonmonetary determinations on a UCX claim shall be sent to each Federal 
military agency for which the individual performed Federal military 
service during the appropriate base period, together with notice of 
appeal rights of the Federal military agency to the same extent that 
chargeable employers are given such notices under State law and practice 
unless an alternate mechanism is established by the Department of Labor 
in lieu of such notices.
    (e) Obtaining information for claim determinations. (1) Information 
required for the determination of claims for UCX shall be obtained by 
the State agency from claimants, employers, and others, in the same 
manner as information is obtained for claim purposes under the 
applicable State law, but Federal military findings shall be obtained 
from military documents, the applicable Schedule of Remuneration, and 
from Federal military agencies as prescribed in Sec. Sec. 614.21 
through 614.24.
    (f) Promptness. Full payment of UCX when due shall be consistent 
with this part and shall be made with the greatest promptness that is 
administratively feasible, but the provisions of part 640 of this 
chapter (relating to promptness of benefit payments) shall not be 
applicable to the UCX Program.
    (g) Secretary's standard. The procedures for making determinations 
and redeterminations, and furnishing written notices of determinations, 
redeterminations, and rights of appeal to individuals appying for UCX 
and to appropriate Federal military agencies shall be consisent with 
this part 614 and the Secretary's ``Standard for Claim Determinations-
Separation Information'' in the Employment Security Manual, part V, 
sections 6010-6015 (Appendix B of this part).

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40554, Oct. 17, 1988]



Sec. 614.7  Appeal and review.

    (a) Applicable State Law. The provisions of the applicable State law 
concerning the right of appeal and fair hearing from a determination or 
redetermination of entitlement to State unemployment compensation 
(exclusive of findings which are final and conclusive under Sec. 
614.25) shall apply to determinations and redeterminations of 
eligibility for or entitlement to UCX and waiting period credit. Any 
such determination or redetermination shall be subject to appeal and 
review only in the manner and to the extent provided in the applicable 
State law with respect to determinations and redeterminations of 
entitlement to State unemployment compensation.

(Section 614.24 governs appeals of findings of the Veterans 
Administration)


[[Page 58]]


    (b) Rights of appeal and fair hearing. The provisions on right of 
appeal and opportunity for a fair hearing with respect to claims for UCX 
shall be consistent with this part and with sections 303(a)(1) and 
303(a)(3) of the Social Security Act, 42 U.S.C. 503(a)(1) and 503(a)(3).
    (c) Promptness on appeals. (1) Decisions on appeals under the UCX 
Program shall accord with the Secretary's ``Standard for Appeals 
Promptness--Unemployment Compensation'' in part 650 of this chapter, and 
with Sec. 614.1(d).
    (2) Any provision of an applicable State law for advancement or 
priority of unemployment compensation cases on judicial calendars, or 
otherwise intended to provide for the prompt payment of unemployment 
compensation when due, shall apply to proceedings involving claims for 
UCX.
    (d) Appeal and review by Federal military agency. If a Federal 
military agency believes that a State agency's determination or 
redetermination of an individual's eligibility for or entitlement to UCX 
is incorrect, the Federal military agency may seek appeal and review of 
such determination or redetermination in the same manner as an 
interested employer may seek appeal and review under the applicable 
State law.



Sec. 614.8  The applicable State for an individual.

    (a) The applicable State. The applicable State for an individual 
shall be the State to which the individual's Federal military service 
and Federal military wages are assigned or transferred under this 
section. The applicable State law for the individual shall be the State 
law of such State.
    (b) Assignment of service and wages. (1) When an individual files a 
first claim, all of the individual's Federal military service and 
Federal military wages shall be deemed to be assigned to the State in 
which such claim is filed, which shall be the ``Paying State'' in the 
case of a combined-wage claim. (Sec. 616.6(e) of this chapter.)
    (2) Federal military service and Federal military wages assigned to 
a State in error shall be reassigned for use by the proper State agency. 
An appropriate record of the reassignment shall be made by the State 
agency which makes the reassignment.
    (c) Assignment deemed complete. All of an individual's Federal 
military service and Federal military wages shall be deemed to have been 
assigned to a State upon the filing of a first claim. Federal military 
service and Federal military wages shall be assigned to a State only in 
accordance with paragraph (b) of this section.
    (d) Use of assigned service and wages. All assigned Federal military 
service and Federal military wages shall be used only by the State to 
which assigned in accordance with paragraph (b) of this section, except 
that any Federal military service and Federal military wages which are 
not within the base period of the State to which they were assigned 
shall be subject to transfer in accordance with part 616 of this chapter 
for the purposes of any subsequent Combined-Wage Claim filed by the 
individual.



Sec. 614.9  Provisions of State law applicable to UCX claims.

    (a) Particular provisions applicable. Except where the result would 
be inconsistent with the provisions of the Act or this part or the 
procedures thereunder prescribed by the Department, the terms and 
conditions of the applicable State law which apply to claims for, and 
the payment of, State unemployment compensation shall apply to claims 
for, and the payment of, UCX and claims for waiting period credit. The 
provisions of the applicable State law which shall apply include, but 
are not limited to:
    (1) Claim filing and reporting;
    (2) Information to individuals, as appropriate;
    (3) Notices to individuals, as appropriate, including notice to each 
individual of each determination and redetermination of eligibility for 
or entitlement to UCX;
    (4) Determinations and redeterminations;
    (5) Ability to work, availability for work, and search for work; and
    (6) Disqualifications, except in regard to separation from any 
Federal military agency.

[[Page 59]]

    (b) IBPP. The Interstate Benefit Payment Plan shall apply, where 
appropriate, to individuals filing claims for UCX.
    (c) Wage combining. The State's provisions complying with the 
Interstate Arrangement for Combining Employment and Wages (part 616 of 
this chapter) shall apply, where appropriate, to individuals filing 
claims for UCX.
    (d) Procedural requirements. The provisions of the applicable State 
law which apply hereunder to claims for and the payment of UCX shall be 
applied consistently with the requirements of title III of the Social 
Security Act and the Federal Unemployment Tax Act which are pertinent in 
the case of State unemployment compensation, including but not limited 
to those standards and requirements specifically referred to in the 
provisions of this part, except as provided in paragraph (f) of Sec. 
614.6.



Sec. 614.10  Restrictions on entitlement.

    (a) Disqualification. If the week of unemployment for which an 
individual claims UCX is a week to which a disqualification for State 
unemployment compensation applies under the applicable State law, the 
individual shall not be entitled to a payment of UCX for that week. As 
provided in Sec. 614.9(a), no disqualification shall apply in regard to 
separation from any Federal military agency.
    (b) Effect of ``days lost''. The continuity of a period of an 
individual's Federal military service shall not be deemed to be 
interrupted by reason of any ``days lost'' in such period, but ``days 
lost'' shall not be counted for purposes of determining:
    (1) Whether an individual has performed Federal military service;
    (2) Whether an individual meets the wage and employment requirements 
of a State law; or
    (3) The amount of an individual's Federal military wages.
    (c) Allocation of military accrued leave. A State agency shall 
allocate the number of days of unused military leave specified in an ex-
servicemember's military document, for which a lump-sum payment has been 
made, in the same manner as similar payments by private employers to 
their employees are allocated under the applicable State law, except 
that the applicable Schedule of Remuneration instead of the lump-sum 
payment shall be used to determine the amount of the claimant's Federal 
military wages. In a State in which a private employer has an option as 
to the period to which such payments shall be allocated, such payments 
shall be allocated to the date of the individual's latest discharge or 
release from Federal military service. An allocation under this 
paragraph shall be disregarded in determining whether an individual has 
had a period of active service constituting Federal military service.
    (d) Education and training allowances. An individual is not entitled 
to UCX under the Act or this part for a period with respect to which the 
individual receives:
    (1) A subsistence allowance for vocational rehabilitation training 
under chapter 31 of title 38 of the United States Code, 38 U.S.C. 1501 
et seq., or under part VIII of Veterans Regulation Numbered 1(a); or
    (2) An educational assistance allowance or special training 
allowance under chapter 35 of title 38 of the United States Code, 38 
U.S.C. 1700 et seq.



Sec. 614.11  Overpayments; penalties for fraud.

    (a) False statements and representations. Section 8507(a) of the Act 
provides that if a State agency, the Department, or a court of competent 
jurisdiction finds that an individual--
    (1) Knowingly has made, or caused to be made by another, a false 
statement or representation of a material fact, or knowingly has failed, 
or caused another to fail, to disclose a material fact; and
    (2) As a result of that action has received an amount as UCX to 
which the individual was not entitled; the individual shall repay the 
amount to the State agency or the Department. Instead of requiring 
repayment, the State agency or the Department may recover the amount by 
deductions from UCX payable to the individual during the 2-year period 
after the date of the finding. A finding by a State agency or the 
Department may be made only after an opportunity for a fair hearing,

[[Page 60]]

subject to such further review as may be appropriate under Sec. 614.7.
    (b) Prosecution for fraud. Section 1919 of title 18, United States 
Code, provides that whoever makes a false statement or representation of 
a material fact knowing it to be false, or knowingly fails to disclose a 
material fact, to obtain or increase for himself or for any other 
individual any payment authorized to be paid under chapter 85 of title 
5, United States Code, or under an agreement thereunder, shall be fined 
not more than $1,000 or imprisoned not more than one year, or both.
    (c) Absence of fraud. If a State agency or court of competent 
jurisdiction finds that an individual has received a payment of UCX to 
which the individual was not entitled under the Act and this part, which 
was not due to a false statement or representation as provided in 
paragraph (a) or (b) of this section, the individual shall be liable to 
repay to the applicable State the total sum of the payment to which the 
individual was not entitled, and the State agency shall take all 
reasonable measures authorized under any State law or Federal law to 
recover for the account of the United States the total sum of the 
payment to which the individual was not entitled.
    (d) Recovery by offset. (1) The State agency shall recover, insofar 
as is possible, the amount of any overpayment which is not repaid by the 
individual, by deductions from any UCX payable to the individual under 
the Act and this part, or from any unemployment compensation payable to 
the individual under any Federal unemployment compensation law 
administered by the State agency, or from any assistance or allowance 
payable to the individual with respect to unemployment under any other 
Federal law administered by the State agency.
    (2) A State agency shall also recover, insofar as is possible, the 
amount of any overpayment of UCX made to the individual by another State 
by deductions from any UCX payable by the State agency to the individual 
under the Act and this part, or from any unemployment compensation 
payable to the individual under any Federal unemployment compensation 
law administered by the State agency, or from any assistance or 
allowance payable to the individual with respect to unemployment under 
any other Federal law administered by the State agency.
    (3) Recoupment of fraudulent overpayments referred to in paragraph 
(a) of this section shall be limited to the 2-year period stated in that 
paragraph. Recoupment of fraudulent overpayments referred to in 
paragraph (b) of this section, and nonfraudulent overpayments referred 
to in paragraph (c) of this section shall be subject to any time 
limitation on recoupment provided for in the State law that applies to 
the case.
    (e) Debts due the United States. UCX payable to an individual shall 
be applied by the State agency for the recovery by offset of any debt 
due to the United States from the individual, but shall not be applied 
or used by the State agency in any manner for the payment of any debt of 
the individual to any State or any other entity or person except 
pursuant to a court order for child support or alimony in accordance 
with the law of the State and section 459 of the Social Security Act, 42 
U.S.C. 659.
    (f) Application of State law. (1) Except as indicated in paragraph 
(a) of this section, any provision of State law that may be applied for 
the recovery of overpayments or prosecution for fraud, and any provision 
of State law authorizing waiver of recovery of overpayments of 
unemployment compensation, shall be applicable to UCX.
    (2) In the case of any finding of false statement of representation 
under the Act and paragraph (a) of this section, or prosecution for 
fraud under 18 U.S.C. 1919 or pursuant to paragraph (f)(1) of this 
section, the individual shall be disqualified or penalized in accordance 
with the provision of the applicable State law relating to fraud in 
connection with a claim for State unemployment compensation.
    (g) Final decision. Recovery of any overpayment of UCX shall not be 
enforced by the State agency until the determination or redetermination 
establishing the overpayment has become final, or if appeal is taken 
from the determination or redetermination, until the decision after 
opportunity for a fair hearing has become final.

[[Page 61]]

    (h) Procedural requirements. (1) The provisions of paragraphs (c), 
(d), and (g) of Sec. 614.6 shall apply to determinations and 
redeterminations made pursuant to this section.
    (2) The provisions of Sec. 614.7 shall apply to determinations and 
redeterminations made pursuant to this section.
    (i) Fraud detection and prevention. Provisions in the procedures of 
each State with respect to detection and prevention of fraudulent 
overpayments of UCX shall be, as a minimum, commensurate with the 
procedures adopted by the State with respect to State unemployment 
compensation and consistent with this part 614 and the Secretary's 
``Standard for Fraud and Overpayment Detection'' in the Employment 
Security Manual, part V, sections 7510-7515 (Appendix C of this part), 
and provide for timely use of any crossmatch mechanism established by 
the Department.
    (j) Recovered overpayments. An amount repaid or recouped under this 
section shall be--
    (1) Deposited in the fund from which payment was made, if the 
repayment was to a State agency; or
    (2) Returned to the Treasury of the United States and credited to 
the current applicable appropriation, fund, or account from which 
payment was made, if the repayment was to the Department.

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40555, Oct. 17, 1988]



Sec. 614.12  Schedules of remuneration.

    (a) Authority. Section 8521(a)(2) of chapter 85, title 5 of the 
United States Code, 5 U.S.C. 8521(a)(2), requires the Secretary of Labor 
to issue from time to time, after consultation with the Secretary of 
Defense, a Schedule of Remuneration specifying the pay and allowances 
for each pay grade of members of the Armed Forces.
    (b) Elements of schedule. A schedule reflects representative amounts 
for appropriate elements of the pay and allowances, whether in cash or 
kind, for each pay grade of members of the Armed Forces, with a 
statement of the effective date of the schedule. Benefit amounts for the 
UCX Program are computed on the basis of the Federal military wages for 
the pay grade of the individual at the time of the individual's latest 
discharge or release from Federal military service, as specified in the 
schedule applicable at the time the individual files his or her first 
claim for compensation for the benefit year.
    (c) Effective date. Any new Schedule of Remuneration shall take 
effect beginning with the first week of the calendar quarter following 
the calendar quarter in which such schedule is issued, and shall remain 
applicable until a subsequent schedule becomes effective. Prior 
schedules shall continue to remain applicable for the periods they were 
in effect.
    (d) Publication. Any new Schedule of Remuneration shall be issued by 
the Secretary of Labor to the State agencies and the Federal military 
agencies. Promptly after the issuance of a new Schedule of Remuneration 
it shall be published as a notice in the Federal Register.



Sec. 614.13  Inviolate rights to UCX.

    Except as specifically provided in this part, the rights of 
individuals to UCX shall be protected in the same manner and to the same 
extent as the rights of persons to State unemployment compensation are 
protected under the applicable State law. Such measures shall include 
protection of applicants for UCX from waiver, release, assignment, 
pledge, encumbrance, levy, execution, attachment, and garnishment of 
their rights to UCX, except as provided in Sec. 614.11. In the same 
manner and to the same extent, individuals shall be protected from 
discrimination and obstruction in regard to seeking, applying for, and 
receiving any right to UCX.



Sec. 614.14  Recordkeeping; disclosure of information.

    (a) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the UCX Program as the Department 
requires, and will make all such records available for inspection, 
examination, and audit by such Federal officials or employees as the 
Department may designate or as may be required by law.
    (b) Disclosure of information. Information in records maintained by 
a State

[[Page 62]]

agency in administering the UCX Program shall be kept confidential, and 
information in such records may be disclosed only in the same manner and 
to the same extent as information with respect to State unemployment 
compensation and the entitlement of individuals thereto may be disclosed 
under the applicable State law. This provision on the confidentiality of 
information maintained in the administration of the UCX Program shall 
not apply, however, to the Department or for the purposes of Sec. Sec. 
614.11 or 614.14, or in the case of information, reports and studies 
required pursuant to Sec. Sec. 614.18 or 614.26, or where the result 
would be inconsistent with the Freedom of Information Act, 5 U.S.C. 552, 
the Privacy Act of 1974, 5 U.S.C. 552a, or regulations of the Department 
promulgated thereunder.



Sec. 614.15  Payments to States.

    (a) State entitlement. Each State is entitled to be paid by the 
United States with respect to each individual whose base period wages 
included Federal military wages, an amount bearing the same ratio to the 
total amount of compensation paid to such individual as the amount of 
the individual's Federal military wages in the individual's base period 
bears to the total amount of the individual's base period wages.
    (b) Payment. Each State shall be paid, either in advance or by way 
of reimbursement, as may be determined by the Department, the sum that 
the Department estimates the State is entitled to receive under the Act 
and this part for each calendar month. The sum shall be reduced or 
increased by the amount which the Department finds that its estimate for 
an earlier calendar month was greater or less than the sum which should 
have been paid to the State. An estimate may be made on the basis of a 
statistical, sampling, or other method agreed on by the Department and 
the State agency.
    (c) Certification by the Department. The Department, from time to 
time, shall certify to the Secretary of the Treasury the sum payable to 
each State under this section. The Secretary of the Treasury, before 
audit or settlement by the General Accounting Office, shall pay the 
State in accordance with the certification from the funds for carrying 
out the purposes of the Act and this part.
    (d) Use of money. Money paid a State under the Act and this part may 
be used solely for the purposes for which it is paid. Money so paid 
which is not used solely for these purposes shall be returned, at the 
time specified by the Agreement, to the Treasury of the United States 
and credited to the current applicable appropriation, fund, or account 
from which payments to States under the Act and this part may be made.



Sec. 614.16  Public access to Agreements.

    The State agency of a State will make available to any individual or 
organization a true copy of the Agreement with the State for inspection 
and copying. Copies of an Agreement may be furnished on request to any 
individual or organization upon payment of the same charges, if any, as 
apply to the furnishing of copies of other records of the State agency.



Sec. 614.17  Administration in absence of an Agreement.

    (a) Administering program. The Department shall administer the UCX 
Program through personnel of the Department or through other 
arrangements under procedures prescribed by the Department, in the case 
of any State which does not have an Agreement with the Secretary as 
provided for in 5 U.S.C. 8502. The procedures prescribed by the 
Department under this section shall be consistent with the Act and this 
part.
    (b) Applicable State law. On the filing by an individual of a claim 
for UCX in accordance with arrangements under this section, UCX shall be 
paid to the individual, if eligible, in the same amount, on the same 
terms, and subject to the same conditions as would be paid to the 
individual under the applicable State law if the individual's Federal 
military service and Federal military wages had been included as 
employment and wages under the State law. Any such claims shall include 
the individual's Federal military service and Federal military wages, 
combined with any service and wages covered by State law. However, if 
the individual,

[[Page 63]]

without regard to his or her Federal military service and Federal 
military wages, has employment or wages sufficient to qualify for 
compensation during the benefit year under that State law, then payments 
of UCX under this section may be made only on the basis of the 
individual's Federal military service and Federal military wages.
    (c) Fair hearing. An individual whose claim for UCX is denied under 
this section is entitled to a fair hearing under rules of procedures 
prescribed by the Department. A final determination by the Department 
with respect to entitlement to UCX under this section is subject to 
review by the courts in the same manner and to the same extent as is 
provided by section 205(g) of the Social Security Act, 42 U.S.C. 405(g).



Sec. 614.18  Information, reports, and studies.

    State agencies shall furnish to the Department such information and 
reports and conduct such studies as the Department determines are 
necessary or appropriate for carrying out the purposes of the UCX 
Program.



   Subpart C_Responsibilities of Federal Military Agencies and State 
                                Agencies



Sec. 614.20  Information to ex-servicemembers.

    At the time of discharge or release from Federal military service, 
each Federal military agency shall furnish to each ex-servicemember 
information explaining rights and responsibilities under the UCX Program 
and 18 U.S.C. 1919, and military documents necessary for filing claims 
for UCX.



Sec. 614.21  Findings of Federal military agency.

    (a) Findings in military documents. Information contained in a 
military document furnished to an ex-servicemember shall constitute 
findings to which Sec. 614.23 applies as to:
    (1) Whether the individual has performed active service in the Armed 
Forces or the Commissioned Corps of the National Oceanic and Atmospheric 
Administration;
    (2) The beginning and ending dates of the period of active service 
and ``days lost'' during such period;
    (3) The type of discharge or release terminating the period of 
active service;
    (4) The individuals' pay grade at the time of discharge or release 
from active service; and
    (5) The narrative reason or other reason for separation from active 
service.
    (b) Discharges not under honorable conditions. A military document 
which shows that an individual's discharge or release was under other 
than honorable conditions shall also be a finding to which Sec. 614.23 
applies.

[53 FR 40555, Oct. 17, 1988]



Sec. 614.22  Correcting Federal findings.

    (a) Request for correction. (1) If an individual believes that a 
finding specified in Sec. 614.21 is incorrect or that information as to 
any finding has been omitted from a military document, the individual 
may request the issuing Federal military agency to correct the military 
document. A request for correction may be made through the State agency, 
which shall forward such request and any supporting information 
submitted by the individual to the Federal military agency.
    (2) The Federal military agency shall promptly forward to the 
individual or State agency making the request the corrected military 
document. Information contained in a corrected military document issued 
pursuant to such a request shall constitute the findings of the Federal 
military agency under Sec. 614.21.
    (3) If a determination or redetermination based on a finding as to 
which correction is sought has been issued by a State agency before a 
request for correction under this paragraph is made, the individual who 
requested such correction shall file a request for redetermination or 
appeal from such determination or redetermination with the State agency, 
and shall inform the State agency of the request for correction.
    (4) An individual who files a request for correction of findings 
under this paragraph shall promptly notify the State agency of the 
action of the Federal military agency on such request.

[[Page 64]]

    (b) State agency procedure when request made. (1) If a determination 
of entitlement has not been made when an individual notifies a State 
agency of a request for correction under paragraph (a) of this section, 
the State agency may postpone such determination until the individual 
has notified the State agency of the action of the Federal military 
agency on the request.
    (2) If a determination of entitlement has been made when an 
individual notifies a State agency that a request for correction of 
Federal findings has been made, or if an individual notifies a State 
agency prior to a determination of entitlement that a request has been 
made but such determination is not postponed by the State agency, the 
individual may file a request for redetermination or appeal in 
accordance with the applicable State law.
    (3) Except as provided in paragraph (c) of this section, no 
redetermination shall be made or hearing scheduled on an appeal until 
the individual has notified the State agency of the action of the 
Federal military agency on a request for correction under paragraph (a) 
of this section.
    (c) State agency procedure when request answered. On receipt of 
notice of the action of a Federal military agency on a request for 
correction of its findings, a State agency shall:
    (1) Make a timely determination or redetermination of the 
individual's entitlement, or
    (2) Promptly schedule a hearing on the individual's appeal.

If such notice is not received by a State agency within one year of the 
date on which an individual first filed a claim, or such notice is not 
given promptly by an individual, a State agency without further 
postponement may make such determination or redetermination or schedule 
such hearing.
    (d) Findings corrected without request. Information as to any 
finding specified in Sec. 614.21 contained in a corrected military 
document issued by a Federal military agency on its own motion shall 
constitute the findings of such agency under Sec. 614.21, if notice 
thereof is received by a State agency before the period for 
redetermination or appeal has expired under the State law. On timely 
receipt of such notice a State agency shall take appropriate action 
under the applicable State law to give effect to the corrected findings.



Sec. 614.23  Finality of findings.

    The findings of a Federal military agency referred to in Sec. Sec. 
614.21 and 614.22, and the Schedules of Remuneration issued by the 
Department pursuant to the Act and Sec. 614.12, shall be final and 
conclusive for all purposes of the UCX Program, including appeal and 
review pursuant to Sec. 614.7 or Sec. 614.17.

[53 FR 40555, Oct. 17, 1988]



Sec. 614.24  Furnishing other information.

    (a) Additional information. In addition to the information required 
by Sec. Sec. 614.21 and 614.22, a Federal military agency shall furnish 
to a State agency or the Department, within the time requested, any 
information which it is not otherwise prohibited from releasing by law, 
which the Department determines is necessary for the administration of 
the UCX Program.
    (b) Reports. Federal military agencies shall furnish to the 
Department or State agencies such reports containing such information as 
the Department determines are necessary or appropriate for carrying out 
the purposes of the UCX Program.

[47 FR 54697, Dec. 3, 1982, as amended at 53 FR 40555, Oct. 17, 1988]



Sec. 614.25  Liaison with Department

    To facilitate the Department's administration of the UCX program, 
each Federal military agency shall designate one or more of its 
officials to be the liaison with the Department. Each Federal military 
agency will inform the Department of its designation(s) and of any 
change in a designation.

[53 FR 40555, Oct. 17, 1988]

[[Page 65]]

 Appendix A to Part 614--Standard for Claim Filing, Claimant Reporting, 
                  Job Finding, and Employment Services

        Employment Security Manual (Part V, Sections 5000-5004) *
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    * Revises subgrouping 5000-5004.
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                         5000-5099 Claims Filing

5000 Standards for Claim Filing, Claimant Reporting, Job Finding, and 
          Employment Services
    A. Federal law requirements. Section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act 
require that a State law provide for:
    ``Payment of unemployment compensation solely through public 
employment offices or such other agencies as the Secretary may 
approve.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law provide 
for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation. * * *''
    Section 303(a)(1) of the Social Security Act requires that the State 
law provide for:
    ``Such methods of administration * * * as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    B. Secretary's interpretation of Federal law requirements.
    1. The Secretary interprets section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act to 
require that a State law provide for payment of unemployment 
compensation solely through public employment offices or claims offices 
administered by the State employment security agency if such agency 
provides for such coordination in the operations of its public 
employment offices and claims offices as will insure: (a) The payment of 
benefits only to individuals who are unemployed and who are able to work 
and available for work, and (b) that individuals claiming unemployment 
compensation (claimants) are afforded such placement and other 
employment services as are necessary and appropriate to return them to 
suitable work as soon as possible.
    2. The Secretary interprets all the above sections to require that a 
State law provide for:
    a. Such contact by claimants with public employment offices or 
claims offices or both, (1) as will reasonably insure the payment of 
unemployment compensation only to individuals who are unemployed and who 
are able to work and available for work, and (2) that claimants are 
afforded such placement and other employment services as are necessary 
and appropriate to facilitate their return to suitable work as soon as 
possible; and
    b. Methods of administration which do not unreasonably limit the 
opportunity of individuals to establish their right to unemployment 
compensation due under such State law.

5001 Claim Filing and Claimant Reporting Requirements Designed to 
Satisfy Secretary's Interpretation
    A. Claim filing--total or part-total unemployment.
    1. Individuals claiming unemployment compensation for total or part-
total unemployment are required to file a claim weekly or biweekly, in 
person or by mail, at a public employment office or a claims office 
(these terms include offices at itinerant points) as set forth below.
    2. Except as provided in paragraph 3, a claimant is required to file 
in person:
    a. His new claim with respect to a benefit year, or his continued 
claim for a waiting week or for his first compensable week of 
unemployment in such year; and
    b. Any other claim, when requested to do so by the claims personnel 
at the office at which he files his claim(s) because questions about his 
right to benefits are raised by circumstances such as the following:
    (1) The conditions or circumstances of his separation from 
employment;
    (2) The claimant's answers to questions on mail claim(s) indicate 
that he may be unable to work or that there may be undue restrictions on 
his availability for work or that his search for work may be inadequate 
or that he may be disqualified;
    (3) The claimant's answers to questions on mail claims create 
uncertainty about his credibility or indicate a lack of understanding of 
the applicable requirement; or
    (4) The claimant's record shows that he has previously filed a 
fraudulent claim.
    In such circumstances, the claimant is required to continue to file 
claims in person each week (or biweekly) until the State agency 
determines that filing claims in person is no longer required for the 
resolution of such questions.
    3. A claimant must be permitted to file a claim by mail in any of 
the following circumstances:
    a. He is located in an area requiring the expenditure of an 
unreasonable amount of time or money in traveling to the nearest 
facility established by the State agency for filing claims in person;
    b. Conditions make it impracticable for the agency to take claims in 
person;
    c. He has returned to full-time work on or before the scheduled date 
for his filing a claim, unless the agency makes provision for

[[Page 66]]

in-person filing at a time and place that does not interfere with his 
employment;
    d. The agency finds that he has good cause for failing to file a 
claim in person.
    4. A claimant who has been receiving benefits for partial 
unemployment may continue to file claims as if he were a partially 
unemployed worker for the first four consecutive weeks of total or part-
total unemployment immediately following his period of partial 
unemployment so long as he remains attached to his regular employer.
    B. Claim filing--partial unemployment. Each individual claiming 
unemployment compensation for a week (or other claim period) during 
which, because of lack of work, he is working less than his normal 
customary full-time hours for his regular employer and is earning less 
than the earnings limit provided in the State law, shall not be required 
to file a claim for such week or other claim period earlier than 2 weeks 
from the date that wages are paid for such claim period or, if a low 
earnings report is required by the State law, from the date the employer 
furnished such report to the individual. State agencies may permit 
claims for partial unemployment to be filed either in person or by mail, 
except that in the circumstances set forth in section A 3, filing by 
mail must be permitted, and in the circumstances set forth in section A 
2 b, filing in person may be required.

5002 Requirement for Job Finding, Placement, and other Employment 
Services Designed to Satisfy Secretary's Interpretation
    A. Claims personnel are required to assure that each claimant is 
doing what a reasonable individual in his circumstances would do to 
obtain suitable work.
    B. In the discretion of the State agency:
    1. The claims personnel are required to give each claimant such 
necessary and appropriate assistance as they reasonably can in finding 
suitable work and at their discretion determine when more complete 
placement and employment services are necessary and appropriate for a 
claimant; and if they determine more complete services are necessary and 
appropriate, the claims personnel are to refer him to employment service 
personnel in the public employment office in which he has been filing 
claim(s), or, if he has been filing in a claims office, in the public 
employment office most accessible to him; or
    2. All placement and employment services are required to be afforded 
to each claimant by employment service personnel in the public 
employment office most accessible to him, in which case the claims 
personnel in the office in which the claimant files his claim are to 
refer him to the employment service personnel when placement or other 
employment services are necessary and appropriate for him.
    C. The personnel to whom the State agency assigns the 
responsibilities outlined in paragraph B above are required to give 
claimants such job-finding assistance, placement, and other employment 
services as are necessary and appropriate to facilitate their return to 
suitable work as soon as possible.
    In some circumstances, no such services or only limited services may 
be required. For example, if a claimant is on a short-term temporary 
layoff with a fixed return date, the only service necessary and 
appropriate to be given to him during the period of the layoff is a 
referral to suitable temporary work if such work is being performed in 
the labor market area.
    Similarly, claimants whose unemployment is caused by a labor dispute 
presumably will return to work with their employer as soon as the labor 
dispute is settled. They generally do not need services, nor do 
individuals in occupations where placement customarily is made by other 
nonfee charging placement facilities such as unions and professional 
associations.
    Claimants who fall within the classes which ordinarily would require 
limited services or no services shall, if they request placement and 
employment services, be afforded such services as are necessary and 
appropriate for them to obtain suitable work or to achieve their 
reasonable employment goals.
    On the other hand, a claimant who is permanently separated from his 
job is likely to require some services. He may need only some direction 
in how to get a job; he may need placement services if he is in an 
occupation for which there is some demand in the labor market area; if 
his occupation is outdated, he may require counseling and referral to a 
suitable training course. The extent and character of the services to be 
given any particular claimant may change with the length of his 
unemployment and depend not only on his own circumstances and 
conditions, but also on the condition of the labor market in the area.
    D. Claimants are required to report to employment service personnel, 
as directed, but such personnel and the claims personnel are required to 
so arrange and coordinate the contacts required of a claimant as not to 
place an unreasonable burden on him or unreasonably limit his 
opportunity to establish his rights to compensation. As a general rule, 
a claimant is not required to contact in person claims personnel or 
employment service personnel more frequently than once a week, unless he 
is directed to report more frequently for a specific service such as 
referral to a job or a training course or counseling which cannot be 
completed in one visit.
    E. Employment service personnel are required to report promptly to 
claims personnel in the office in which the claimant

[[Page 67]]

files his claim(s): (1) His failure to apply for or accept work to which 
he was referred by such personnel or when known, by any other nonfee-
charging placement facility such as a union or a professional 
association; and (2) any information which becomes available to it that 
may have a bearing on the claimant's ability to work or availability for 
work, or on the suitability of work to which he was referred or which 
was offered to him.

5004 Evaluation of Alternative State Provisions. If the State law 
provisions do not conform to the ``suggested State law requirements'' 
set forth in sections 5001 and 5002, but the State law contains 
alternative provisions, the Manpower Administrator, in collaboration 
with the State agency, will study the actual or anticipated effect of 
the alternative provisions. If the Manpower Administrator concludes that 
the alternative provisions satisfy the requirements of the Federal law 
as construed by the Secretary (see section 5000 B) he will so notify the 
State agency. If he does not so conclude, he will submit the matter to 
the Secretary. If the Secretary concludes that the alternative 
provisions satisfy such requirements, the State agency will be so 
notified. If the Secretary concludes that there is a question as to 
whether the alternative provisions satisfy such requirements, the State 
agency will be advised that unless the State law provisions are 
appropriately revised, a notice of hearing will be issued as required by 
the Code of Federal Regulations, title 20, section 601.3.

[53 FR 40555, Oct. 17, 1988; 53 FR 43799, Oct. 26, 1988]

  Appendix B to Part 614--Standard for Claim Determination--Separation 
                               Information

         Employment Security Manual (Part V, Sections 6010-6015)

6010-6019 Standard for Claim Determinations--Separation Information *
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    * Revises subgrouping 6010-6019
---------------------------------------------------------------------------

6010 Federal Law Requirements. Section 303(a)(1) of the Social Security 
          Act requires that a State law include provision for:
    ``Such methods of administration . . . as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 303(a)(3) of the Social Security Act requires that a State 
law include provision for:
    ``Opportunity for a fair hearing before an impartial tribunal, for 
all individuals whose claims for unemployment compensation are denied.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * *.
    Section 3306(h) of the Federal Unemployment Tax Act defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''

6011 Secretary's Interpretation of Federal Law Requirements. The 
Secretary interprets the above sections to require that a State law 
include provisions which will insure that:
    A. Individuals who may be entitled to unemployment compensation are 
furnished such information as will reasonably afford them an opportunity 
to know, establish, and protect their rights under the unemployment 
compensation law of such State, and
    B. The State agency obtains and records in time for the prompt 
determination and review of benefit claims such information as will 
reasonably insure the payment of benefits to individuals to whom 
benefits are due.

6012 Criteria for Review of State Law Conformity with Federal 
Requirements
    In determining the conformity of a State law with the above 
requirements of the Federal Unemployment Tax Act and the Social Security 
Act as interpreted by the Secretary, the following criteria will be 
applied:
    A. Is it required that individuals who may be entitled to 
unemployment compensation be furnished such information of their 
potential rights to benefits, including the manner and places of filing 
claims, the reasons for determinations, and their rights of appeal, as 
will insure them a reasonable opportunity to know, establish, and 
protect their rights under the law of the State?
    B. Is the State agency required to obtain, in time for prompt 
determination of rights to benefits such information as will reasonably 
insure the payment of benefits to individuals to whom benefits are due?
    C. Is the State agency required to keep records of the facts 
considered in reaching determinations of rights to benefits?
6013 Claim Determinations Requirements Designed To Meet Department of 
          Labor Criteria
    A. Investigation of claims. The State agency is required to obtain 
promptly and prior to a determination of an individual's right to 
benefits, such facts pertaining thereto as will be sufficient reasonably 
to insure the payment of benefits when due.
    This requirement embraces five separate elements:
    1. It is the responsibility of the agency to take the initiative in 
the discovery of information. This responsibility may not be passed on 
the claimant or the employer. In

[[Page 68]]

addition to the agency's own records, this information may be obtained 
from the worker, the employer, or other sources. If the information 
obtained in the first instance discloses no essential disagreement and 
provides a sufficient basis for a fair determination, no further 
investigation is necessary. If the information obtained from other 
sources differs essentially from that furnished by the claimant, the 
agency, in order to meet its responsibility, is required to inform the 
claimant of such information from other sources and to afford the 
claimant an opportunity to furnish any further facts he may have.
    2. Evidentiary facts must be obtained as distinguished from ultimate 
facts or conclusions. That a worker was discharged for misconduct is an 
ultimate fact or conclusion; that he destroyed a machine upon which he 
was working is a primary or evidentiary fact, and the sort of fact that 
the requirement refers to.
    3. The information obtained must be sufficient reasonably to insure 
the payment of benefits when due. In general, the investigation made by 
the agency must be complete enough to provide information upon which the 
agency may act with reasonable assurance that its decision is consistent 
with the unemployment compensation law. On the other hand, the 
investigation should not be so exhaustive and time-consuming as unduly 
to delay the payment of benefits and to result in excessive costs.
    4. Information must be obtained promptly so that the payment of 
benefits is not unduly delayed.
    5. If the State agency requires any particular evidence from the 
worker, it must give him a reasonable opportunity to obtain such 
evidence.
    B. Recording of facts. The agency must keep a written record of the 
facts considered in reaching its determinations.
    C. Determination notices
    1. The agency must give each claimant a written notice of:
    a. Any monetary determination with respect to his benefit year;
    b. Any determination with respect to purging a disqualification if, 
under the State law, a condition or qualification must be satisfied with 
respect to each week of disqualification; but in lieu of giving written 
notice of each determination for each week in which it is determined 
that the claimant has met the requirements for purging the agency may 
inform the claimant that he has purged the disqualification for a week 
by notation on his applicant identification card or otherwise in 
writing.
    c. Any other determination which adversely affects \1\ his rights to 
benefits, except that written notice of determination need not be given 
with respect to:
---------------------------------------------------------------------------

    \1\ A determination ``adversely affects'' claimant's right to 
benefits if it: (1) Results in a denial to him of benefits (including a 
cancellation of benefits or wage credits or any reduction in whole or in 
part below the weekly or maximum amount established by his monetary 
determination) for any week or other period; or (2) denies credit for a 
waiting week; or (3) applies any disqualification or penalty; or (4) 
determines that he has not satisfied a condition of eligibility, 
requalification for benefits, or purging a disqualification; or (5) 
determines that an overpayment has been made or orders repayment or 
recoupment of any sum paid to him; or (6) applies a previously 
determined overpayment, penalty, or order for repayment or recoupment; 
or (7) in any other way denies claimant a right to benefits under the 
State law.
---------------------------------------------------------------------------

    (1) A week in a benefit year for which the claimant's weekly benefit 
amount is reduced in whole or in part by earnings if, the first time in 
the benefit year that there is such a reduction, he is required to be 
furnished a booklet or leaflet containing the information set forth 
below in paragraph 2f(1). However, a written notice of determination is 
required if: (a) There is a dispute concerning the reduction with 
respect to any week (e.g., as to the amount computed as the appropriate 
reduction, etc.); or (b) there is a change in the State law (or in the 
application thereof) affecting the reduction; or
    (2) Any week in a benefit year subsequent to the first week in such 
benefit year in which benefits were denied, or reduced in whole or in 
part for reasons other than earnings, if denial or reduction for such 
subsequent week is based on the same reason and the same facts as for 
the first week, and if written notice of determination is required to be 
given to the claimant with respect to such first week, and with such 
notice of determination, he is required to be given a booklet or 
pamphlet containing the information set forth below in paragraphs 2f(2) 
and 2h. However, a written notice of determination is required if: (a) 
There is a dispute concerning the denial or reduction of benefits with 
respect to such week; or (b) there is a change in the State law (or in 
the application thereof) affecting the denial or reduction; or (c) there 
is a change in the amount of the reduction except as to the balance 
covered by the last reduction in a series of reductions.
    Note: This procedure may be applied to determinations made with 
respect to any subsequent weeks for the same reason and on the basis of 
the same facts: (a) That claimant is unable to work, unavailable for 
work, or is disqualified under the labor dispute provision; and (b) 
reducing claimant's weekly

[[Page 69]]

benefit amount because of income other than earnings or offset by reason 
of overpayment.
    2. The agency must include in written notices of determinations 
furnished to claimants sufficient information to enable them to 
understand the determinations, the reasons therefor, and their rights to 
protest, request reconsideration, or appeal.
    The written notice of monetary determination must contain the 
information specified in the following items (except h) unless an item 
is specifically not applicable. A written notice of any other 
determination must contain the information specified in as many of the 
following items as are necessary to enable the claimant to understand 
the determination and to inform him of his appeal rights. Information 
specifically applicable to the individual claimant must be contained in 
the written notice of determination. Information of general application 
such as (but not limited to) the explanation of benefits for partial 
unemployment, information as to deductions, seasonality factors, and 
information as to the manner and place of taking an appeal, extension of 
the appeal period, and where to obtain information and assistance may be 
contained in a booklet or leaflet which is given the claimant with his 
monetary determination.
    a. Base period wages. The statement concerning base-period wages 
must be in sufficient detail to show the basis of computation of 
eligibility and weekly and maximum benefit amounts. (If maximum benefits 
are allowed, it may not be necessary to show details of earnings.)
    b. Employer name. The name of the employer who reported the wages is 
necessary so that the worker may check the wage transcript and know 
whether it is correct. If the worker is given only the employer number, 
he may not be able to check the accuracy of the wage transcript.
    c. Explanation of benefit formula--weekly and maximum benefit 
amounts. Sufficient information must be given the worker so that he will 
understand how his weekly benefit amount, including allowances for 
dependents, and his maximum benefit amount were figured. If benefits are 
computed by means of a table contained in the law, the table must be 
furnished with the notice of determination whether benefits are granted 
or denied.
    The written notice of determination must show clearly the weekly 
benefit amount and the maximum potential benefits to which the claimant 
is entitled.
    The notice to a claimant found ineligible by reason of insufficient 
earnings in the base period must inform him clearly of the reason for 
ineligibility. An explanation of the benefit formula contained in a 
booklet or pamphlet should be given to each claimant at or prior to the 
time he receives written notice of a monetary determination.
    d. Benefit year. An explanation of what is meant by the benefit year 
and identification of the claimant's benefit year must be included in 
the notice of determinaton.
    e. Information as to benefits for partial unemployment. There must 
be included either in the written notice of determination or in a 
booklet or pamphlet accompanying the notice an explanation of the 
claimant's rights to partial benefits for any week with respect to which 
he is working less than his normal customary full-time workweek because 
of lack of work and for which he earns less than his weekly benefit 
amount or weekly amount plus earnings, whichever is provided by the 
State law. If the explanation is contained in the notice of 
determination, reference to the item in the notice in which his weekly 
benefit amount is entered should be made.
    f. Deductions from weekly benefits.
    (1) Earnings. Although written notice of determinations deducting 
earnings from a claimant's weekly benefit amount is generally not 
required (see paragraph 1c (1) above), where written notice of 
determination is required (or given) it shall set forth the amount of 
earnings, the method of computing the deduction in sufficient detail to 
enable the claimant to verify the accuracy of the deduction, and his 
right to protest, request redetermination, and appeal. Where a written 
notice of determination is given to the claimant because there has been 
a change in the State law or in the application of the law, an 
explanation of the change shall be included.
    Where claimant is not required to receive a written notice of 
determination, he must be given a booklet or pamphlet the first time in 
his benefit year that there is a deduction for earnings which shall 
include the following information:
    (a) The method of computing deductions for earnings in sufficient 
detail to enable the claimant to verify the accuracy of the deduction;
    (b) That he will not automatically be given a written notice of 
determination for a week with respect to which there is a deduction for 
earnings (unless there is a dispute concerning the reduction with 
respect to a week or there has been a change in the State law or in the 
application of the law affecting the deduction) but that he may obtain 
such a written notice upon request; and
    (c) A clear statement of his right to protest, request a 
redetermination, and appeal from any determination deducting earnings 
from his weekly benefit amount even though he does not automatically 
receive a written notice of determination; and if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.

[[Page 70]]

    (2) Other deductions.
    (a) A written notice of determination is required with respect to 
the first week in claimant's benefit year in which there is a reduction 
from his benefits for a reason other than earnings. This notice must 
describe the deduction made from claimant's weekly benefit amount, the 
reason for the deduction, the method of computing it in sufficient 
detail to enable him to verify the accuracy of such deduction, and his 
right to protest, request redetermination, or appeal.
    (b) A written notice of determination is not required for subsequent 
weeks that a deduction is made for the same reason and on the basis of 
the same facts, if the notice of determination pursuant to (2)(a), or a 
booklet or pamphlet given him with such notice explains: (i) The several 
kinds of deductions which may be made under the State law (e.g., 
retirement pensions, vacation pay, and overpayments); (ii) the method of 
computing each kind of deduction in sufficient detail that claimant will 
be able to verify the accuracy of deductions made from his weekly 
benefit payments; (iii) any limitation on the amount of any deduction or 
the time in which any deduction may be made; (iv) that he will not 
automatically be given a written notice of determination for subsequent 
weeks with respect to which there is a deduction for the same reason and 
on the basis of the same facts, but that he may obtain a written notice 
of determination upon request; (v) his right to protest, request 
redetermination, or appeal with respect to subsequent weeks for which 
there is a reduction from his benefits for the same reason, and on the 
basis of the same facts even though he does not automatically receive a 
written notice of determination; and (vi) that if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    g. Seasonality factors. If the individual's determination is 
affected by seasonality factors under the State law, an adequate 
explanation must be made. General explanations of seasonality factors 
which may affect determinations for subsequent weeks may be included in 
a booklet or pamphlet given with his notice of monetary determination.
    h. Disqualification or ineligibility. If a disqualification is 
imposed, or if the claimant is declared ineligible for one or more 
weeks, he must be given not only a statement of the period of 
disqualification or ineligibility and the amount of wage-credit 
reductions, if any, but also an explanation of the reason for the 
ineligibility or disqualification. This explanation must be sufficiently 
detailed so that he will understand why he is ineligible or why he has 
been disqualified, and what he must do in order to requalify for 
benefits or purge the disqualification. The statement must be 
individualized to indicate the facts upon which the determination was 
based, e.g., state, ``It is found that you left your work with Blank 
Company because you were tired of working; the separation was voluntary, 
and the reason does not constitute good cause,'' rather than merely the 
phrase ``voluntary quit.'' Checking a box as to the reason for the 
disqualification is not a sufficiently detailed explanation. However, 
this statement of the reason for the disqualification need not be a 
restatement of all facts considered in arriving at the determination.
    i. Appeal rights. The claimant must be given information with 
respect to his appeal rights.
    (1) The following information shall be included in the notice of 
determination:
    (a) A statement that he may appeal or, if the State law requires or 
permits a protest or redetermination before an appeal, that he may 
protest or request a redetermination.
    (b) The period within which an appeal, protest, or request for 
redetermination must be filed. The number of days provided by statute 
must be shown as well as either the beginning date or ending date of the 
period. (It is recommended that the ending date of the appeal period be 
shown, as this is the more understandable of the alternatives.)
    (2) The following information must be included either in the notice 
of determination or in separate informational material referred to in 
the notice:
    (a) The manner in which the appeal, protest, or request for 
redetermination must be filed, e.g., by signed letter, written 
statement, or on a prescribed form, and the place or places to which the 
appeal, protest, or request for redetermination may be mailed or hand-
delivered.
    (b) An explanation of any circumstances (such as nonworkdays, good 
cause, etc.) which will extend the period for the appeal, protest, or 
request for redetermination beyond the date stated or identified in the 
notice of determination.
    (c) That any further information claimant may need or desire can be 
obtained together with assistance in filing his appeal, protest, or 
request for redetermination from the local office.
    If the information is given in separate material, the notice of 
determination would adequately refer to such material if it said, for 
example, ``For other information about your (appeal), (protest), 
(redetermination) rights, see pages ---- to ---- of the ------ (name of 
pamphlet or booklet) heretofore furnished to you.''
6014 Separation Information Requirements Designed To Meet Department of 
          Labor Criteria

[[Page 71]]

    A. Information to agency. Where workers are separated, employers are 
required to furnish the agency promptly, either upon agency request or 
upon such separation, a notice describing the reasons for and the 
circumstances of the separation and any additional information which 
might affect a claimant's right to benefits. Where workers are working 
less than full time, employers are required to furnish the agency 
promptly, upon agency request, information concerning a claimant's hours 
of work and his wages during the claim periods invovled, and other facts 
which might affect a claimant's eligibility for benefits during such 
periods.
    When workers are separated and the notices are obtained on a request 
basis, or when workers are working less than full time and the agency 
requests information, it is essential to the prompt processing of claims 
that the request be sent out promptly after the claim is filed and the 
employer be given a specific period within which to return the notice, 
preferably within 2 working days.
    When workers are separated and notices are obtained upon separation, 
it is essential that the empolyer be required to send the notice to the 
agency with sufficient promptness to insure that, if a claim is filed, 
it may be processed promptly. Normally, it is desirable that such a 
notice be sent to the central office of the agency, since the employer 
may not know in which local office the worker will file his claim. The 
usual procedure is for the employer to give the worker a copy of the 
notice sent by the employer to the agency.
    B. Information to worker.
    1. Information required to be given. Employees are required to give 
their employers information and instructions concerning the employees' 
potential rights to benefits and concerning registration for work and 
filing claims for benefits.
    The information furnished to employees under such a requirement need 
not be elaborate; it need only be adequate to insure that the worker who 
is separated or who is working less than full time knows he is 
potentially eligible for benefits and is informed as to what he is to do 
or where he is to go to file his claim and register for work. When he 
files his claim, he can obtain more detailed information.
    In States that do not require employers to furnish periodically to 
the State agency detailed reports of the wages paid to their employees, 
each employer is required to furnish to his employees information as to: 
(a) The name under which he is registered by the State agency, (b) the 
address where he maintains his payroll records, and (c) the workers' 
need for this information if and when they file claims for benefits.
    2. Methods for giving information. The information and instructions 
required above may be given in any of the following ways:
    a. Posters prominently displayed in the employer's establishment. 
The State agency should supply employers with a sufficient number of 
posters for distribution throughout their places of business and should 
see that the posters are conspicuously displayed at all times.
    b. Leaflets. Leaflets distributed either periodically or at the time 
of separation or reduction of hours. The State agency should supply 
employers with a sufficient number of leaflets.
    c. Individual notices. Individual notices given to each employee at 
the time of separation or reduction in hours.
    It is recommended that the State agency's publicity program be used 
to supplement the employer-information requirements. Such a program 
should stress the availability and location of claim-filing offices and 
the importance of visiting those offices whenever the worker is 
unemployed, wishes to apply for benefits, and to seek a job.

6015 Evaluation of Alternative State Provisions with Respect to Claim 
Determinations and Separation Information. If the State law provisions 
do not conform to the suggested requirements set forth in sections 6013 
and 6014, but the State law contains alternative provisions, the Bureau 
of Employment Security, in collaboration with the State agency, will 
study the actual or anticipated effects of the alternative provisions. 
If the Administrator of the Bureau concludes that the alternative 
provisions satisfy the criteria in section 6012, he will so notify the 
State agency. If the Administrator of the Bureau does not so conclude, 
he will submit the matter to the Secretary. If the Secretary concludes 
that the alternative provisions satisfy the criteria in section 6012, 
the State agency will be so notified. If the Secretary concludes that 
there is a question as to whether the alternative provisions satisfy the 
criteria, the State agency will be advised that unless the State law 
provisions are appropriately revised, a notice of hearing will be issued 
as required by the Code of Federal Regulations, title 20, Sec. 601.5.

[53 FR 40557, Oct. 17, 1988; 53 FR 43799, Oct. 26, 1988]

  Appendix C to Part 614--Standard for Fraud and Overpayment Detection

         Employment Security Manual (Part V, Sections 7510-7515)

7510-7519 Standard for Fraud and Overpayment Detection


[[Page 72]]


7510 Federal Law Requirements. Section 303(a)(1) of the Social Security 
Act requires that a State law include provision for:
    ``Such methods of administration * * * as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 1603(a)(4) of the Internal Revenue Code and section 
3030(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure for all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * * ''
    Section 1607(h) of the Internal Revenue Code defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''

7511 The Secretary's Interpretation of Federal Law Requirements. The 
Secretary of Labor interprets the above sections to require that a State 
law include provision for such methods of administration as are, within 
reason, calculated (1) to detect benefits paid through error by the 
agency or through willful misrepresentation or error by the claimant or 
others, and (2) to deter claimants from obtaining benefits through 
willful misrepresentation.
7513 Criteria for Review of State Conformity With Federal Requirements. 
In detemining State conformity with the above requirements of the 
Internal Revenue Code and the Social Security Act, as interpreted by the 
Secretary of Labor, the following criteria will be applied:
    A. Are investigations required to be made after the payment of 
benefits, (or, in the case of interstate claims, are investigations made 
by the agent State after the processing of claims) as to claimants' 
entitlement to benefits paid to them in a sufficient proportion of cases 
to test the effectiveness of the agency's procedures for the prevention 
of payments which are not due? To carry out investigations, has the 
agency assigned to some individual or unit, as a basic function, the 
responsibility of making or functionally directing such investigations?
    Explantaion: It is not feasible to prescribe the extent to which the 
above activities are required; however, they should always be carried on 
to such an extent that they will show whether or not error or willful 
misrepresentation is increasing or decreasing, and will reveal problem 
areas. The extent and nature of the above activities should be varied 
according to the seriousness of the problem in the State. The 
responsible individual or unit should:
    1. Check paid claims for overpayment and investigate for willful 
misrepresentation or, alternatively, advise and assist the operating 
units in the performance of such functions, or both;
    2. Perform consultative services with respect to methods and 
procedures for the prevention and detection of fraud; and
    3. Perform other services which are closely related to the above.
    Although a State agency is expected to make a full-time assignment 
of responsibility to a unit or individual to carry on the functions 
described above, a small State agency might make these functions a part-
time responsibility of one individual. In connection with the detection 
of overpayments, such a unit or individual might, for example:
    (a) Investigate information on suspected benefit fraud received from 
any agency personnel, and from sources outside the agency, including 
anonymous complaints;
    (b) Investigate information secured from comparisons of benefit 
payments with employment records to detect cases of concurrent working 
(whether in covered or noncovered work) and claiming of benefits 
(including benefit payments in which the agency acted as agent for 
another State).
    The benefit fraud referred to herein may involve employers, agency 
employees, and witnesses, as well as claimants.
    Comparisons of benefit payments with employment records are commonly 
made either by post-audit or by industry surveys. The so-called ``post-
audit'' is a matching of central office wage-record files against 
benefit payments for the same period. ``Industry surveys'' or ``mass 
audits'' are done in some States by going directly to employers for pay-
roll information to be checked against concurrent benefit lists. A plan
    A. of investigation based on a sample post-audit will be considered 
as partial fulfillment of the investigation program; it would need to be 
supplemented by other methods capable of detecting overpayments to 
persons who have moved into noncovered occupations or are claiming 
interstate benefits.
    B. Are adequate records maintained by which the results of 
investigations may be evaluated? *
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    * Revises section 7513 as issued 5/5/50.
---------------------------------------------------------------------------

    Explanation. To meet this criterion, the State agency will be 
expected to maintain records of all its activities in the detection of 
overpayments, showing whether attributable to error or willful 
misrepresentation, measuring the results obtained through various 
methods, and noting the remedial action taken in each case. The adequacy 
and effectiveness of various methods of checking for willful 
misrepresentation can be evaluated only if records are kept of the 
results obtained. Internal reports on fraudulent and erroneous 
overpayments are needed by State agencies for self-evaluation. Detailed 
records should be maintained in order that the State agency may 
determine, for example, which of several methods of checking currently 
used are the most productive. Such records

[[Page 73]]

also will provide the basis for drawing a clear distinction between 
fraud and error.
    C. Does the agency take adequate action with respect to publicity 
concerning willful misrepresentation and its legal consequences to deter 
fraud by claimants? *
    Explanation. To meet this criterion, the State agency must issue 
adequate material on claimant eligibility requirements and must take 
necessary action to obtain publicity on the legal consequences of 
willful misrepresentation or willful nondisclosure of facts.
    Public announcements on convictions and resulting penalties for 
fraud are generally considered necessary as a deterrent to other 
persons, and to inform the public that the agency is carrying on an 
effective program to prevent fraud. This alone is not considered 
adequate publicity. It is important that information be circulated which 
will explain clearly and understandably the claimant's rights, and the 
obligations which he must fulfill to be eligible for benefits. Leaflets 
for distribution an posters placed in local offices are appropriate 
media for such information.

7515 Evalauation of Alternative State Provisions with Respect to 
Erroneous and Illegal Payments. If the methods of administration 
provided for by the State law do not conform to the suggested methods of 
meeting the requirements set forth in section 7511, but a State law does 
provide for alternative methods of administration designed to accomplish 
the same results, the Bureau of Employment Security, in collaboration 
with the State agency, will study the actual or anticipated effect of 
the alternative methods of administration. If the Bureau concludes that 
the alternative methods satisfy the criteria in section 7513, it will so 
notify the State agency. If the Bureau does not so conclude, it will 
submit to the Secretary the results of the study for his determination 
of whether the State's alternative methods of administration meet the 
criteria.\*\
---------------------------------------------------------------------------

    \*\ Revises section 7513 as issued 5/5/50.
---------------------------------------------------------------------------



PART 615_EXTENDED BENEFITS IN THE FEDERAL-STATE UNEMPLOYMENT COMPENSATION 
PROGRAM--Table of Contents




Sec.
615.1 Purpose.
615.2 Definitions.
615.3 Effective period of the program.
615.4 Eligibility requirements for Extended Benefits.
615.5 Definition of ``exhaustee.''
615.6 Extended Benefits; weekly amount.
615.7 Extended Benefits; maximum amount.
615.8 Provisions of State law applicable to claims.
615.9 Restrictions on entitlement.
615.10 Special provisions for employers.
615.11 Extended Benefit Periods.
615.12 Determination of ``on'' and ``off'' indicators.
615.13 Announcement of the beginning and ending of Extended Benefit 
          Periods.
615.14 Payments to States.
615.15 Records and reports.

    Authority: 26 U.S.C. 7805; 42 U.S.C. 1102; Secretary's Order No. 4-
75 (40 FR 18515).

    Source: 53 FR 27937, July 25, 1988, unless otherwise noted.



Sec. 615.1  Purpose.

    The regulations in this part are issued to implement the ``Federal-
State Extended Unemployment Compensation Act of 1970'' as it has been 
amended, which requires, as a condition of tax offset under the Federal 
Unemployment Tax Act (26 U.S.C. 3301 et seq.), that a State unemployment 
compensation law provide for the payment of extended unemployment 
compensation during periods of high unemployment to eligible individuals 
as prescribed in the Act. The benefits provided under State law, in 
accordance with the Act and this part, are hereafter referred to as 
Extended Benefits, and the program is referred to as the Extended 
Benefit Program.



Sec. 615.2  Definitions.

    For the purposes of the Act and this part--
    (a) Act means the ``Federal-State Extended Unemployment Compensation 
Act of 1970'' (title II of Pub. L. 91-373; 84 Stat. 695, 708), approved 
August 10, 1970, as amended from time to time, including the 1980 
amendments in section 416 of Pub. L. 96-364 (94 Stat. 1208, 1310), 
approved September 26, 1980, and in sections 1022 and 1024 of Pub. L. 
96-499 (94 Stat. 2599, 2656, 2658) approved December 5, 1980, and the 
1981 amendments in sections 2401 through 2404 and section 2505(b) of 
Pub. L. 97-35 (95 Stat. 357, 874-875, 884) approved August 13, 1981, and 
the 1982 amendment in section 191 of Pub. L. 97-248 (96 Stat. 324, 407) 
approved September 3, 1982, and the 1983 amendment in section 522 of 
Pub. L. 98-21 (97 Stat. 65, 148) approved April 20, 1983.

[[Page 74]]

    (b) Base period means, with respect to an individual, the base 
period as determined under the applicable State law for the individual's 
applicable benefit year.
    (c)(1) Benefit year means, with respect to an individual, the 
benefit year as defined in the applicable State law.
    (2) Applicable benefit year means, with respect to an individual, 
the current benefit year if, at the time an initial claim for Extended 
Benefits is filed, the individual has an unexpired benefit year only in 
the State in which such claim is filed, or, in any other case, the 
individual's most recent benefit year. For this purpose, the most recent 
benefit year for an individual who has unexpired benefit years in more 
than one State when an initial claim for Extended Benefits is filed, is 
the benefit year with the latest ending date or, if such benefit years 
have the same ending date, the benefit year in which the latest 
continued claim for regular compensation was filed. The individual's 
most recent benefit year which expires in an Extended Benefit Period is 
the applicable benefit year if the individual cannot establish a second 
benefit year or is precluded from receiving regular compensation in a 
second benefit year solely by reason of a State law provision which 
meets the requirement of section 3304(a)(7) of the Internal Revenue Code 
of 1986 (26 U.S.C. 3304(a)(7)).
    (d) Compensation and unemployment compensation means cash benefits 
(including dependents' allowances) payable to individuals with respect 
to their unemployment, and includes regular compensation, additional 
compensation and extended compensation as defined in this section.
    (e) Regular compensation means compensation payable to an individual 
under a State law, and, when so payable, includes compensation payable 
pursuant to 5 U.S.C. chapter 85, but does not include extended 
compensation or additional compensation.
    (f) Additional compensation means compensation totally financed by a 
State and payable under a State law by reason of conditions of high 
unemployment or by reason of other special factors and, when so payable, 
includes compensation payable pursuant to 5 U.S.C. chapter 85.
    (g) Extended compensation means the extended unemployment 
compensation payable to an individual for weeks of unemployment which 
begin in an Extended Benefit Period, under those provisions of a State 
law which satisfy the requirements of the Act and this part with respect 
to the payment of extended unemployment compensation, and, when so 
payable, includes compensation payable pursuant to 5 U.S.C. chapter 85, 
but does not include regular compensation or additional compensation. 
Extended compensation is referred to in this part as Extended Benefits.
    (h) Eligibility period means, with respect to an individual, the 
period consisting of--
    (1) The weeks in the individual's applicable benefit year which 
begin in an Extended Benefit Period, or with respect to a single benefit 
year, the weeks in the benefit year which begin in more than one 
Extended Benefit Period, and
    (2) If the applicable benefit year ends within an Extended Benefit 
Period, any weeks thereafter which begin in such Extended Benefit 
Period, but an individual may not have more than one eligibility period 
with respect to any one exhaustion of regular benefits, or carry over 
from one eligibility period to another any entitlement to Extended 
Benefits.
    (i) Sharable compensation means:
    (1) Extended Benefits paid to an eligible individual under those 
provisions of a State law which are consistent with the Act and this 
part, and that does not exceed the smallest of the following:
    (i) 50 percent of the total amount of regular compensation payable 
to the individual during the applicable benefit year; or
    (ii) 13 times the individual's weekly amount of Extended Benefits 
payable for a week of total unemployment, as determined pursuant to 
Sec. 615.6(a); or
    (iii) 39 times the individual's weekly benefit amount, referred to 
in (ii), reduced by the regular compensation paid (or deemed paid) to 
the individual during the applicable benefit year; and
    (2) Regular compensation paid to an eligible individual with respect 
to

[[Page 75]]

weeks of unemployment in the individual's eligibility period, but only 
to the extent that the sum of such compensation, plus the regular 
compensation paid (or deemed paid) to the individual with respect to 
prior weeks of unemployment in the applicable benefit year, exceeds 26 
times and does not exceed 39 times the average weekly benefit amount 
(including allowances for dependents) for weeks of total unemployment 
payable to the individual under the State law in such benefit year: 
Provided, that such regular compensation is paid under provisions of a 
State law which are consistent with the Act and this part.
    (3) Notwithstanding the preceding provisions of this paragraph, 
sharable compensation shall not include any regular or extended 
compensation with respect to which a State is not entitled to a payment 
under section 202(a)(6) or 204 of the Act or Sec. 615.14 of this part.
    (j)(1) Secretary means the Secretary of Labor of the United States.
    (2) Department means the United States Department of Labor, and 
shall include the Employment and Training Administration, the agency of 
the United States Department of Labor headed by the Assistant Secretary 
of Labor for Employment and Training to whom has been delegated the 
Secretary's authority under the Act in Secretary's Order No. 4-75 (40 FR 
18515) and Secretary's Order No. 14-75.
    (k)(1) State means the States of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, and the U. S. Virgin Islands.
    (2) Applicable State means, with respect to an individual, the State 
with respect to which the individual is an ``exhaustee'' as defined in 
Sec. 615.5, and in the case of a combined wage claim for regular 
compensation, the term means the ``paying State'' as defined in Sec. 
616.6(e) of this chapter.
    (3) State agency means the State Employment Security Agency of a 
State which administers the State law.
    (l)(1) State law means the unemployment compensation law of a State, 
approved by the Secretary under section 3304(a) of the Internal Revenue 
Code of 1986 (26 U.S.C. 3304(a)).
    (2) Applicable State law means the law of the State which is the 
applicable State for an individual.
    (m)(1) Week means, for purposes of eligibility for and payment of 
Extended Benefits, a week as defined in the applicable State law.
    (2) Week means, for purposes of computation of Extended Benefit 
``on'' and ``off'' and ``no change'' indicators and insured unemployment 
rates and the beginning and ending of Extended Benefit Periods, a 
calendar week.
    (n)(1) Week of unemployment means a week of total, part-total, or 
partial unemployment as defined in the applicable State law, which shall 
be applied in the same manner and to the same extent to the Extended 
Benefit Program as if the individual filing a claim for Extended 
Benefits were filing a claim for regular compensation, except as 
provided in paragraph (n)(2) of this section.
    (2) Week of unemployment in section 202(a)(3)(A) of the Act means a 
week of unemployment, as defined in paragraph (n)(1) of this section, 
for which the individual claims Extended Benefits or sharable regular 
benefits.
    (o) For the purposes of section 202(a)(3) of the Act--
    (1) Employed, for the purposes of section 202(a)(3)(B)(ii) of the 
Act, and employment, for the purposes of section 202(a)(4) of the Act, 
means service performed in an employer-employee relationship as defined 
in the State law; and that law also shall govern whether that service 
must be covered by it, must consist of consecutive weeks, and must 
consist of more weeks of work than are required under section 
202(a)(3)(B) of the Act;
    (2) Individual's capabilities, for the purposes of section 
202(a)(3)(C), means work which the individual has the physical and 
mental capacity to perform and which meets the minimum requirements of 
section 202(a)(3)(D);
    (3) Reasonably short period, for the purposes of section 
202(a)(3)(C), means the number of weeks provided by the applicable State 
law;
    (4) Average weekly benefit amount, for the purposes of section 
202(a)(3)(D)(i), means the weekly benefit amount (including dependents' 
allowances payable for a week of total unemployment and

[[Page 76]]

before any reduction because of earnings, pensions or other 
requirements) applicable to the week in which the individual failed to 
take an action which results in a disqualification as required by 
section 202(a)(3)(B) of the Act;
    (5) Gross average weekly remuneration, for the purposes of section 
202(a)(3)(D)(i), means the remuneration offered for a week of work 
before any deductions for taxes or other purposes and, in case the 
offered pay may vary from week to week, it shall be determined on the 
basis of recent experience of workers performing work similar to the 
offered work for the employer who offered the work;
    (6) And, as used in section 202(a)(3)(D)(ii), shall be interpreted 
to mean ``or'';
    (7) Provisions of the applicable State law, as used in section 
202(a)(3)(D)(iii), include statutory provisions and decisions based on 
statutory provisions, such as not requiring an individual to take a job 
which requires traveling an unreasonable distance to work, or which 
involves an unreasonable risk to the individual's health, safety or 
morals; and such provisions shall also include labor standards and 
training provisions required under sections 3304(a)(5) and 3304(a)(8) of 
the Internal Revenue Code of 1986 and section 236(e) of the Trade Act of 
1974;
    (8) A systematic and sustained effort, for the purposes of section 
202(a)(3)(E), means--
    (i) A high level of job search activity throughout the given week, 
compatible with the number of employers and employment opportunities in 
the labor market reasonably applicable to the individual,
    (ii) A plan of search for work involving independent efforts on the 
part of each individual which results in contacts with persons who have 
the authority to hire or which follows whatever hiring procedure is 
required by a prospective employer in addition to any search offered by 
organized public and private agencies such as the State employment 
service or union or private placement offices or hiring halls,
    (iii) Actions by the individual comparable to those actions by which 
jobs are being found by people in the community and labor market, but 
not restricted to a single manner of search for work such as registering 
with and reporting to the State employment service and union or private 
placement offices or hiring halls, in the same manner that such work is 
found by people in the community,
    (iv) A search not limited to classes of work or rates of pay to 
which the individual is accustomed or which represent the individual's 
higher skills, and which includes all types of work within the 
individual's physical and mental capabilities, except that the 
individual, while classified by the State agency as provided in Sec. 
615.8(d) as having ``good'' job prospects, shall search for work that is 
suitable work under State law provisions which apply to claimants for 
regular compensation (which is not sharable),
    (v) A search by every claimant, without exception for individuals or 
classes of individuals other than those in approved training, as 
required under section 3304(a)(8) of the Internal Revenue Code of 1986 
or section 236(e) of the Trade Act of 1974,
    (vi) A search suspended only when severe weather conditions or other 
calamity forces suspension of such activities by most members of the 
community, except that
    (vii) The individual, while classified by the State agency as 
provided in Sec. 615.8(d) as having ``good'' job prospects, if such 
individual normally obtains customary work through a hiring hall, shall 
search for work that is suitable work under State law provisions which 
apply to claimants for regular compensation (which is not sharable);
    (9) Tangible evidence of an active search for work, for the purposes 
of section 202(a)(3)(E), means a written record which can be verified, 
and which includes the actions taken, methods of applying for work, 
types of work sought, dates and places where work was sought, the name 
of the employer or person who was contacted and the outcome of the 
contact;
    (10) Date of a disqualification, as used in section 202(a)(4), means 
the date the disqualification begins, as determined under the applicable 
State law;
    (11) Jury duty, for purposes of section 202(a)(3)(A)(ii), means the 
performance of service as a juror, during all periods

[[Page 77]]

of time an individual is engaged in such service, in any court of a 
State or the United States pursuant to the law of the State or the 
United States and the rules of the court in which the individual is 
engaged in the performance of such service; and
    (12) Hospitalized for treatment of an emergency or life-threatening 
condition, as used in section 202(a)(3)(A)(ii), has the following 
meaning: ``Hospitalized for treatment'' means an individual was admitted 
to a hospital as an inpatient for medical treatment. Treatment is for an 
``emergency or life threatening condition'' if determined to be such by 
the hospital officials or attending physician that provide the treatment 
for a medical condition existing upon or arising after hospitalization. 
For purposes of this definition, the term ``medical treatment'' refers 
to the application of any remedies which have the objective of effecting 
a cure of the emergency or life-threatening condition. Once an 
``emergency condition'' or a ``life-threatening condition'' has been 
determined to exist by the hospital officials or attending physician, 
the status of the individual as so determined shall remain unchanged 
until release from the hospital.
    (p)(1) Claim filed in any State under the interstate benefit payment 
plan, as used in section 202(c), means any interstate claim for a week 
of unemployment filed pursuant to the Interstate Benefit Payment Plan, 
but does not include--
    (i) A claim filed in Canada,
    (ii) A visiting claim filed by an individual who has received 
permission from his/her regular reporting office to report temporarily 
to a local office in another State and who has been furnished intrastate 
claim forms on which to file claims, or
    (iii) A transient claim filed by an individual who is moving from 
place to place searching for work, or an intrastate claim for Extended 
Benefits filed by an individual who does not reside in a State that is 
in an Extended Benefit Period,
    (2) The first 2 weeks, as used in section 202(c), means the first 
two weeks for which the individual files compensable claims for Extended 
Benefits under the Interstate Benefit Payment Plan in an agent State in 
which an Extended Benefit Period is not in effect during such weeks, and
    (q) Benefit structure as used in section 204(a)(2)(D), for the 
requirement to round down to the ``nearest lower full dollar amount'' 
for Federal reimbursement of sharable regular and sharable extended 
compensation means all of the following:
    (1) Amounts of regular weekly benefit payments,
    (2) Amounts of additional and extended weekly benefit payments,
    (3) The State maximum or minimum weekly benefit,
    (4) Partial and part-total benefit payments,
    (5) Amounts payable after deduction for pensions, and
    (6) Amounts payable after any other deduction required by State law.



Sec. 615.3  Effective period of the program.

    An Extended Benefit Program conforming with the Act and this part 
shall be a requirement for a State law effective on and after January 1, 
1972, pursuant to section 3304(a)(11) of the Internal Revenue Code of 
1986, (26 U.S.C. 3304(a)(11)). Continuation of the program by a State in 
conformity and substantial compliance with the Act and this part, 
throughout any 12-month period ending on October 31 of a year subsequent 
to 1972, shall be a condition of the certification of the State with 
respect to such 12-month period under section 3304(c) of the Internal 
Revenue Code of 1986 (26 U.S.C. 3304(c)). Conformity with the Act and 
this part in the payment of regular compensation and Extended Benefits 
to any individual shall be a continuing requirement, applicable to every 
week as a condition of a State's entitlement to payment for any 
compensation as provided in the Act and this part.



Sec. 615.4  Eligibility requirements for Extended Benefits.

    (a) General. An individual is entitled to Extended Benefits for a 
week of unemployment which begins in the individual's eligibility period 
if, with respect to such week, the individual is an exhaustee as defined 
in Sec. 615.5, files a timely claim for Extended Benefits,

[[Page 78]]

and satisfies the pertinent requirements of the applicable State law 
which are consistent with the Act and this part.
    (b) Qualifying for Extended Benefits. The State law shall specify 
whether an individual qualifies for Extended Benefits by earnings and 
employment in the base period for the individual's applicable benefit 
year as required by section 202(a)(5) of the Act, (and if it does not 
also apply this requirement to the payment of sharable regular benefits, 
the State will not be entitled to a payment under Sec. 615.14), as 
follows:
    (1) One and one-half times the high quarter wages; or
    (2) Forty times the most recent weekly benefit amount, and if this 
alternative is adopted, it shall use the weekly benefit amount 
(including dependents' allowances) payable for a week of total 
unemployment (before any reduction because of earnings, pensions or 
other requirements) which applied to the most recent week of regular 
benefits; or
    (3) Twenty weeks of full-time insured employment, and if this 
alternative is adopted, the term ``full-time'' shall have the meaning 
provided by the State law.



Sec. 615.5  Definition of ``exhaustee.''

    (a)(1) ``Exhaustee'' means an individual who, with respect to any 
week of unemployment in the individual's eligibility period:
    (i) Has received, prior to such week, all of the regular 
compensation that was payable under the applicable State law or any 
other State law (including regular compensation payable to Federal 
civilian employees and Ex-Servicemembers under 5 U.S.C. chapter 85) for 
the applicable benefit year that includes such week; or
    (ii) Has received, prior to such week, all of the regular 
compensation that was available under the applicable State law or any 
other State law (including regular compensation available to Federal 
civilian employees and Ex-Servicemembers under 5 U.S.C. chapter 85) in 
the benefit year that includes such week, after the cancellation of some 
or all of the individual's wage credits or the total or partial 
reduction of the individual's right to regular compensation; or
    (iii) The applicable benefit year having expired prior to such week 
and the individual is precluded from establishing a second (new) benefit 
year, or the individual established a second benefit year but is 
suspended indefinitely from receiving regular compensation, solely by 
reason of a State law provision which meets the requirement of section 
3304(a)(7) of the Internal Revenue Code of 1954 (26 U.S.C. 3304(a)(7)): 
Provided, that, an individual shall not be entitled to Extended Benefits 
based on regular compensation in a second benefit year during which the 
individual is precluded from receiving regular compensation solely by 
reason of a State law provision which meets the requirement of section 
3304(a)(7) of the Internal Revenue Code of 1986 (26 U.S.C. 3304(a)(7)); 
or
    (iv) The applicable benefit year having expired prior to such week, 
the individual has insufficient wages or employment, or both, on the 
basis of which a new benefit year could be established in any State that 
would include such week; and
    (v) Has no right to unemployment compensation for such week under 
the Railroad Unemployment Insurance Act or such other Federal laws as 
are specified by the Department pursuant to this paragraph; and
    (vi) Has not received and is not seeking for such week unemployment 
compensation under the unemployment compensation law of Canada, unless 
the Canadian agency finally determines that the individual is not 
entitled to unemployment compensation under the Canadian law for such 
week.
    (2) An individual who becomes an exhaustee as defined above shall 
cease to be an exhaustee commencing with the first week that the 
individual becomes eligible for regular compensation under any State law 
or 5 U.S.C. chapter 85, or has any right to unemployment compensation as 
provided in paragraph (a)(1)(v) of this section, or has received or is 
seeking unemployment compensation as provided in paragraph (a)(1)(vi) of 
this section. The individual's Extended Benefit Account

[[Page 79]]

shall be terminated upon the occurrence of any such week, and the 
individual shall have no further right to any balance in that Extended 
Benefit Account.
    (b) Special Rules. For the purposes of paragraphs (a)(1)(i) and 
(a)(1)(ii) of this section, an individual shall be deemed to have 
received in the applicable benefit year all of the regular compensation 
payable according to the monetary determination, or available to the 
individual, as the case may be, even though--
    (1) As a result of a pending appeal with respect to wages or 
employment or both that were not included in the original monetary 
determination with respect to such benefit year, the individual may 
subsequently be determined to be entitled to more or less regular 
compensation, or
    (2) By reason of a provision in the State law that establishes the 
weeks of the year in which regular compensation may be paid to the 
individual on the basis of wages in seasonal employment--
    (i) The individual may be entitled to regular compensation with 
respect to future weeks of unemployment in the next season or off 
season, as the case may be, but such compensation is not payable with 
respect to the week of unemployment for which Extended Benefits are 
claimed, and
    (ii) The individual is otherwise an exhaustee within the meaning of 
this section with respect to rights to regular compensation during the 
season or off season in which that week of unemployment occurs, or
    (3) Having established a benefit year, no regular compensation is 
payable during such year because wage credits were cancelled or the 
right to regular compensation was totally reduced as the result of the 
application of a disqualification.
    (c) Adjustment of week. If it is subsequently determined as the 
result of a redetermination or appeal that an individual is an exhaustee 
as of a different week than was previously determined, the individual's 
rights to Extended Benefits shall be adjusted so as to accord with such 
redetermination or decision.



Sec. 615.6  Extended Benefits; weekly amount.

    (a) Total unemployment. (1) The weekly amount of Extended Benefits 
payable to an individual for a week of total unemployment in the 
individual's eligibility period shall be the amount of regular 
compensation payable to the individual for a week of total unemployment 
during the applicable benefit year. If the individual had more than one 
weekly amount of regular compensation for total unemployment during such 
benefit year, the weekly amount of extended compensation for total 
unemployment shall be one of the following which applies as specified in 
the applicable State law:
    (i) The average of such weekly amounts of regular compensation,
    (ii) The last weekly benefit amount of regular compensation in such 
benefit year, or
    (iii) An amount that is reasonably representative of the weekly 
amounts of regular compensation payable during such benefit year.
    (2) If the method in paragraph (a)(1)(iii) of this section is 
adopted by a State, the State law shall specify how such amount is to be 
computed. If the method in paragraph (a)(1)(i) of this section is 
adopted by a State, and the amount computed is not an even dollar 
amount, the amount shall be raised or lowered to an even dollar amount 
as provided by the applicable State law for regular compensation.
    (b) Partial and part-total unemployment. The weekly amount of 
Extended Benefits payable for a week of partial or part-total 
unemployment shall be determined under the provisions of the applicable 
State law which apply to regular compensation, computed on the basis of 
the weekly amount of Extended Benefits payable for a week of total 
unemployment as determined pursuant to paragraph (a) of this section.



Sec. 615.7  Extended Benefits; maximum amount.

    (a) Individual account. An Extended Benefit Account shall be 
established for each individual determined to be eligible for Extended 
Benefits, in the

[[Page 80]]

sum of the maximum amount potentially payable to the individual as 
computed in accordance with paragraph (b) of this section.
    (b) Computation of amount in individual account. (1) The amount 
established in the Extended Benefit Account of an individual, as the 
maximum amount potentially payable to the individual during the 
individual's eligibility period, shall be equal to the lesser of--
    (i) 50 percent of the total amount of regular compensation 
(including dependents' allowances) payable to the individual during the 
individual's applicable benefit year; or
    (ii) 13 times the individual's weekly amount of Extended Benefits 
payable for a week of total unemployment, as determined pursuant to 
Sec. 615.6(a); or
    (iii) 39 times the individual's weekly benefit amount referred to in 
(ii), reduced by the regular compensation paid (or deemed paid) to the 
individual during the individual's applicable benefit year.
    (2) If the State law so provides, the amount in the individual's 
Extended Benefit Account shall be reduced by the aggregate amount of 
additional compensation paid (or deemed paid) to the individual under 
such law for prior weeks of unemployment in such benefit year which did 
not begin in an Extended Benefit Period.
    (c) Changes in accounts. (1) If an individual is entitled to more or 
less Extended Benefits as a result of a redetermination or an appeal 
which awarded more or less regular compensation or Extended Benefits, an 
appropriate change shall be made in the individual's Extended Benefit 
Account pursuant to an amended determination of the individual's 
entitlement to Extended Benefits.
    (2) If an individual who has received Extended Benefits for a week 
of unemployment is determined to be entitled to more regular 
compensation with respect to such week as the result of a 
redetermination or an appeal, the Extended Benefits paid shall be 
treated as if they were regular compensation up to the greater amount to 
which the individual has been determined to be entitled, and the State 
agency shall make appropriate adjustments between the regular and 
extended accounts. If the individual is entitled to more Extended 
Benefits as a result of being entitled to more regular compensation, an 
amended determination shall be made of the individual's entitlement to 
Extended Benefits. If the greater amount of regular compensation results 
in an increased duration of regular compensation, the individual's 
status as an exhaustee shall be redetermined as of the new date of 
exhaustion of regular compensation.
    (3) If an individual who has received Extended Benefits for a week 
of unemployment is determined to be entitled to less regular 
compensation as the result of a redetermination or an appeal, and as a 
consequence is entitled to less Extended Benefits, any Extended Benefits 
paid in excess of the amount to which the individual is determined to be 
entitled after the redetermination or decision on appeal shall be 
considered an overpayment which the individual shall have to repay on 
the same basis and in the same manner that excess payments of regular 
compensation are required to be repaid under the applicable State law. 
If such decision reduces the duration of regular compensation payable to 
the individual, the claim for Extended Benefits shall be backdated to 
the earliest date, subsequent to the date when the redetermined regular 
compensation was exhausted and within the individual's eligibility 
period, that the individual was eligible to file a claim for Extended 
Benefits. Any such changes shall be made pursuant to an amended 
determination of the individual's entitlement to Extended Benefits.
    (d) Reduction because of trade readjustment allowances. Section 
233(d) of the Trade Act of 1974 (and section 204(a)(2)(C) of the Act), 
requiring a reduction of Extended Benefits because of the receipt of 
trade readjustment allowances, shall be applied as follows:
    (1) The reduction of Extended Benefits shall apply only to an 
individual who has not exhausted his/her Extended Benefits at the end of 
the benefit year;
    (2) The amount to be deducted is the product of the weekly benefit 
amount for Extended Benefits multiplied by the number of weeks for which 
trade

[[Page 81]]

readjustment allowances were paid (regardless of the amount paid for any 
such week) up to the close of the last week that begins in the benefit 
year; and
    (3) The amount to be deducted shall be deducted from the balance of 
Extended Benefits not used as of the close of the last week which begins 
in the benefit year.



Sec. 615.8  Provisions of State law applicable to claims.

    (a) Particular provisions applicable. Except where the result would 
be inconsistent with the provisions of the Act or this part, the terms 
and conditions of the applicable State law which apply to claims for, 
and the payment of, regular compensation shall apply to claims for, and 
the payment of, Extended Benefits. The provisions of the applicable 
State law which shall apply to claims for, and the payment of, Extended 
Benefits include, but are not limited to:
    (1) Claim filing and reporting;
    (2) Information to individuals, as appropriate;
    (3) Notices to individuals and employers, as appropriate;
    (4) Determinations, redeterminations, and appeal and review;
    (5) Ability to work and availability for work, except as provided 
otherwise in this section;
    (6) Disqualifications, including disqualifying income provisions, 
except as provided by paragraph (c) of this section;
    (7) Overpayments, and the recovery thereof;
    (8) Administrative and criminal penalties;
    (9) The Interstate Benefit Payment Plan;
    (10) The Interstate Arrangement for Combining Employment and Wages, 
in accordance with part 616 of this chapter.
    (b) Provisions not to be applicable. The State law and regulations 
shall specify those of its terms and conditions which shall not be 
applicable to claims for, or payment of, Extended Benefits. Among such 
terms and conditions shall be at least those relating to--
    (1) Any waiting period;
    (2) Monetary or other qualifying requirements, except as provided in 
Sec. 615.4(b); and
    (3) Computation of weekly and total regular compensation.
    (c) Terminating disqualifications. A disqualification in a State 
law, as to any individual who voluntarily left work, was suspended or 
discharged for misconduct, gross misconduct or the commission or 
conviction of a crime, or refused an offer of or a referral to work, as 
provided in sections 202(a) (4) and (6) of the Act--
    (1) As applied to regular benefits which are not sharable, is not 
subject to any limitation in sections 202(a) (4) and (6);
    (2) As applied to eligibility for Extended Benefits, shall require 
that the individual be employed again subsequent to the date of the 
disqualification before it may be terminated, even though it may have 
been terminated on other grounds for regular benefits which are not 
sharable; and if the State law does not also apply this provision to the 
payment of what would otherwise be sharable regular benefits, the State 
will not be entitled to a payment under the Act and Sec. 615.14 in 
regard to such regular compensation; and
    (3) Will not apply in regard to eligibility for Extended Benefits in 
a subsequent eligibility period.
    (d) Classification and determination of job prospects. (1) As to 
each individual who files an initial claim for Extended Benefits (or 
sharable regular compensation), the State agency shall classify the 
individual's prospects for obtaining work in his/her customary 
occupation within a reasonably short period, as ``good'' or ``not 
good,'' and shall promptly (not later than the end of the week in which 
the initial claim is filed) notify the individual in writing of such 
classification and of the requirements applicable to the individual 
under the provisions of the applicable State law corresponding to 
section 202(a)(3) of the Act and this part. Such requirements shall be 
applicable beginning with the week following the week in which the 
individual is furnished such written notice.
    (2) If an individual is thus classified as having good prospects, 
but those prospects are not realized by the close

[[Page 82]]

of the period the State law specifies as a reasonably short period, the 
individual's prospects will be automatically reclassified as ``not 
good'' or classified as ``good'' or ``not good'' depending on the 
individual's job prospects as of that date.
    (3) Whenever, as part of a determination of an individual's 
eligibility for benefits, an issue arises concerning the individual's 
failure to apply for or accept an offer of work (sections 
202(a)(3)(A)(i) and (F) of the Act and paragraphs (e) and (f) of this 
section), or to actively engage in seeking work (sections 
202(a)(3)(A)(ii) and (E) of the Act and paragraph (g) of this section), 
a written appealable determination shall be made which includes a 
finding as to the individual's job prospects at the time the issue 
arose. The reasons for allowing or denying benefits in the written 
notice of determination shall explain how the individual's job prospects 
relate to the decision to allow or deny benefits.
    (4) If an individual's job prospects are determined in accordance 
with the preceding paragraph (3) to be ``good,'' the suitability of work 
will be determined under the standard State law provisions applicable to 
claimants for regular compensation which is not sharable; and if 
determined to be ``not good,'' the suitability of work will be 
determined under the definition of suitable work in the State law 
provisions corresponding to sections 202(a)(3) (C) and (D) of the Act 
and this part. Any determination or classification of an individual's 
job prospects is mutually exclusive, and only one suitable work 
definition shall be applied to a claimant as to any failure to accept or 
apply for work or seek work with respect to any week.
    (e) Requirement of referral to work. (1) The State law shall 
provide, as required by section 202(a)(3)(F) of the Act and this part, 
that the State agency shall refer every claimant for Extended Benefits 
to work which is ``suitable work'' as provided in paragraph (d)(4) of 
this section, beginning with the week following the week in which the 
individual is furnished a written notice of classification of job 
prospects as required by paragraphs (d)(1) and (h) of this section.
    (2) To make such referrals, the State agency shall assure that each 
Extended Benefit claimant is registered for work and continues to be 
considered for referral to job openings as long as he/she continues to 
claim benefits.
    (3) In referring claimants to available job openings, the State 
agency shall apply to Extended Benefit claimants the same priorities, 
policies, and judgments as it does to other applicants, except that it 
shall not restrict referrals only to work at higher skill levels, prior 
rates of pay, customary work, or preferences as to work or pay for 
individuals whose prospects of obtaining work in their customary 
occupations have been classified as or determined to be ``not good.''
    (4) For referral purposes, any work which does not exceed the 
individual's capabilities shall be considered suitable work for an 
Extended Benefit claimant whose job prospects have been classified as or 
determined to be ``not good'', except as modified by this paragraph (e).
    (5) For Extended Benefit claimants whose prospects of obtaining work 
in their customary occupations have been classified as or determined to 
be ``not good'', work shall not be suitable, and referral to a job shall 
not be made, if--
    (i) The gross average weekly remuneration for the work for any week 
does not exceed the sum of the individual's weekly benefit amount plus 
any supplemental unemployment benefits (SUB) (as defined in section 
501(c)(17)(D) of the Internal Revenue Code of 1986) payable to the 
individual,
    (ii) The work is not offered in writing or is not listed with the 
State employment service,
    (iii) The work pays less than the higher of the minimum wage set in 
section 6(a)(1) of the Fair Labor Standards Act of 1938, without regard 
to any exemption, or any applicable State or local minimum wage, or
    (iv) Failure to accept or apply for the work would not result in a 
denial of compensation under the provisions of the applicable State law 
as defined in Sec. 615.2(o)(7).
    (6) In addition, if the State agency classifies or determines that 
an individual's prospects for obtaining work in his/her customary 
occupation within

[[Page 83]]

a reasonably short period are ``good,'' referral shall not be made to a 
job if such referral would not be made under the State law provisions 
applicable to claimants for regular benefits which are not sharable, and 
such referrals shall be limited to work which the individual is required 
to make a ``systematic and sustained effort'' to search for as defined 
in Sec. 615.2(o)(8).
    (7) For the purposes of the foregoing paragraphs of this paragraph 
(e), State law applies regarding whether members of labor organizations 
shall be referred to nonunion work in their customary occupations.
    (8) If the State law does not also apply this paragraph (e) to 
individuals who claim what would otherwise be sharable regular 
compensation, the State will not be entitled to payment under the Act 
and Sec. 615.14 in regard to such regular compensation.
    (f) Refusal of work. (1) The State law shall provide, as required by 
section 202(a)(3)(A)(i) of the Act and this part, that if an individual 
who claims Extended Benefits fails to accept an offer of work or fails 
to apply for work to which he/she was referred by the State agency--
    (i) If the individual's prospects for obtaining work in his/her 
customary occupation within a reasonably short period are determined to 
be ``good,'' the State agency shall determine whether the work is 
suitable under the standard State law provisions which apply to 
claimants for regular compensation which is not sharable, and if 
determined to be suitable the individual shall be ineligible for 
Extended Benefits for the week in which the individual fails to apply 
for or accept an offer of suitable work and thereafter until the 
individual is employed in at least four weeks with wages from such 
employment totalling not less than four times the individual's weekly 
benefit amount, as provided by the applicable State law; or
    (ii) If the individual's prospects for obtaining work in his/her 
customary occupation are determined to be ``not good,'' the State agency 
shall determine whether the work is suitable under the applicable State 
law provisions corresponding to sections 202(a)(3) (C) and (D) of the 
Act and paragraphs (e)(5) and (f)(2) of this section, and if determined 
to be suitable the individual shall be ineligible for Extended Benefits 
for the week in which the individual fails to apply for or accept an 
offer of suitable work and thereafter until the individual is employed 
in at least four weeks with wages from such employment totalling not 
less than four times the individual's weekly benefit amount, as provided 
by the applicable State law.
    (2) For an individual whose prospects of obtaining work in his/her 
customary occupation within the period specified by State law are 
classified or determined to be ``not good,'' the term ``suitable work'' 
shall mean any work which is within the individual's capabilities, 
except that work shall not be suitable if--
    (i) The gross average weekly remuneration for the work for any week 
does not exceed the sum of the individual's weekly benefit amount plus 
any supplemental unemployment benefits (SUB) (as defined in section 
501(c)(17)(D) of the Internal Revenue Code of 1986) payable to the 
individual,
    (ii) The work is not offered in writing or is not listed with the 
State employment service, or
    (iii) The work pays less than the higher of the minimum wage set in 
section 6(a)(1) of the Fair Labor Standards Act of 1938, without regard 
to any exemption, or any applicable State or local minimum wage,
    (iv) Failure to accept or apply for the work would not result in a 
denial of compensation under the provisions of the applicable State law 
as defined in Sec. 615.2(o)(7).
    (3) For the purposes of the foregoing paragraphs of this paragraph 
(f), State law applies regarding whether members of labor organizations 
shall be referred to nonunion work in their customary occupations.
    (4) If the State law does not also apply this paragraph (f) to 
individuals who claim what would otherwise be sharable regular 
compensation, the State will not be entitled to payment under the Act 
and Sec. 615.14 in regard to such regular compensation.
    (g) Actively seeking work. (1) The State law shall provide, as 
required by sections 202(a)(3) (A)(ii) and (E) of the

[[Page 84]]

Act and this part, that an individual who claims Extended Benefits shall 
be required to make a systematic and sustained effort (as defined in 
Sec. 615.2(o)(8)) to search for work which is ``suitable work'' as 
provided in paragraph (d)(4) of this section, throughout each week 
beginning with the week following the week in which the individual is 
furnished a written notice of classification of job prospects as 
required by paragraphs (d)(1) and (h) of this section, and to furnish to 
the State agency with each claim tangible evidence of such efforts.
    (2) If the individual fails to thus search for work, or to furnish 
tangible evidence of such efforts, he/she shall be ineligible for 
Extended Benefits for the week in which the failure occurred and 
thereafter until the individual is employed in at least four weeks with 
wages from such employment totalling not less than four times the 
individual's weekly benefit amount, as provided by the applicable State 
law.
    (3)(i) A State law may provide that eligibility for Extended 
Benefits be determined under the applicable provisions of State law for 
regular compensation which is not sharable, without regard to the active 
search provisions otherwise applicable in paragraph (g)(1) of this 
section, for any individual who fails to engage in a systematic and 
sustained search for work throughout any week because such individual 
is--
    (A) Serving on jury duty, or
    (B) Hospitalized for treatment of an emergency or life-threatening 
condition.
    (ii) The conditions in (i) (A) and (B) must be applied to 
individuals filing claims for Extended Benefits in the same manner as 
applied to individuals filing claims for regular compensation which is 
not sharable compensation.
    (4) For the purposes of the foregoing paragraphs of this paragraph 
(g), State law applies regarding whether members of labor organizations 
shall be required to seek nonunion work in their customary occupations.
    (5) If the State law does not also apply this paragraph (g) to 
individuals who claim what would otherwise be sharable regular 
compensation, the State will not be entitled to payment under the Act 
and Sec. 615.14 in regard to such regular compensation.
    (h) Information to claimants. The State agency shall assure that 
each Extended Benefit claimant (and claimant for sharable regular 
compensation) is informed in writing--
    (1) Of the State agency's classification of his/her prospects for 
finding work in his/her customary occupation within the time set out in 
paragraph (d) as ``good'' or ``not good,''
    (2) What kind of jobs he/she may be referred to, depending on the 
classification of his/her job prospects,
    (3) What kind of jobs he/she must be actively engaged in seeking 
each week depending on the classification of his/her job prospects, and 
what tangible evidence of such search must be furnished to the State 
agency with each claim for benefits, and
    (4) The resulting disqualification if he/she fails to apply for work 
to which referred, or fails to accept work offered, or fails to actively 
engage in seeking work or to furnish tangible evidence of such search 
for each week for which Extended Benefits or sharable regular benefits 
are claimed, beginning with the week following the week in which such 
information is furnished in writing to the individual.



Sec. 615.9  Restrictions on entitlement.

    (a) Disqualifications. If the week of unemployment for which an 
individual claims Extended Benefits is a week to which a 
disqualification for regular compensation applies, including a reduction 
because of the receipt of disqualifying income, or would apply but for 
the fact that the individual has exhausted all rights to such 
compensation, the individual shall be disqualified in the same degree 
from receipt of Extended Benefits for that week.
    (b) Additional compensation. No individual shall be paid additional 
compensation and Extended Benefits with respect to the same week. If 
both are payable by a State with respect to the same week, the State law 
may provide for the payment of Extended Benefits instead of additional 
compensation with respect to the week. If Extended Benefits are payable 
to an individual by one State and additional compensation is payable to 
the individual for the

[[Page 85]]

same week by another State, the individual may elect which of the two 
types of compensation to claim.
    (c) Interstate claims. An individual who files claims for Extended 
Benefits under the Interstate Benefit Payment Plan, in a State which is 
not in an Extended Benefit Period for the week(s) for which Extended 
Benefits are claimed, shall not be paid more than the first two weeks 
for which he/she files such claims.
    (d) Other restrictions. The restrictions on entitlement specified in 
this section are in addition to other restrictions in the Act and this 
part on eligibility for and entitlement to Extended Benefits.



Sec. 615.10  Special provisions for employers.

    (a) Charging contributing employers. (1) Section 3303(a)(1) of the 
Internal Revenue Code of 1986 (26 U.S.C. 3303(a)(1)) does not require 
that Extended Benefits paid to an individual be charged to the 
experience rating accounts of employers.
    (2) A State law may, however, consistently with section 3303(a)(1), 
require the charging of Extended Benefits paid to an individual; and if 
it does, it may provide for charging all or any portion of such 
compensation paid.
    (3) Sharable regular compensation must be charged as all other 
regular compensation is charged under the State law.
    (b) Payments by reimbursing employers. If an employer is reimbursing 
the State unemployment fund in lieu of paying contributions pursuant to 
the requirements of State law conforming with sections 3304(a)(6)(B) and 
3309(a)(2) of the Internal Revenue Code of 1986 (26 U.S.C. 3304(a)(6)(B) 
and 3309(a)(2)), the State law shall require the employer to reimburse 
the State unemployment fund for not less than 50 percent of any sharable 
compensation that is attributable under the State law to service with 
such employer; and as to any compensation which is not sharable 
compensation under Sec. 615.14, the State law shall require the 
employer to reimburse the State unemployment fund for 100 percent, 
instead of 50 percent, of any such compensation paid.



Sec. 615.11  Extended Benefit Periods.

    (a) Beginning date. Except as provided in paragraph (d) of this 
section, an Extended Benefit Period shall begin in a State on the first 
day of the third calendar week after a week for which there is a State 
``on'' indicator in that State.
    (b) Ending date. Except as provided in paragraph (c) of this 
section, an Extended Benefit Period in a State shall end on the last day 
of the third week after the first week for which there is a State 
``off'' indicator in that State.
    (c) Duration. An Extended Benefit Period which becomes effective in 
any State shall continue in effect for not less than 13 consecutive 
weeks.
    (d) Limitation. No Extended Benefit Period may begin in any State by 
reason of a State ``on'' indicator before the 14th week after the ending 
of a Prior Extended Benefit Period with respect to such State.



Sec. 615.12  Determination of ``on'' and ``off'' indicators.

    (a) Standard State indicators. (1) There is a State ``on'' indicator 
in a State for a week if the head of the State agency determines, in 
accordance with this section, that, for the period consisting of that 
week and the immediately preceding 12 weeks, the rate of insured 
unemployment (not seasonally adjusted) under the State law--
    (i) Equalled or exceeded 120 percent of the average of such rates 
for the corresponding 13-week periods ending in each of the preceding 
two calendar years, and
    (ii) Equalled or exceeded 5.0 percent.
    (2) There is a State ``off'' indicator in a State for a week if the 
head of the State agency determines, in accordance with this section, 
that, for the period consisting of that week and the immediately 
preceding 12 weeks, the rate of insured unemployment (not seasonally 
adjusted) under the State law--
    (i) Was less than 120 percent of the average of such rates for the 
corresponding 13 week periods ending in each of the preceding two 
calendar years, or
    (ii) Was less than 5.0 percent.
    (3) The standard State indicators in this paragraph (a) shall apply 
to weeks beginning after September 25, 1982.

[[Page 86]]

    (b) Optional State indicators. (1)(i) A State may, in addition to 
the State indicators in paragraph (a) of this section, provide by its 
law that there shall be a State ``on'' indicator in the State for a week 
if the head of the State agency determines, in accordance with this 
section, that, for the period consisting of that week and the 
immediately preceding 12 weeks, the rate of insured unemployment (not 
seasonally adjusted) under the State law equalled or exceeded 6.0 
percent even though it did not meet the 120 percent factor required 
under paragraph (a).
    (ii) A State which adopts the optional State indicator must also 
provide that, when it is in an Extended Benefit Period, there will not 
be an ``off'' indicator until (A) the State rate of insured unemployment 
is less than 6.0 percent, and (B) either its rate of insured 
unemployment is less than 5.0 percent or is less than 120 percent of the 
average of such rates for the corresponding 13-week periods ending in 
each of the preceding two calendar years.
    (2) The optional State indicators in this paragraph (b) shall apply 
to weeks beginning after September 25, 1982.
    (c) Computation of rate of insured unemployment--(1) Equation. Each 
week the State agency head shall calculate the rate of insured 
unemployment under the State law (not seasonally adjusted) for purposes 
of determining the State ``on'' and ``off'' and ``no change'' 
indicators. In making such calculations the State agency head shall use 
a fraction, the numerator of which shall be the weekly average number of 
weeks claimed in claims filed (not seasonally adjusted) in the State in 
the 13-week period ending with the week for which the determination is 
made, and the denominator of which shall be the average monthly 
employment covered by the State law for the first four of the last six 
calendar quarters ending before the close of the 13-week period. The 
quotient obtained is to be computed to four decimal places, and is not 
otherwise rounded, and is to be expressed as a percentage by multiplying 
the resultant decimal fraction by 100.
    (2) Counting weeks claimed. To determine the average number of weeks 
claimed in claims filed to serve as the numerator under paragraph 
(c)(1), the State agency shall include claims for all weeks for regular 
compensation, including claims taken as agent State under the Interstate 
Benefit Payment Plan. It shall exclude claims--
    (i) For Extended Benefits under any State law,
    (ii) For additional compensation under any State law, and
    (iii) Under any Federal law except joint claims which combine 
regular compensation and compensation payable under 5 U.S.C. chapter 85.
    (3) Method of computing the State 120 percent factor. The rate of 
insured unemployment for a current 13-week period shall be divided by 
the average of the rates of insured unemployment for the corresponding 
13-week periods in each of the two preceding calendar years to determine 
whether the rate is equal to 120 percent of the average rate for the two 
years. The quotient obtained shall be computed to four decimal places 
and not otherwise rounded, and shall be expressed as a percentage by 
multiplying the resultant decimal fraction by 100. The average of the 
rates for the corresponding 13-week periods in each of the two preceding 
calendar years shall be one-half the sum of such rates computed to four 
decimal places and not otherwise rounded. To determine which are the 
corresponding weeks in the preceding years--
    (i) The weeks shall be numbered starting with week number 1 as the 
first week ending in each calendar year.
    (ii) The 13-week period ending with any numbered week in the current 
year shall correspond to the period ending with that same numbered week 
in each preceding year.
    (iii) When that period in the current year ends with week number 53, 
the corresponding period in preceding years shall end with week number 
52 if there is no week number 53.
    (d) Amendment of State indicator rates. (1) Because figures used for 
determinations under this section may contain errors and because it is 
not practical to apply any correction in a State ``on'' or ``off'' or 
``no change'' indicator retroactively either to recover amounts paid or 
to adjudicate claims for past periods in which claimants failed to make 
the

[[Page 87]]

required active search for work, any determination by the head of a 
State agency of an ``on'' or ``off'' or ``no change'' indicator shall 
not be corrected more than three weeks after the close of the week to 
which it applies. If any figure used in the computation of a rate of 
insured unemployment is later found to be wrong, the correct figure 
shall be used to redetermine the rate of insured unemployment and of the 
120 percent factor for that week and all subsequent weeks, but no 
determination of previous ``on'' or ``off'' or ``no change'' indicator 
shall be affected unless the redetermination is made within the time the 
indicator may be corrected under the first sentence of this paragraph 
(d)(1). Any change hereunder shall be subject to the concurrence of the 
Department as provided in paragraph (e) of this section.
    (2) Any determination of the rate of insured unemployment and its 
effect on an ``on'' or ``off'' or ``no change'' indicator may be 
challenged by appeal or by other proceedings, as shall be provided by 
State law, but the implementation of any change in the indicator from 
one week to another shall not be stayed or postponed. In a hearing on 
any such challenge the issue may be limited to the accuracy of the 
determination of the rate of insured unemployment. If an error in that 
rate affecting the ``on'' or ``off'' or ``no change'' indicator is 
discovered in such a hearing or other proceeding, its retroactive effect 
shall be limited as provided in paragraph (d)(1).
    (e) Notice to Secretary. Within 10 calendar days after the end of 
any week with respect to which the head of a State agency has determined 
that there is an ``on,'' or ``off,'' or ``no change'' indicator in the 
State, the head of the State agency shall notify the Department of the 
determination. The notice shall state clearly the State agency head's 
determination of the specific week for which there is a State ``on'' or 
``off'' or ``no change'' indicator. The notice shall include also the 
State agency head's findings supporting the determination, with a 
certification that the findings are made in accordance with the 
requirements of this Sec. 615.15. Determinations and findings made as 
provided in this section shall be accepted by the Department, but the 
head of the State agency shall comply with such provisions as the 
Department may find necessary to assure the correctness and verification 
of notices given under this paragraph. A notice shall not become final 
for purposes of the Act and this part until such notice is accepted by 
the Department.



Sec. 615.13  Announcement of the beginning and ending of Extended 
Benefit Periods.

    (a) State indicators. Upon receipt of the notice required by Sec. 
615.12(e) which is acceptable to the Department, the Department shall 
publish in the Federal Register a notice of the State agency head's 
determination that there is an ``on'' or an ``off'' indicator in the 
State, as the case may be, the name of the State and the beginning or 
ending of the Extended Benefit Period, whichever is appropriate. The 
Department shall also notify appropriate news media, the heads of all 
other State agencies, and the Regional Administrators of the Employment 
and Training Administration of the State agency head's determination of 
such State ``on'' or ``off'' indicator and of its effect.
    (b) Publicity by State. Whenever a State agency head determines that 
there is an ``on'' indicator in the State by reason of which an Extended 
Benefit Period will begin in the State, or an ``off'' indicator by 
reason of which an Extended Benefit Period in the State will end, the 
head of the State agency shall promptly announce the determination 
through appropriate news media in the State and notify the Department in 
accordance with Sec. 615.12(e). Such announcement shall include the 
beginning or ending date of the Extended Benefit Period, whichever is 
appropriate. In the case of an Extended Benefit Period that is about to 
begin, the announcement shall describe clearly the unemployed 
individuals who may be eligible for Extended Benefits during the period, 
and in the case of an Extended Benefit Period that is about to end, the 
announcement shall also describe clearly the individuals whose 
entitlement to Extended Benefits will be terminated.

[[Page 88]]

    (c) Notices to individuals. (1) Whenever there has been a 
determination that an Extended Benefit Period will begin in a State, the 
State agency shall provide prompt written notice of potential 
entitlement to Extended Benefits to each individual who has established 
a benefit year in the State that will not end prior to the beginning of 
the Extended Benefit Period, and who exhausted all rights under the 
State law to regular compensation before the beginning of the Extended 
Benefit Period.
    (2) The State agency shall provide such notice promptly to each 
individual who begins to claim sharable regular benefits or who exhausts 
all rights under the State law to regular compensation during an 
Extended Benefit Period, including exhaustion by reason of the 
expiration of the individual's benefit year.
    (3) The notices required by paragraphs (c) (1) and (2) of this 
section shall describe those actions required of claimants for sharable 
regular compensation and Extended Benefits and those disqualifications 
which apply to such benefits which are different from those applicable 
to other claimants for regular compensation which is not sharable.
    (4) Whenever there has been a determination that an Extended Benefit 
Period will end in a State, the State agency shall provide prompt 
written notice to each individual who is currently filing claims for 
Extended Benefits of the forthcoming end of the Extended Benefit Period 
and its effect on the individual's right to Extended Benefits.



Sec. 615.14  Payments to States.

    (a) Sharable compensation. (1) The Department shall promptly upon 
receipt of a State's report of its expenditures for a calendar month 
reimburse the State in the amount of the sharable compensation the State 
is entitled to receive under the Act and this part.
    (2) The Department may instead advance to a State for any period not 
greater than one day the amount the Department estimates the State will 
be entitled to be paid under the Act and this part for that period.
    (3) Any payment to a State under this section shall be based upon 
the Department's determination of the amount the State is entitled to be 
paid under the Act and this part, and such amount shall be reduced or 
increased, as the case may be, by any amount by which the Department 
finds that a previous payment was greater or less than the amount that 
should have been paid to the State.
    (4) Any payment to a State pursuant to this paragraph (a) shall be 
made by a transfer from the extended unemployment compensation account 
in the Unemployment Trust Fund to the account of the State in such Fund, 
in accordance with section 204(e) of the Act.
    (b) Payments not to be made to States. Because a State law must 
contain provisions fully consistent with sections 202 and 203 of the 
Act, the Department shall make no payment under paragraph (a) of this 
section, whether or not the State is certified under section 3304(c) of 
the Internal Revenue Code of 1986--
    (1) In respect of any regular or extended compensation paid to any 
individual for any week if the State does not apply--
    (i) The provisions of the State law required by section 202(a)(3) 
and this part, relating to failure to accept work offered or to apply 
for work or to actively engage in seeking work, as to weeks beginning 
after October 31, 1981, except for any State which the State legislature 
did not meet in 1981 as to weeks beginning after October 1, 1982 or the 
provisions of State law required by section 202(a)(4) and this part, 
relating to terminating a disqualification, as to weeks beginning after 
March 31, 1981;
    (ii) The provisions of the State law required by section 202(a)(5) 
and this part, relating to qualifying employment, as to weeks beginning 
after September 25, 1982; or
    (2) In respect of any regular or extended compensation paid to any 
individual for any week which was not payable by reason of the provision 
of the State law required by section 202(c) and this part, as to weeks 
which begin after May 31, 1981, or May 31, 1982, as determined by the 
Department with regard to each State.
    (c) Payments not to be reimbursed. The Department shall make no 
payment

[[Page 89]]

under paragraph (a) of this section, whether or not the State is 
certified under section 3304(c) of the Internal Revenue Code of 1986, in 
respect of any regular or extended compensation paid under a State law--
    (1) As provided in section 204(a)(1) of the Act and this part, if 
the payment made was not sharable extended compensation or sharable 
regular compensation;
    (2) As provided in section 204(a)(2)(A) of the Act, if the State is 
entitled to reimbursement for the payment under the provisions of any 
Federal law other than the Act;
    (3) As provided in section 204(a)(2)(B) of the Act, if for the first 
week in an individual's eligibility period with respect to which 
Extended Benefits or sharable regular benefits are paid to the 
individual, that first week begins after December 5, 1980, and the State 
law provides for the payment (at any time or under any circumstances) of 
regular compensation to any individual for the first week of 
unemployment in any such individual's benefit year; except that--
    (i) In the case of a State with respect to which the Department 
finds that legislation is required in order to end the payment (at any 
time or under any circumstances) of regular compensation for any such 
first week of unemployment, this paragraph (c)(3) shall not apply to the 
first week in an individual's eligibility period which began before the 
end of the first regularly scheduled session of the State legislature 
that ends after January 4, 1981, as determined by the Department; and
    (ii) In the case of a State law which is changed so that regular 
compensation is not paid at any time or under any circumstances with 
respect to the first week of unemployment in any individual's benefit 
year, this paragraph (c)(3) shall not apply to any week which begins 
after the effective date of such change in the State law; and
    (iii) In the case of a State law which is changed so that regular 
compensation is paid at any time or under any circumstances with respect 
to the first week of unemployment in any individual's benefit year, this 
paragraph (c)(3) shall apply to all weeks which begin after the 
effective date of such change in the State law;
    (4) As provided in section 204(a)(2)(C) of the Act and this part, 
for any week with respect to which Extended Benefits are not payable 
because of the payment of trade readjustment allowances, as provided in 
section 233(d) of the Trade Act of 1974, and Sec. 615.7(d). This 
paragraph (c)(4) applies to any week which begins after October 31, 
1982, or 1983, as determined by the Department in regard to each State;
    (5) As provided in section 204(a)(2)(D) of the Act and this part, if 
the State does not provide for a benefit structure under which benefits 
are rounded down to the next lower dollar amount, for the 50 percent 
Federal share of the amount by which sharable regular or Extended 
Benefits paid to any individual exceeds the nearest lower full dollar 
amount. This paragraph (c)(5) shall apply to any sharable regular 
compensation or Extended Benefits paid to individuals whose eligibility 
periods begin on or after October 1, 1983, unless a later date, as 
determined by the Department, applies in a particular State under the 
grace period of section 191(b)(2) of Pub. L. 97-248;
    (6) As provided in section 204(a)(3) of the Act, to the extent that 
such compensation is based upon employment and wages in service 
performed for governmental entities or instrumentalities to which 
section 3306(c)(7) of the Internal Revenue Code of 1986 (26 U.S.C. 
3306(c)(7)) applies, in the proportion that wages for such service in 
the base period bear to the total base period wages;
    (7) If the payment made was not sharable extended compensation or 
sharable regular compensation because the payment was not consistent 
with the requirements of--
    (i) Section 202(a)(3) of the Act, and Sec. 615.8 (e), (f), or (g);
    (ii) Section 202(a)(4) of the Act, and Sec. 615.8(c); or
    (iii) Section 202(a)(5) of the Act, and Sec. 615.4(b);
    (8) If the payment made was not sharable extended compensation or 
sharable regular compensation because there was not in effect in the 
State an Extended Benefit Period in accord with the Act and this part; 
or

[[Page 90]]

    (9) For any week with respect to which the claimant was either 
ineligible for or not entitled to the payment.
    (d) Effectuating authorization for reimbursement. (1) If the 
Department believes that reimbursement should not be authorized with 
respect to any payments made by a State that are claimed to be sharable 
compensation paid by the State, because the State law does not contain 
provisions required by the Act and this part, or because such law is not 
interpreted or applied in rules, regulations, determinations or 
decisions in a manner that is consistent with those requirements, the 
Department may at any time notify the State agency in writing of the 
Department's view. The State agency shall be given an opportunity to 
present its views and arguments if desired.
    (2) The Department shall thereupon decide whether the State law 
fails to include the required provisions or is not interpreted and 
applied so as to satisfy the requirements of the Act and this part. If 
the Department finds that such requirements are not met, the Department 
shall notify the State agency of its decision and the effect thereof on 
the State's entitlement to reimbursement under this section and the 
provisions of section 204 of the Act.
    (3) Thereafter, the Department shall not authorize any payment under 
paragraph (a) of this section in respect of any sharable regular or 
extended compensation if the State law does not contain all of the 
provisions required by sections 202 and 203 of the Act and this part, or 
if the State law, rules, regulations, determinations or decisions are 
not consistent with such requirements, or which would not have been 
payable if the State law contained the provisions required by the Act 
and this part or if the State law, rules, regulations, determinations or 
decisions had been consistent with such requirements. Loss of 
reimbursement for such compensation shall begin with the date the State 
law was required to contain such provisions, and shall continue until 
such time as the Department finds that such law, rules and regulations 
have been revised or the interpretations followed pursuant to such 
determinations and decisions have been overruled and payments are made 
or denied so as to accord with the Federal law requirements of the Act 
and this part, but no reimbursement shall be authorized with respect to 
any payment that did not fully accord with the Act and this part.
    (4) A State agency may request reconsideration of a decision issued 
pursuant to paragraph (d)(2) above, within 10 calendar days of the date 
of such decision, and shall be given an opportunity to present views and 
arguments if desired.
    (5) Concurrence of the Department in any State law provision, rule, 
regulation, determination or decision shall not be presumed from the 
absence of notice issued pursuant to this section or from a 
certification of the State issued pursuant to section 3304(c) of the 
Internal Revenue Code of 1986.
    (6) Upon finding that a State has made payments for which it claims 
reimbursement that are not consistent with the Act or this part, such 
claim shall be denied; and if the State has already been paid such claim 
in advance or by reimbursement, it shall be required to repay the full 
amount to the Department. Such repayment may be made by transfer of 
funds from the State's account in the Unemployment Trust Fund to the 
Extended Unemployment Compensation Account in the Fund, or by offset 
against any current advances or reimbursements to which the State is 
otherwise entitled, or the amount repayable may be recovered for the 
Extended Unemployment Compensation Account by other means and from any 
other sources that may be available to the United States or the 
Department.
    (e) Compensation under Federal unemployment compensation programs. 
The Department shall promptly reimburse each State which has paid 
sharable compensation based on service covered by the UCFE and UCX 
Programs (parts 609 and 614 of this chapter, respectively) pursuant to 5 
U.S.C. chapter 85, an amount which represents the full amount of such 
sharable compensation paid under the State law, or may make advances to 
the State. Such amounts shall be paid from the Federal Employees 
Compensation Account established

[[Page 91]]

for those programs, rather than from the Extended Unemployment 
Compensation Account.
    (f) Combined-wage claims. If an individual was paid benefits under 
the Interstate Arrangement for Combining Employment and Wages (part 616 
of this chapter) any payment required by paragraph (a) of this section 
shall be made to the States which contributed the wage credits.
    (g) Interstate claims. Where sharable compensation is paid to an 
individual under the provisions of the Interstate Benefit Payment Plan, 
any payment required by paragraph (a) of this section shall be made only 
to the liable State.



Sec. 615.15  Records and reports.

    (a) General. State agencies shall furnish to the Secretary such 
information and reports and make such studies as the Secretary decides 
are necessary or appropriate for carrying out the purposes of the Act 
and this part.
    (b) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the Extended Benefit Program as the 
Department requires, and will make all such records available for 
inspection, examination and audit by such Federal officials or employees 
as the Secretary or the Department may designate or as may be required 
by law.
    (c) Weekly report of Extended Benefit data. Each State shall file 
with the Department within 10 calendar days after the end of each 
calendar week a weekly report entitled ETA 539, Extended Benefit Data. 
The report shall include:
    (1) The data reported on the form ETA 539 for the week ending 
(date). Week-ending dates shall always be the Saturday ending date of 
the calendar week beginning at 12:01 a.m. Sunday and ending 12:00 p.m. 
Saturday.
    (2)(i) The number of continued weeks claimed for regular 
compensation in claims filed during the week ending (date). The report 
shall include intrastate continued weeks claimed and interstate 
continued weeks claimed (taken as agent State) but shall exclude 
interstate continued weeks claimed (received as liable State) and 
continued weeks claimed for regular compensation filed solely under 5 
U.S.C. chapter 85; and
    (ii) The report of the number of continued weeks claimed filed in 
the State for regular compensation shall not be adjusted for 
seasonality.
    (3) The average weekly number of weeks claimed in claims filed in 
the most recent calendar week and the immediately preceding 12 calendar 
weeks.
    (4) The rate of insured unemployment for the current 13-week period.
    (5) The average of the rates of insured unemployment in 
corresponding 13-week periods in the preceding two years.
    (6) The current rate of insured unemployment as a percentage of the 
average of the rates in the corresponding 13-week periods in the 
preceding two years.
    (7) The 12 month average monthly employment covered by the State law 
for the first 4 of the last 6 complete calendar quarters ending prior to 
the end of the last week of the current 13-week period to which the 
insured unemployment data relate. Such covered employment shall exclude 
Federal civilian and military employment covered by 5 U.S.C. chapter 85.
    (8) The date that a State Extended Benefit Period begins or ends, or 
a report that there is no change in the existing Extended Benefit Period 
status.
    (d) Methodology. The State agency head shall submit to the 
Department, for approval, the method used to identify and select the 
weeks claimed which are used in the determination of an ``on'' or 
``off'' or ``no change'' indicator. Any change proposed in the method of 
identification and selection of such weeks claimed constitutes a new 
plan which must be submitted to and approved by the Department prior to 
implementing the new plan.

(Approved by the Office of Management and Budget under control number 
1205-0028)



PART 616_INTERSTATE ARRANGEMENT FOR COMBINING EMPLOYMENT AND WAGES
--Table of Contents




Sec.
616.1 Purpose of arrangement.
616.2 Consultation with the State agencies.
616.3 Interstate cooperation.

[[Page 92]]

616.4 Rules, regulations, procedures, forms--resolution of 
          disagreements.
616.5 Effective date.
616.6 Definitions.
616.7 Election to file a Combined-Wage Claim.
616.8 Responsibilities of the paying State.
616.9 Responsibilities of transferring States.
616.10 Reuse of employment and wages.
616.11 Amendment of arrangement.

    Authority: Sec. 3304(a)(9)(B), 84 Stat. 702; 26 U.S.C. 
3304(a)(9)(B); Secretary's Order No. 20-71, August 13, 1971.

    Source: 36 FR 24992, Dec. 28, 1971, unless otherwise noted.



Sec. 616.1  Purpose of arrangement.

    This arrangement is approved by the Secretary under the provisions 
of section 3304(a)(9)(B) of the Federal Unemployment Tax Act to 
establish a system whereby an unemployed worker with covered employment 
or wages in more than one State may combine all such employment and 
wages in one State, in order to qualify for benefits or to receive more 
benefits.



Sec. 616.2  Consultation with the State agencies.

    As required by section 3304(a)(9)(B), this arrangement has been 
developed in consultation with the State unemployment compensation 
agencies. For purposes of such consultation in its formulation and any 
future amendment the Secretary recognizes, as agents of the State 
agencies, the duly designated representatives of the Interstate 
Conference of Employment Security Agencies.



Sec. 616.3  Interstate cooperation.

    Each State agency will cooperate with every other State agency by 
implementing such rules, regulations, and procedures as may be 
prescribed for the operation of this arrangement. Each State agency 
shall identify the paying and the transferring State with respect to 
Combined-Wage Claims filed in its State.



Sec. 616.4  Rules, regulations, procedures, forms--resolution of 
disagreements.

    All State agencies shall operate in accordance with such rules, 
regulations, and procedures, and shall use such forms, as shall be 
prescribed by the Secretary in consultation with the State unemployment 
compensation agencies. All rules, regulations, and standards prescribed 
by the Secretary with respect to intrastate claims will apply to claims 
filed under this arrangement unless they are clearly inconsistent with 
the arrangement. The Secretary shall resolve any disagreement between 
State agencies concerning the operation of the arrangement, with the 
advice of the duly designated representatives of the State agencies.



Sec. 616.5  Effective date.

    This arrangement shall apply to all new claims (to establish a 
benefit year) filed under it after December 31, 1971.



Sec. 616.6  Definitions.

    These definitions apply for the purpose of this arrangement and the 
procedures issued to effectuate it.
    (a) State. ``State'' includes the States of the United States of 
America, the District of Columbia, and the Commonwealth of Puerto Rico, 
and includes the Virgin Islands effective on the day after the day on 
which the Secretary approves under section 3304(a) of the Internal 
Revenue Code of 1954 (26 U.S.C. 3304(a)), an unemployment compensation 
law submitted to the Secretary by the Virgin Islands for approval.
    (b) State agency. The agency which administers the unemployment 
compensation law of a State.
    (c) Combined-Wage Claim. A claim filed under this arrangement.
    (d) Combined-Wage Claimant. A claimant who has covered wages under 
the unemployment compensation law of more than one State and who has 
filed a claim under this arrangement.
    (e) Paying State. (1) The State in which a Combined-Wage Claimant 
files a Combined-Wage Claim, if the claimant qualifies for unemployment 
benefits in that State on the basis of combined employment and wages.
    (2) If the State in which a Combined-Wage Claimant files a Combined-
Wage Claim is not the Paying State under the criterion set forth in 
paragraph (e)(1) of this section, or if the Combined-Wage Claim is filed 
in Canada or the Virgin Islands, then the Paying State shall be that 
State where the

[[Page 93]]

Combined-Wage Claimant was last employed in covered employment among the 
States in which the claimant qualifies for unemployment benefits on the 
basis of combined employment and wages: Provided, That, this paragraph 
(e)(2) shall read as if the Virgin Islands was not referred to therein, 
effective on the day after the day on which the Secretary approves under 
section 3304(a) of the Internal Revenue Code of 1954 (26 U.S.C. 
3304(a)), an unemployment compensation law submitted to the Secretary by 
the Virgin Islands for approval.
    (f) Transferring State. A State in which a Combined-Wage Claimant 
had covered employment and wages in the base period of a paying State, 
and which transfers such employment and wages to the paying State for 
its use in determining the benefit rights of such claimant under its 
law.
    (g) Employment and wages. ``Employment'' refers to all services 
which are covered under the unemployment compensation law of a State, 
whether expressed in terms of weeks of work or otherwise. ``Wages'' 
refers to all remuneration for such employment.
    (h) Secretary. The Secretary of Labor of the United States.
    (i) Base period and benefit year. The base period and benefit year 
applicable under the unemployment compensation law of the paying State.

[36 FR 24992, Dec. 28, 1971, as amended at 39 FR 45215, Dec. 31, 1974; 
43 FR 2625, Jan. 17, 1978]



Sec. 616.7  Election to file a Combined-Wage Claim.

    (a) Any unemployed individual who has had employment covered under 
the unemployment compensation law of two or more States, whether or not 
he is monetarily qualified under one or more of them, may elect to file 
a Combined-Wage Claim. He may not so elect, however, if he has 
established a benefit year under any State or Federal unemployment 
compensation law and:
    (1) The benefit year has not ended, and
    (2) He still has unused benefit rights based on such benefit 
year.\1\
---------------------------------------------------------------------------

    \1\ The Federal-State Extended Unemployment Compensation Act of 
1970, title II, Public Law 91-373, section 202(a)(1), limits the payment 
of extended benefits with respect to any week to individuals who have no 
rights to regular compensation with respect to such week under any State 
unemployment compensation law or to compensation under any other Federal 
law and in certain other instances. This provision precludes any 
individual from receiving any Federal-State extended benefits with 
respect to any week for which he is eligible to receive regular benefits 
based on a Combined Wage Claim. (See section 5752, part V of the 
Employment Security Manual.)
---------------------------------------------------------------------------

    (b) For the purposes of this arrangement, a claimant will not be 
considered to have unused benefit rights based on a benefit year which 
he has established under a State or Federal unemployment compensation 
law if:
    (1) He has exhausted his rights to all benefits based on such 
benefit year; or
    (2) His rights to such benefits have been postponed for an 
indefinite period or for the entire period in which benefits would 
otherwise be payable; or
    (3) Benefits are affected by the application of a seasonal 
restriction.
    (c) If an individual elects to file a Combined-Wage Claim, all 
employment and wages in all States in which he worked during the base 
period of the paying State must be included in such combining, except 
employment and wages which are not transferrable under the provisions of 
Sec. 616.9(b).
    (d) A Combined-Wage Claimant may withdraw his Combined-Wage Claim 
within the period prescribed by the law of the paying State for filing 
an appeal, protest, or request for redetermination (as the case may be) 
from the monetary determination of the Combined-Wage Claim, provided he 
either:
    (1) Repays in full any benefits paid to him thereunder, or
    (2) Authorizes the State(s) against which he files a substitute 
claim(s) for benefits to withhold and forward to the paying State a sum 
sufficient to repay such benefits.
    (e) If the Combined-Wage Claimant files his claim in a State other 
than the paying State, he shall do so pursuant to the Interstate Benefit 
Payment Plan.

[[Page 94]]



Sec. 616.8  Responsibilities of the paying State.

    (a) Transfer of employment and wages--payment of benefits. The 
paying State shall request the transfer of a Combined-Wage Claimant's 
employment and wages in all States during its base period, and shall 
determine his entitlement to benefits (including additional benefits, 
extended benefits and dependents' allowances when applicable) under the 
provisions of its law based on employment and wages in the paying State, 
if any, and all such employment and wages transferred to it hereunder. 
The paying State shall apply all the provisions of its law to each 
determination made hereunder, even if the Combined-Wage Claimant has no 
earnings in covered employment in that State, except that the paying 
State may not determine an issue which has previously been adjudicated 
by a transferring State. Such exception shall not apply, however, if the 
transferring State's determination of the issue resulted in making the 
Combined-Wage Claim possible under Sec. 616.7(b)(2). If the paying 
State fails to establish a benefit year for the Combined-Wage Claimant, 
or if he withdraws his claim as provided herein, it shall return to each 
transferring State all employment and wages thus unused.
    (b) Notices of determination. The paying State shall give to the 
claimant a notice of each of its determinations on his Combined-Wage 
Claim that he is required to receive under the Secretary's Claim 
Determinations Standard and the contents of such notice shall meet such 
Standard. When the claimant is filing his Combined-Wage Claims in a 
State other than the paying State, the paying State shall send a copy of 
each such notice to the local office in which the claimant filed such 
claims.
    (c) Redeterminations. (1) Redeterminations may be made by the paying 
State in accordance with its law based on additional or corrected 
information received from any source, including a transferring State, 
except that such information shall not be used as a basis for changing 
the paying State if benefits have been paid under the Combined-Wage 
Claim.
    (2) When a determination is made, as provided in paragraph (a) of 
this section, which suspends the use of wages earned in employment with 
an educational institution during a prescribed period between successive 
academic years or terms or other periods as prescribed in the law of the 
paying State in accordance with section 3304(a)(6)(A)(i)-(iv) of the 
Internal Revenue Code of 1954, the paying State shall furnish each 
transferring State involved in the combined-Wage Claim an adjusted 
determination used to recompute each State's proportionate share of any 
charges that may accumulate for benefits paid during the period of 
suspended use of school wages. Wages which are suspended shall be 
retained by the paying State for possible future reinstatement to the 
Combined-Wage Claim and shall not be returned to the transferring State.
    (d) Appeals. (1) Except as provided in paragraph (d)(3) of this 
section, where the claimant files his Combined-Wage Claim in the paying 
State, any protest, request for redetermination or appeal shall be in 
accordance with the law of such State.
    (2) Where the claimant files his Combined-Wage Claim in a State 
other than the paying State, or under the circumstances described in 
paragraph (d)(3) of this section, any protest, request for 
redetermination or appeal shall be in accordance with the Interstate 
Benefit Payment Plan.
    (3) To the extent that any protest, request for redetermination or 
appeal involves a dispute as to the coverage of the employing unit or 
services in a transferring State, or otherwise involves the amount of 
employment and wages subject to transfer, the protest, request for 
redetermination or appeal shall be decided by the transferring State in 
accordance with its law.
    (e) Recovery of prior overpayments. If there is an overpayment 
outstanding in a transferring State and such transferring State so 
requests, the overpayment shall be deducted from any benefits the paying 
State would otherwise pay to the claimant on his Combined-Wage Claim 
except to the extent prohibited by the law of the paying State. The 
paying State shall transmit the amount deducted to the transferring 
State or credit the deduction against

[[Page 95]]

the transferring State's required reimbursement under this arrangement. 
This paragraph shall apply to overpayments only if the transferring 
State certifies to the paying State that the determination of 
overpayment was made within 3 years before the Combined-Wage Claim was 
filed and that repayment by the claimant is legally required and 
enforceable against him under the law of the transferring State.
    (f) Statement of benefit charges. (1) At the close of each calendar 
quarter, the paying State shall send each transferring State a statement 
of benefits charged during such quarter to such State as to each 
Combined-Wage Claimant.
    (2) Except as provided in paragraphs (c)(2), (f)(3), and (f)(5) of 
this section, each such charge shall bear the same ratio to the total 
benefits paid to the Combined-Wage Claimant by the paying State as the 
claimant's wages transferred by the transferring State bear to the total 
wages used in such determination. Each such ratio shall be computed as a 
percentage, to three or more decimal places.
    (3) Charges to the transferring State shall not include the costs of 
any benefits paid which are funded or reimbursed from the Federal 
Unemployment Benefits and Allowances account in the U.S. Department of 
Labor appropriation, including:
    (i) Benefits paid pursuant to 5 U.S.C. 8501-8525; and
    (ii) Benefits which are reimbursable under part B of title II of the 
Emergency Jobs and Unemployment Assistance Act of 1974 (Pub. L. 93-567).
    (4) With respect to benefits paid after December 31, 1978, except as 
provided in paragraphs (f)(3) and (f)(5) of this section, all 
transferring States will be charged by the paying State for Extended 
Benefits in the same manner as for regular benefits.
    (5) With respect to new claims establishing a benefit year effective 
on and after July 1, 1977, the United States shall be charged directly 
by the paying State, in the same manner as is provided in paragraphs 
(f)(1) and (f)(2) of this section, in regard to Federal civilian service 
and wages and Federal military service and wages assigned or transferred 
to the paying State and included in Combined-Wage Claims in accordance 
with this part and parts 609 and 614 of this chapter. With respect to 
new claims effective before July 1, 1977, prior law shall apply.

(26 U.S.C. 3304(a)(9)(B); Secretary's Order No. 4-75, (40 FR 18515))

[36 FR 24992, Dec. 28, 1971, as amended at 43 FR 2625, Jan. 17, 1978; 45 
FR 47109, July 11, 1980]



Sec. 616.9  Responsibilities of transferring States.

    (a) Transfer of employment and wages. Each transferring State shall 
promptly transfer to the Paying State the employment and wages the 
Combined-Wage Claimant had in covered employment during the base period 
of the paying State. Any employment and wages so transferred shall be 
transferred without restriction as to their use for determination and 
benefit payments under the provisions of the paying State's law.
    (b) Employment and wages not transferable. Employment and wages 
transferred to the paying State by a transferring State shall not 
include:
    (1) Any employment and wages which have been transferred to any 
other paying State and not returned unused, or which have been used in 
the transferring State as the basis of a monetary determination which 
established a benefit year.
    (2) Any employment and wages which have been canceled or are 
otherwise unavailable to the claimant as a result of a determination by 
the transferring State made prior to its receipt of the request for 
transfer, if such determination has become final or is in the process of 
appeal but is still pending. If the appeal is finally decided in favor 
of the Combined-Wage Claimant, any employment and wages involved in the 
appeal shall forthwith be transferred to the paying State and any 
necessary redetermination shall be made by such paying State.
    (c) Reimbursement of paying State. Each transferring State shall, as 
soon as practicable after receipt of a quarterly statement of charges 
described

[[Page 96]]

herein, reimburse the paying State accordingly.

(26 U.S.C. 3304(a)(9)(B); Secretary's Order No. 4-75, (40 FR 18515))

[36 FR 24992, Dec. 28, 1971, as amended at 45 FR 47109, July 11, 1980]



Sec. 616.10  Reuse of employment and wages.

    Employment and wages which have been used under this arrangement for 
a determination of benefits which establishes a benefit year shall not 
thereafter be used by any State as the basis for another monetary 
determination of benefits.



Sec. 616.11  Amendment of arrangement.

    Periodically the Secretary shall review the operation of this 
arrangement, and shall propose such amendments to the arrangement as he 
believes are necessary or appropriate. Any State unemployment 
compensation agency or the ICESA may propose amendments to the 
arrangement. Any proposal shall constitute an amendment to the 
arrangement upon approval by the Secretary in consultation with the 
State unemployment compensation agencies. Any such amendment shall 
specify when the change shall take effect, and to which claims it shall 
apply.



PART 617_TRADE ADJUSTMENT ASSISTANCE FOR WORKERS UNDER THE TRADE ACT 
OF 1974--Table of Contents




                            Subpart A_General

Sec.
617.1 Scope.
617.2 Purpose.
617.3 Definitions.
617.4 Benefit information to workers.

              Subpart B_Trade Readjustment Allowances (TRA)

617.10 Applications for TRA.
617.11 Qualifying requirements for TRA.
617.12 Evidence of qualification.
617.13 Weekly amounts of TRA.
617.14 Maximum amount of TRA.
617.15 Duration of TRA.
617.16 Applicable State law.
617.17 Availability and active search for work.
617.18 Disqualifications.
617.19 Requirement for participation in training.

                     Subpart C_Reemployment Services

617.20 Responsibilities for the delivery of reemployment services.
617.21 Reemployment services and allowances.
617.22 Approval of training.
617.23 Selection of training methods and programs.
617.24 Preferred training.
617.25 Limitations on training under subpart C of this part.
617.26 Liable and agent State responsibilities.
617.27 Subsistence payments.
617.28 Transportation payments.
617.29 Application of EB work test.

                     Subpart D_Job Search Allowances

617.30 General.
617.31 Applications.
617.32 Eligibility.
617.33 Findings required.
617.34 Amount.
617.35 Time and method of payment.

                     Subpart E_Relocation Allowances

617.40 General.
617.41 Applications.
617.42 Eligibility.
617.43 Time of relocation.
617.44 Findings required.
617.45 Amount.
617.46 Travel allowance.
617.47 Moving allowance.
617.48 Time and method of payment.

                      Subpart F_Job Search Program

617.49 Job Search Program.

          Subpart G_Administration by Applicable State Agencies

617.50 Determinations of entitlement; notices to individuals.
617.51 Appeals and hearings.
617.52 Uniform interpretation and application.
617.53 Subpoenas.
617.54 State agency rulemaking.
617.55 Overpayments; penalties for fraud.
617.56 Inviolate rights to TAA.
617.57 Recordkeeping; disclosure of information.
617.58 Unemployment insurance.
617.59 Agreements with State agencies.
617.60 Administration requirements. [Reserved]
617.61 Information, reports, and studies.
617.62 Transitional procedures.
617.63 Savings clause.

[[Page 97]]

617.64 Termination of TAA program benefits.
617.65 Transition procedures for amendments in sections 2671 and 2672 of 
          Pub. L. 98-369 (Deficit Reduction Act of 1984).
617.66 Transition procedures for amendments in sections 13002 through 
          13009 of Pub. L. 99-272 (the Consolidated Omnibus Budget 
          Reconciliation Act of 1985).
617.67 Transition guidelines for the 1988 amendments.

Appendix A to Part 617--Standard for Claim Filing, Claimant Reporting, 
          Job Finding, and Employment Services
Appendix B to Part 617--Standard for Claim Determinations--Separation 
          Information
Appendix C to Part 617--Standard for Fraud and Overpayment Detection

    Authority: 19 U.S.C. 2320; Secretary's Order No. 3-81, 46 FR 31117.

    Source: 51 FR 45848, Dec. 22, 1986, unless otherwise noted.



                            Subpart A_General



Sec. 617.1  Scope.

    The regulations in this part 617 pertain to:
    (a) Adjustment assistance, such as counseling, testing, training, 
placement, and other supportive services for workers adversely affected 
under the terms of chapter 2 of title II of the Trade Act of 1974, as 
amended (hereafter referred to as the Act);
    (b) Trade readjustment allowances (hereafter referred to as TRA) and 
other allowances such as allowances while in training, job search and 
relocation allowances; and
    (c) Administrative requirements applicable to State agencies to 
which such individuals may apply.



Sec. 617.2  Purpose.

    The Act created a program of trade adjustment assistance (hereafter 
referred to as TAA) to assist individuals, who became unemployed as a 
result of increased imports, return to suitable employment. The TAA 
program provides for reemployment services and allowances for eligible 
individuals. The regulations in this part 617 are issued to implement 
the Act.



Sec. 617.3  Definitions.

    For the purposes of the Act and this part 617:
    (a) Act means chapter 2 of title II of the Trade Act of 1974, Pub. 
L. 93-618, 88 Stat. 1978, 2019-2030 (19 U.S.C. 2271-2322), as amended.
    (b) Adversely affected employment means employment in a firm or 
appropriate subdivision of a firm, including workers in any agricultural 
firm or subdivision of an agricultural firm, if workers of such firm or 
appropriate subdivision are certified under the Act as eligible to apply 
for TAA.
    (c) Adversely affected worker means an individual who, because of 
lack of work in adversely affected employment:
    (1) Has been totally or partially separated from such employment; or
    (2) Has been totally separated from employment with the firm in a 
subdivision of which such adversely affected employment exists.
    (d) Appropriate week means the week in which the individual's first 
separation occurred.
    (e) Average weekly hours means a figure obtained by dividing:
    (1) Total hours worked (excluding overtime) by a partially separated 
individual in adversely affected employment in the 52 weeks (excluding 
weeks in such period during which the individual was sick or on 
vacation) preceding the individual's first qualifying separation, by
    (2) The number of weeks in such 52 weeks (excluding weeks in such 
period during which the individual was sick or on vacation) in which the 
individual actually worked in such employment.
    (f) Average weekly wage means one-thirteenth of the total wages paid 
to an individual in the individual's high quarter. The high quarter for 
an individual is the quarter in which the total wages paid to the 
individual were highest among the first four of the last five completed 
calendar quarters preceding the individual's appropriate week.
    (g) Average weekly wage in adversely affected employment means a 
figure obtained by dividing:
    (1) Total wages earned by a partially separated individual in 
adversely affected employment in the 52 weeks (excluding the weeks in 
that period the individual was sick or on vacation) preceding the 
individual's first qualifying separation, by

[[Page 98]]

    (2) The number of weeks in such 52 weeks (excluding the weeks in 
that period the individual was sick or on vacation) the individual 
actually worked in such employment.
    (h) Benefit period means, with respect to an individual:
    (1) The benefit year and any ensuing period, as determined under the 
applicable State law, during which the individual is eligible for 
regular compensation, additional compensation, extended compensation, or 
federal supplemental compensation, as these terms are defined by 
paragraph (oo) of this section; or
    (2) The equivalent to such a benefit year or ensuing period provided 
for under the Federal unemployment insurance law.
    (i) Bona fide application for training means an individual's signed 
and dated application for training filed with the State agency 
administering the TAA training program, on a form necessarily containing 
the individual's name, petition number, local office number, and 
specific occupational training. This form shall be signed and dated by a 
State agency representative upon receipt.
    (j)(1) Certification means a certification of eligibility to apply 
for TAA issued under section 223 of the Act with respect to a specified 
group of workers of a firm or appropriate subdivision of a firm.
    (2) Certification period means the period of time during which total 
and partial separations from adversely affected employment within a firm 
or appropriate subdivision of a firm are covered by the certification.
    (k) Commuting area means the area in which an individual would be 
expected to travel to and from work on a daily basis as determined under 
the applicable State law.
    (l) Date of separation means:
    (1) With respect to a total separation--
    (i) For an individual in employment status, the last day worked; and
    (ii) For an individual on employer-authorized leave, the last day 
the individual would have worked had the individual been working; and
    (2) With respect to a partial separation, the last day of the week 
in which the partial separation occurred.
    (m) Eligibility period means the period of consecutive calendar 
weeks during which basic or additional TRA is payable to an otherwise 
eligible individual, and for an individual such eligibility period is--
    (1) Basic TRA. (i) With respect to a first qualifying separation (as 
defined in paragraph (t)(3)(i)(A) of this section) that occurs on a day 
that precedes August 23, 1988, the 104-week period beginning with the 
first week following the week with respect to which the individual first 
exhausts all rights to regular compensation (as defined in paragraph 
(oo)(1) of this section) in such individual's first benefit period (as 
described in Sec. 617.11(a)(1)(iv)) or Sec. 617.11(a)(2)(iv), 
whichever is applicable), and
    (ii) With respect to a total qualifying separation (as defined in 
paragraph (t)(3)(i)(B) of this section) that occurs on or after August 
23, 1988--or before August 23, 1988, if the individual also had a prior 
first qualifying separation under the same certification--the 104-week 
period beginning with the first week following the week in which such 
total qualifying separation occurred;
    Provided, that, an individual who has a second or subsequent total 
qualifying separation within the certification period of the same 
certification shall be determined to have a new 104-week eligibility 
period based upon the most recent such total qualifying separation; but 
the rule of this proviso shall not be applicable in the case of an 
individual who had a total qualifying separation before August 23, 1988, 
and also had a prior first qualifying separation (as referred to in 
paragraph (m)(1)(i) of this section) within the certification period of 
the same certification, if the individual's 104-week eligibility period 
based upon the total qualifying separation (as referred to in paragraph 
(m)(1)(i) of this section) would end on a date earlier than the ending 
date of the individual's eligibility period which is based upon the 
prior first qualifying separation; and
    (2) Additional TRA. With respect to additional weeks of TRA, and any 
individual determined under this part 617

[[Page 99]]

to be entitled to additional TRA, the consecutive calendar weeks that 
occur in the 26-week period that--
    (i) Immediately follows the last week of entitlement to basic TRA 
otherwise payable to the individual, or
    (ii) Begins with the first week of training approved under this part 
617, if such training begins after the last week described in paragraph 
(m)(2)(i) of this section, or
    (iii) Begins with the first week in which such training is approved 
under this part 617, if such training is so approved after the training 
has commenced; but approval of training under this part 617 after the 
training has commenced shall not imply or justify approval of a payment 
of basic or additional TRA with respect to any week which ended before 
the week in which such training was approved, nor approval of payment of 
any costs of training or any costs or expenses associated with such 
training (such as travel or subsistence) which were incurred prior to 
the date of the approval of such training under this part 617.
    (n) Employer means any individual or type of organization, including 
the Federal government, a State government, a political subdivision, or 
an instrumentality of one or more governmental entities, with one or 
more individuals performing service in employment for it within the 
United States.
    (o) Employment means any service performed for an employer by an 
officer of a corporation or an individual for wages.
    (p) Exhaustion of UI means exhaustion of all rights to UI in a 
benefit period by reason of:
    (1) Having received all UI to which an individual was entitled under 
the applicable State law or Federal unemployment compensation law with 
respect to such benefit period; or
    (2) The expiration of such benefit period.
    (q) Family means the following members of an individual's household 
whose principal place of abode is with the individual in a home the 
individual maintains or would maintain but for unemployment:
    (1) A spouse;
    (2) An unmarried child, including a stepchild, adopted child, or 
foster child, under age 21 or of any age if incapable of self-support 
because of mental or physical incapacity; and
    (3) Any other person whom the individual would be entitled to claim 
as a dependent for income tax purposes under the Internal Revenue Code 
of 1954.
    (r) First benefit period means the benefit period established after 
the individual's first qualifying separation or in which such separation 
occurs.
    (s) First exhaustion of UI means the first time in an individual's 
first benefit period that the individual exhausts all rights to UI; 
first exhaustion shall be deemed to be complete at the end of the week 
the exhaustion occurs.
    (t)(1) First separation means, for an individual to qualify as an 
adversely affected worker for the purposes of TAA program benefits 
(without regard to whether the individual also qualifies for TRA), the 
individual's first total or partial separation within the certification 
period of a certification, irrespective of whether such first separation 
also is a qualifying separation as defined in paragraph (t)(2) of this 
section;
    (2) Qualifying separation means, for an individual to qualify as an 
adversely affected worker and for basic TRA--
    (i) Prior to August 23, 1988, the individual's first (total or 
partial) separation within the certification per-iod of a certification, 
with respect to which the individual meets all of the requirements of 
Sec. 617.11(a)(1) (i) through (iv), and which qualifies as a first 
qualifying separation as defined in paragraph (t)(3)(i)(A) of this 
section, and
    (ii) At any time before, on, or after August 23, 1988, any total 
separation of the individual within the certification period of a 
certification (other than a first qualifying separation as defined in 
paragraph (t)(3)(i)(A) of this section), with respect to which the 
individual meets all of the requirements in Sec. 617.11(a)(2) (i) 
through (iv), and which qualifies as a total qualifying separation as 
defined in paragraph (B) of (t)(3)(i)(B) of this section;
    (3) ``First qualifying separation'' means--
    (i) For the purposes of determining an individual's eligibility 
period for basic TRA--

[[Page 100]]

    (A) With respect to a separation that occurs before August 23, 1988, 
the individual's first (total or partial) separation within the 
certification period of a certification, with respect to which the 
individual meets all of the requirements of Sec. 617.11(a)(1) (i) 
through (iv), and
    (B) With respect to a separation that occurs before, on, or after 
August 23, 1988 (other than a first qualifying separation as defined in 
paragraph (t)(3)(i)(A) of this section), the first total separation of 
the individual within the certification period of a certification, with 
respect to which the individual meets all of the requirements in Sec. 
617.11(a)(2) (i) through (iv); and
    (ii) For the purposes of determining the weekly and maximum amounts 
of basic TRA payable to an individual, with respect to a separation that 
occurs before, on, or after August 23, 1988, the individual's first 
(total or partial) separation within the certification period of a 
certification if, with respect to such separation, the individual meets 
the requirements of Sec. 617.11(a)(1) (i), (ii) and (iv) or Sec. 
617.11(a)(2) (i), (ii) and (iv).
    (u) Head of family means an individual who maintains a home for a 
family. An individual maintains a home if over half the cost of 
maintenance is furnished by the individual or would be furnished but for 
unemployment.
    (v) Impact date means the date stated in a certification issued 
under the Act on which total or partial separations began or threatened 
to begin in a firm or a subdivision of a firm.
    (w) Job search program means a job search workshop or job finding 
club.
    (x) Job search workshop means a short (1 to 3 days) seminar designed 
to provide participants with knowledge that will enable the participants 
to find jobs. Subjects should include, but not be limited to, labor 
market information, resume writing, interviewing techniques, and 
techniques for finding job openings.
    (y) Job finding club means a job search workshop which includes a 
period of 1 to 2 weeks of structured, supervised activity in which 
participants attempt to obtain jobs.
    (z) Layoff means a suspension of or separation from employment by a 
firm for lack of work, initiated by the employer, and expected to be for 
a definite or indefinite period of not less than seven consecutive days.
    (aa) Liable State and Agent State are defined as follows:
    (1) Liable State means, with respect to any individual, the State 
whose State law is the applicable State law as determined under Sec. 
617.16 for all purposes of this Part 617.
    (2) Agent State means, with respect to any individual, any State 
other than the State which is the liable State for such individual.
    (bb) On-the-job training means training provided by an employer to 
an individual who is employed by the employer.
    (cc) Partial separation means that during a week ending on or after 
the impact date specified in the certification under which an adversely 
affected worker is covered, the individual had:
    (1) Hours of work reduced to 80 percent or less of the individual's 
average weekly hours in adversely affected employment; and
    (2) Wages reduced to 80 percent or less of the individual's average 
weekly wage in such adversely affected employment.
    (dd) Regional Administrator means the appropriate Regional 
Administrator of the Employment and Training Administration, United 
States Department of Labor (hereafter Department).
    (ee) Remuneration means remuneration as defined in the applicable 
State law.
    (ff) Secretary means the Secretary of Labor, U.S. Department of 
Labor, or his or her designee.
    (gg) Separate maintenance means maintaining another (second) 
residence, in addition to the individual's regular place of residence, 
while attending a training facility outside the individual's commuting 
area.
    (hh) State means the States of the United States, the District of 
Columbia, and the Commonwealth of Puerto Rico, and the term ``United 
States'' when used in a geographical sense includes such Commonwealth.

[[Page 101]]

    (ii) State agency means the State Employment Security Agency; the 
employment service of the State; any State agency carrying out title III 
of the Job Training Partnership Act; or any other State or local agency 
administering job training or related programs with which the Secretary 
has an agreement to carry out any of the provisions of the Act.
    (jj) State law means the unemployment compensation law of a State 
approved by the Secretary under section 3304 of the Internal Revenue 
Code of 1954 (26 U.S.C. 3304).
    (kk) Suitable work means, with respect to an individual:
    (1) Suitable work as defined in the applicable State law for 
claimants for regular compensation (as defined in paragraph (oo)(1) of 
this section); or
    (2) Suitable work as defined in applicable State law provisions 
consistent with section 202(a)(3) of the Federal-State Extended 
Unemployment Compensation Act of 1970;

whichever is applicable, but does not in any case include self-
employment or employment as an independent contractor.
    (ll) Total separation means a layoff or severance of an individual 
from employment with a firm in which, or in a subdivision of which, 
adversely affected employment exists.
    (mm) Trade adjustment assistance (TAA) means the services and 
allowances provided for achieving reemployment of adversely affected 
workers, including TRA, training and other reemployment services, and 
job search allowances and relocation allowances.
    (nn) Trade readjustment allowance (TRA) means a weekly allowance 
payable to an adversely affected worker with respect to such worker's 
unemployment under subpart B of this part 617.
    (oo) Unemployment insurance (UI) means the unemployment compensation 
payable to an individual under any State law or Federal unemployment 
compensation law, including chapter 85, title 5 of the United States 
Code, and the Railroad Unemployment Insurance Act. ``UI'' includes 
``regular compensation,'' ``additional compensation,'' ``extended 
compensation,'' and ``federal supplemental compensation,'' defined as 
follows:
    (1) Regular compensation means unemployment compensation payable to 
an individual under any State law, and, when so payable, includes 
unemployment compensation payable pursuant to chapter 85, title 5 of the 
United States Code, but does not include extended compensation, 
additional compensation, or federal supplemental compensation;
    (2) Additional compensation means unemployment compensation totally 
financed by a State and payable under a State law by reason of 
conditions of high unemployment or by reason of other special factors 
and, when so payable, includes unemployment compensation payable 
pursuant to chapter 85, title 5 of the United States Code; and
    (3) Extended compensation means the extended unemployment 
compensation payable to an individual for weeks of unemployment which 
begin in an Extended Benefit Period, under those provisions of a State 
law which satisfy the requirements of the Federal-State Extended 
Unemployment Compensation Act of 1970 and regulations governing the 
payment of extended unemployment compensation, and, when so payable, 
includes unemployment compensation payable pursuant to chapter 85, title 
5 of the United States Code, but does not include regular compensation, 
additional compensation, or federal supplemental compensation. Extended 
compensation is also referred to in this part 617 as Extended Benefits 
or EB.
    (4) Federal supplemental compensation means the supplemental 
unemployment compensation payable to individuals who have exhausted 
their rights to regular and extended compensation, and which is payable 
under the Federal Supplemental Compensation Act of 1982 or any similar 
Federal law enacted before or after the 1982 Act.
    (pp) Wages means all compensation for employment for an employer, 
including commissions, bonuses, and the cash value of all compensation 
in a medium other than cash.
    (qq) Week means a week as defined in the applicable State law.

[[Page 102]]

    (rr) Week of unemployment means a week of total, part total, or 
partial unemployment as determined under the applicable State law or 
Federal unemployment compensation law.

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32348, Aug. 24, 1988; 
59 FR 926, 927, Jan. 6, 1994; 61 FR 19983, May 3, 1996]



Sec. 617.4  Benefit information to workers.

    (a) Providing information to workers. State agencies shall provide 
full information to workers about the benefit allowances, training, and 
other employment services available under subparts B through E of this 
part 617 and about the petition and application procedures, and the 
appropriate filing dates, for such allowances, training and services.
    (b) Providing assistance to workers. State agencies shall provide 
whatever assistance is necessary to enable groups of workers, including 
unorganized workers, to prepare petitions or applications for program 
benefits.
    (c) Providing information to State vocational education agencies and 
others. State agencies shall inform the State Board for Vocational 
Education or equivalent agency and other public or private agencies, 
institutions, and employers, as appropriate, of each certification 
issued under section 223 of the Act and of projections, if available, of 
the needs for training under section 236 of the Act as a result of such 
certification.
    (d) Written and newspaper notices. (1) Written notices to workers. 
(i) Upon receipt of a certification issued by the Department of Labor, 
the State agency shall provide a written notice through the mail of the 
benefits available under subparts B through E of this part 617 to each 
worker covered by a certification issued under section 223 of the Act 
when the worker is partially or totally separated or as soon as possible 
after the certification is issued if such workers are already partially 
or totally separated from adversely affected employment.
    (ii) The State agency will satisfy this requirement by obtaining 
from the firm, or other reliable source, the names and addresses of all 
workers who were partially or totally separated from adversely affected 
employment before the certification was received by the agency, and 
workers who are thereafter partially or totally separated within the 
certification period. The State agency shall mail a written notice to 
each such worker of the benefits available under the TAA Program. The 
notice must include the following information:
    (A) Worker group(s) covered by the certification, and the article(s) 
produced as specified in the copy of the certification furnished to the 
State agency.
    (B) Name and the address or location of workers' firm.
    (C) Impact, certification, and expiration dates in the certification 
document.
    (D) Benefits and reemployment services available to eligible 
workers.
    (E) Explanation of how workers apply for TAA benefits and services.
    (F) Whom to call to get additional information on the certification.
    (G) When and where the workers should come to apply for benefits and 
services.
    (2) Newspaper notices. (i) Upon receipt of a copy of a certification 
issued by the Department affecting workers in a State, the State agency 
shall publish a notice of such certification in a newspaper of general 
circulation in areas in which such workers reside. Such a newspaper 
notice shall not be required to be published, however, in the case of a 
certification with respect to which the State agency can substantiate, 
and enters in its records evidence substantiating, that all workers 
covered by the certification have received written notice required by 
paragraph (d)(1) of this section.
    (ii) A published notice must include the following kinds of 
information:
    (A) Worker group(s) covered by the certification, and the article(s) 
produced as specified in the copy of the certification furnished to the 
State agency.
    (B) Name and the address or location of workers' firm.
    (C) Impact, certification, and expiration dates in the certification 
document.
    (D) Benefits and reemployment services available to eligible 
workers.

[[Page 103]]

    (E) Explanation of how and where workers should apply for TAA 
benefits and services.
    (e) Advice and assistance to workers. In addition to the information 
and assistance to workers as required under paragraphs (a) and (b) of 
this section, State agencies shall--
    (1) Advise each worker who applies for unemployment insurance under 
the State law of the benefits available under subparts B through E of 
this part and the procedures and deadlines for applying for such 
benefits.
    (2) Facilitate the early filing of petitions under section 221 of 
the Act and Sec. 617.4(b) for any workers that the agency considers are 
likely to be eligible for benefits. State agencies shall utilize 
information received by the State's dislocated worker unit to facilitate 
the early filing of petitions under section 221 of the Act by workers 
potentially adversely affected by imports.
    (3) Advise each adversely affected worker to apply for training 
under Sec. 617.22(a) before, or at the same time as, the worker applies 
for trade readjustment allowances under subpart B of this part.
    (4) Interview each adversely affected worker, as soon as 
practicable, regarding suitable training opportunities available to the 
worker under Sec. 617.22(a) and review such opportunities with the 
worker.

[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 927, Jan. 6, 1994]



              Subpart B_Trade Readjustment Allowances (TRA)



Sec. 617.10  Applications for TRA.

    (a) Before and after certification. An individual covered under a 
certification or a petition for certification may apply to a State 
agency for TRA. A determination shall be made at any time to the extent 
necessary to establish or protect an individual's entitlement to TRA or 
other TAA, but no payment of TRA or other TAA may be made by a State 
agency until a certification is made and the State agency determines 
that the individual is covered thereunder.
    (b) Timing of applications. An initial application for TRA, and 
applications for TRA for weeks of unemployment beginning before the 
initial application for TRA is filed, may be filed within a reasonable 
period of time after publication of the determination certifying the 
appropriate group of workers under section 223 of the Act. However, an 
application for TRA for a week of unemployment beginning after the 
initial application is filed shall be filed within the time limit 
applicable to claims for regular compensation under the applicable State 
law. For purposes of this paragraph (b), a reasonable period of time 
means such period of time as the individual had good cause for not 
filing earlier, which shall include, but not be limited to, the 
individual's lack of knowledge of the certification or misinformation 
supplied the individual by the State agency.
    (c) Applicable procedures. Applications shall be filed in accordance 
with this subpart B and on forms which shall be furnished to individuals 
by the State agency. The procedures for reporting and filing 
applications for TRA shall be consistent with this part 617 and the 
Secretary's ``Standard for Claim Filing, Claimant Reporting, Job Finding 
and Employment Services'', Employment Security Manual, part V, sections 
5000 et seq. (Appendix A of this part).
    (d) Advising workers to apply for training. State agencies shall 
advise each worker of the qualifying requirements for entitlement to TRA 
and other TAA benefits at the time the worker files an initial claim for 
State UI, and shall advise each adversely affected worker to apply for 
training under subpart C of this part before, or at the same time, the 
worker applies for TRA, as required by Sec. 617.4(e)(1) and (3).

[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 928, 943, Jan. 6, 1994



Sec. 617.11  Qualifying requirements for TRA.

    (a) Basic qualifying requirements for entitlement--(1) Prior to 
November 21, 1988. To qualify for TRA for any week of unemployment that 
begins prior to November 21, 1988, an individual must meet each of the 
following requirements of paragraphs (a)(1) (i) through (vii) of this 
section:

[[Page 104]]

    (i) Certification. The individual must be an adversely affected 
worker covered under a certification.
    (ii) Separation. The individual's first qualifying separation (as 
defined in paragraph (t)(3)(i) of Sec. 617.3) before application for 
TRA must occur:
    (A) On or after the impact date of such certification; and
    (B) Before the expiration of the two-year period beginning on the 
date of such certification, or, if earlier, before the termination date, 
if any, of such certification.
    (iii) Wages and employment. (A) In the 52-week period (i.e., 52 
consecutive calendar weeks) ending with the week of the individual's 
first qualifying separation, the individual must have had at least 26 
weeks of employment at wages of $30 or more a week in adversely affected 
employment with a single firm or subdivision of a firm. Evidence that an 
individual meets this requirement shall be obtained as provided in Sec. 
617.12. Employment and wages covered under more than one certification 
may not be combined to qualify for TRA.
    (B)(1) For the purposes of paragraph (a)(1)(iii) of this section, 
any week in which such individual--
    (i) is on employer-authorized leave from such adversely affected 
employment for purposes of vacation, sickness, injury, maternity, or 
inactive duty or active duty military service for training, or
    (ii) does not work in such adversely affected employment because of 
a disability compensable under a workers' compensation law or plan of a 
State or the United States, or
    (iii) had adversely affected employment interrupted to serve as a 
full-time representative of a labor organization in such firm or 
subdivision,

shall be treated as a week of employment at wages of $30 or more;
    (2) Provided, that--
    (i) not more than 7 weeks in the case of weeks described in 
paragraph (a)(1)(iii)(B)(1)(i) or paragraph (a)(1)(iii)(B)(1)(iii) of 
this section, or both, and (ii) not more than 26 weeks described in 
paragraph (a)(1)(iii)(B)(1)(ii) of this section,

may be treated as weeks of employment for purposes of paragraph 
(a)(1)(iii) of this section.
    (C) Wages and employment creditable under paragraph (a)(1)(iii) of 
this section shall not include employment or wages earned or paid for 
employment which is contrary to or prohibited by any Federal law.
    (iv) Entitlement to UI. The individual must have been entitled to 
(or would have been entitled to if the individual had applied therefor) 
UI for a week within the benefit period--
    (A) in which the individual's first qualifying separation occurred, 
or
    (B) which began (or would have begun) by reason of the filing of a 
claim for UI by the individual after such first qualifying separation.
    (v) Exhaustion of UI. The individual must:
    (A) Have exhausted all rights to any UI to which the individual was 
entitled (or would have been entitled to if the individual had applied 
therefor); and
    (B) Not have an unexpired waiting period applicable to the 
individual for any such UI.
    (vi) Extended Benefit work test. (A) The individual must--
    (1) Accept any offer of suitable work, as defined in Sec. 
617.3(kk), and actually apply for any suitable work the individual is 
referred to by the State agency, and
    (2) Actively engage in seeking work and furnish the State agency 
tangible evidence of such efforts each week, and
    (3) Register for work and be referred by the State agency to 
suitable work,

in accordance with those provisions of the applicable State law which 
apply to claimants for Extended Benefits and which are consistent with 
Part 615 of this Chapter.
    (B) The Extended Benefit work test shall not apply to an individual 
with respect to claims for TRA for weeks of unemployment beginning prior 
to the filing of an initial claim for TRA, nor for any week which begins 
before the individual is notified that the individual is covered by a 
certification issued under the Act and is fully informed of the Extended 
Benefit work test requirements of paragraph (a)(1)(vi) of this section 
and Sec. 617.17. Prior to such notification and advice, the individual 
shall not be subject to the Extended Benefit work test requirements, nor 
to any State timely

[[Page 105]]

filing requirement, but shall be required to be unemployed and able to 
work and available for work with respect to any such week except as 
provided for workers in approved training in Sec. 617.17(b)(1).
    (vii) Job search program participation. (A) The individual is 
enrolled in, participating in, or has successfully completed a job 
search program which meets the requirements of Sec. 617.49(a); or the 
State agency has determined that no acceptable job search program is 
reasonably available under the criteria set forth in Sec. 617.49(c).
    (B) The job search program requirement shall not apply to an 
individual with respect to claims for TRA for weeks of unemployment 
beginning prior to the filing of an initial claim for TRA, nor for any 
week which begins before the individual is notified that the individual 
is covered by a certification issued under the Act and is fully informed 
of the job search program requirement of paragraph (a)(1)(vii) of this 
section and Sec. 617.49.
    (C) The job search program requirement shall not apply to an 
individual, as a qualifying requirement for TRA, with respect to any 
week ending after November 20, 1988, but cooperating State agencies are 
encouraged to continue to utilize job search programs after November 20, 
1988, as an effective tool to assist adversely affected workers in 
finding suitable employment, particularly unemployed workers who have 
completed training or for whom the training requirement has been waived 
under Sec. 617.19.
    (2) On and after November 21, 1988. To qualify for TRA for any week 
of unemployment that begins on or after November 21, 1988, an individual 
must meet each of the following requirements of paragraphs (a)(2) (i) 
through (vii) of this section:
    (i) Certification. The individual must be an adversely affected 
worker covered under a certification.
    (ii) Separation. The individual's first qualifying separation (as 
defined in paragraph (t)(3)(i) of Sec. 617.3) before application for 
TRA must occur:
    (A) On or after the impact date of such certification; and
    (B) Before the expiration of the two-year period beginning on the 
date of such certification, or, if earlier, before the termination date, 
if any, of such certification.
    (iii) Wages and employment. (A) In the 52-week period (i.e., 52 
consecutive calendar weeks) ending with the week of the individual's 
first qualifying separation, or any subsequent total qualifying 
separation under the same certification, the individual must have had at 
least 26 weeks of employment at wages of $30 or more a week in adversely 
affected employment with a single firm or subdivision of a firm. 
Evidence that an individual meets this requirement shall be obtained as 
provided in Sec. 617.12. Employment and wages covered under more than 
one certification may not be combined to qualify for TRA.
    (B)(1) For the purposes of paragraph (a)(2)(iii) of this section, 
any week in which such individual--
    (i) Is on employer-authorized leave from such adversely affected 
employment for purposes of vacation, sickness, injury, maternity, or 
inactive duty or active duty military service for training, or
    (ii) Does not work in such adversely affected employment because of 
a disability compensable under a workers' compensation law or plan of a 
State or the United States, or
    (iii) Had adversely affected employment interrupted to serve as a 
full-time representative of a labor organization in such firm or 
subdivision, or
    (iv) Is on call-up for the purpose of active duty in a reserve 
status in the Armed Forces of the United States (if such week began 
after August 1, 1990), provided such active duty is ``Federal service'' 
as defined in part 614 of this chapter,

shall be treated as a week of employment at wages of $30 or more;
    (2) Provided, that--
    (i) Not more than 7 weeks in the case of weeks described in 
paragraph (a)(2)(iii)(B)(1) (i) or (iii) of this section, or both, and
    (ii) Not more than 26 weeks described in paragraph (a)(2)(iii)(B)(1) 
(ii) or (iv) of this section,

may be treated as weeks of employment for purposes of paragraph 
(a)(2)(iii) of this section.

[[Page 106]]

    (C) Wages and employment creditable under paragraph (a)(2)(iii) of 
this section shall not include employment or wages earned or paid for 
employment which is contrary to or prohibited by any Federal law.
    (iv) Entitlement to UI. The individual must have been entitled to 
(or would have been entitled to if the individual had applied therefor) 
UI for a week within the benefit period--
    (A) in which the individual's first qualifying separation occurred, 
or
    (B) which began (or would have begun) by reason of the filing of a 
claim for UI by the individual after such first qualifying separation.
    (v) Exhaustion of UI. The individual must:
    (A) Have exhausted all rights to any UI to which the individual was 
entitled (or would have been entitled if the individual had applied 
therefor); and
    (B) Not have an unexpired waiting period applicable to the 
individual for any such UI.
    (vi) Extended Benefit work test. (A) The individual must--
    (1) Accept any offer of suitable work, as defined in Sec. 
617.3(kk), and actually apply for any suitable work the individual is 
referred to by the State agency, and
    (2) Actively engage in seeking work and furnish the State agency 
tangible evidence of such efforts each week, and
    (3) Register for work and be referred by the State agency to 
suitable work,

in accordance with those provisions of the applicable State law which 
apply to claimants for Extended Benefits and which are consistent with 
part 615 of this chapter.
    (B) The Extended Benefit work test shall not apply to an individual 
with respect to claims for TRA for weeks of unemployment beginning prior 
to the filing of an initial claim for TRA, nor for any week which begins 
before the individual is notified that the individual is covered by a 
certification issued under the Act and is fully informed of the Extended 
Benefit work test requirements of paragraph (a)(2)(vi) of this section 
and Sec. 617.17. Prior to such notification and advice, the individual 
shall not be subject to the Extended Benefit work test requirements, nor 
to any State timely filing requirement, but shall be required to be 
unemployed and able to work and available for work with respect to any 
such week except as provided in Sec. 617.17(b)(2) for workers enrolled 
in, or participating in, a training program approved under Sec. 
617.22(a).
    (vii) Participation in training. (A) The individual must--
    (1) Be enrolled in or participating in a training program approved 
pursuant to Sec. 617.22(a), or
    (2) Have completed a training program approved under Sec. 
617.22(a), after a total or partial separation from adversely affected 
employment within the certification period of a certification issued 
under the Act, or
    (3) Have received from the State agency a written statement under 
Sec. 617.19 waiving the participation in training requirement for the 
individual.
    (B) The participation in training requirement of paragraph 
(a)(2)(vii) of this section shall not apply to an individual with 
respect to claims for TRA for weeks of unemployment beginning prior to 
the filing of an initial claim for TRA, nor for any week which begins 
before the individual is notified that the individual is covered by a 
certification issued under the Act and is fully informed of the 
participation in training requirement of paragraph (a)(2)(vii) of this 
section and Sec. 617.19.
    (C) The participation in training requirement of paragraph 
(a)(2)(vii) of this section shall apply, as a qualifying requirement for 
TRA, to an individual with respect to claims for TRA for weeks of 
unemployment commencing on or after November 21, 1988, and beginning 
with the first week following the week in which a certification covering 
the individual is issued under the Act, unless the State agency has 
issued a written statement to the individual under Sec. 617.19 waiving 
the participation in training requirement for the individual.
    (D) For purposes of paragraph (a)(2)(vii) of this section, the 
following definitions shall apply:
    (1) Enrolled in Training. A worker shall be considered to be 
enrolled in training when the worker's application for training is 
approved by the State agency and the training institution has

[[Page 107]]

furnished written notice to the State agency that the worker has been 
accepted in the approved training program which is to begin within 30 
calendar days of the date of such approval. (A waiver under Sec. 617.19 
shall not be required for an individual who is enrolled in training as 
defined herein.)
    (2) Completed Training. A worker shall be considered to have 
completed a training program if the training program was approved, or 
was approvable and is approved, pursuant to Sec. 617.22, and the 
training was completed subsequent to the individual's total or partial 
separation from adversely affected employment within the certification 
period of a certification issued under the Act, and the training 
provider has certified that all the conditions for completion of the 
training program have been satisfied.
    (3) Special rules for workers separated in 1981 to 1986 period. (i) 
Basic conditions. Under section 1425(b) of the Omnibus Trade and 
Competitiveness Act of 1988 (the ``OTCA'') (Pub. L. 100-418) the time 
limit on the eligibility period for basic TRA in section 233(a)(2) of 
the Act (before and after the amendment by Public Law 100-418), and the 
210-day time limit in section 233(b) of the Act on the filing of a bona 
fide application for training in order to qualify for additional TRA, 
are set aside and shall be disregarded for any individual separated from 
adversely affected employment in the period which began on August 13, 
1981, and ended on April 7, 1986: Provided, That, any such individual 
must meet all of the following requirements of paragraphs (a)(3)(i)(A) 
through (E) of this section to qualify for TRA for any week.
    (A) Period of separation. The separation of the individual must have 
occurred on a date within the period which began on August 13, 1981 and 
ended on April 7, 1986.
    (B) Total separation required. Such separation must be a ``total 
separation'' as defined in Sec. 617.3(ll), and a ``total qualifying 
separation'' as defined in Sec. 617.3(t)(3)(i)(B); and, for the 
purposes of determining whether an individual has been continuously 
unemployed, as defined in Sec. 617.3(t)(3)(i)(E), only the last such 
total separation within the August 13, 1981 to April 7, 1986 period 
shall be taken into account.
    (C) Other standard requirements. The individual must, with respect 
to such total separation, meet all of the requirements of paragraphs 
(a)(2)(i) through (v) of this section.
    (D) Participation in training. (1) The individual must meet the 
requirements of paragraph (a)(2)(vii) of this section, with respect to 
being enrolled in or participating in a training program approved 
pursuant to Sec. 617.22(a), as to each week TRA is claimed, and not be 
ineligible under Sec. 617.18(b)(2) for failure to begin participation 
in such training or for ceasing to participate in such training.
    (2) With respect to participation in training, as required under 
paragraph (a)(3) of this section, the break in training provisions of 
Sec. 617.15(d) shall be applicable, and the waiver of participation 
provisions in Sec. 617.19 shall not be applicable.
    (E) Continuously unemployed. (1) The individual must have been 
continuously unemployed since the date of the individual's total 
separation referred to in paragraph (a)(2)(vii)(B) of this section, not 
taking into account for the purposes of this determination any work in 
which the individual was employed in seasonal employment, odd jobs, or 
part-time, temporary employment.
    (2) For purposes of Sec. 617.11(a)(3)(i)(E)(1), continuously 
unemployed shall mean the individual has not been engaged in any 
employment, except for seasonal employment, odd-jobs, or part-time, 
temporary employment. Employment shall be considered:
    (i) Seasonal employment when seasonality provisions of the 
applicable State law are applicable to such employment; or
    (ii) An odd job when the established period of employment occurs 
within five (5) consecutive days or less; or
    (iii) Part-time, temporary employment when a termination date of one 
hundred fifty (150) days or less was established at the time of 
employment, and the average weekly hours for the job, over the period of 
employment, was less than 30 hours per week.

[[Page 108]]

    (ii) TRA payments prospective only. The provisions of paragraph 
(a)(3) of this section apply to payments of TRA only for weeks which 
begin after August 23, 1988, and with respect to training in which the 
individual becomes enrolled and begins participation before or after 
such date, and which is approved under Sec. 617.22(a) before or after 
such date. No payment of TRA may be authorized under paragraph (a)(3) of 
this section for any week which ends before such training is approved 
under Sec. 617.22(a).
    (iii) Other special rules. (1) Although the last total qualifying 
separation of an individual will be used for the purposes of the 
determination under paragraph (a)(3)(i)(B) of this section, the 
individual's first qualifying separation (as defined in paragraph 
(t)(3)(ii) of Sec. 617.3) must be used to determine the weekly and 
maximum amounts payable to the individual in accordance with Sec. Sec. 
617.13 and 617.14.
    (2) No individual shall be determined to be eligible for TRA under 
paragraph (a)(3) of this section if the individual has previously 
received all of the basic and additional TRA to which the individual was 
entitled.
    (3) The 26-week eligibility period for additional TRA is applicable 
under paragraph (a)(3) of this section, as such term is defined in 
paragraph (m)(2) of Sec. 617.3.
    (4) Special rules for oil and gas workers--retroactive--(i) Basic 
conditions. Under section 1421(a)(1)(B) of the OTCA, individuals 
employed by independent firms engaged in exploration or drilling for oil 
and natural gas who were separated after September 30, 1985, may be 
entitled, retroactively, to TAA program benefits, but only if, as to any 
such individual, all of the conditions in the following provisions of 
paragraph (a)(4) of this section are met.
    (ii) Prior certification. Individuals covered by this paragraph 
(a)(4) do not include any individual covered under a certification (made 
with respect to the same firm or subdivision of a firm) that was issued 
under section 223 of the Act without regard to the amendments to section 
222 of the Act (relating to oil and gas workers) made by section 1421 
(a)(1)(A) of the OTCA.
    (iii) Petition. (A) To apply for a certification under section 223 
covering workers referred to in section 1421 (a)(1)(B) of the OTCA, a 
petition must have been filed in the Office of Trade Adjustment 
Assistance after August 23, 1988, and on or before November 18, 1988, by 
or on behalf of a group of workers of such a firm or subdivision of a 
firm.
    (B) A petition, to be valid, may not be signed by or on behalf of an 
individual referred to in paragraph (a)(4)(ii) of this section.
    (iv) Certification. (A) As provided in section 1421(a) (1)(B) of the 
OTCA, a certification issued pursuant to section 223 of the Act will not 
be subject to the one-year limitation on the impact date which is 
specified in section 223(b) of the Act, but the impact date of any such 
certification may not be a date earlier than October 1, 1985.
    (B) A certification shall not be issued under the authority of 
section 1421(a)(1)(B) of the OTCA if a certification could have been 
issued under section 223 of the Act before or after the amendment made 
by section 1421(a)(1)(A) of the OTCA.
    (v) Coverage of certification. Individuals covered by a 
certification issued under the authority of section 1421(a)(1)(B) of the 
OTCA will be eligible to apply for TAA program benefits as follows:
    (A) Basic and additional TRA, retroactively and prospectively, 
subject to the conditions stated in paragraph (a)(4) of this section;
    (B) Training, prospectively, subject to the conditions stated in 
subpart C of this part;
    (C) Job search allowances, prospectively, subject to the conditions 
stated in subpart D of this part; and
    (D) Relocation allowances, prospectively, subject to the conditions 
stated in subpart E of this part.
    (vi) TRA entitlement. To qualify for TRA for any week, an individual 
must meet all of the following requirements of paragraphs (a)(4)(vi)(A) 
through (D) of this section;
    (A) Certification. The individual must be an adversely affected 
worker covered under a certification issued pursuant to section 223 of 
the Act and under

[[Page 109]]

the authority of section 1421(a)(1)(B) of the OTCA.
    (B) Date of separation. The date of the individual's most recent 
total separation (as defined in Sec. 617.3) must be a date after 
September 30, 1985, and within the certification period of the 
certification under which the worker is covered. Separations occurring 
prior to October 1, 1985, shall be disregarded for the purposes of 
determining whether an individual experienced a total separation after 
September 30, 1985.
    (C) Other standard requirements. (1) With respect to weeks of 
unemployment that begin after September 30, 1985, but prior to November 
21, 1988, the individual must, with respect to the separation referred 
to in paragraph (a)(4)(vi)(B) of this section, meet all of the 
requirements of paragraph (a)(1)(i) through (vii) of this section, and
    (2) With respect to weeks of unemployment that begin on or after 
November 21, 1988, the individual must meet all of the requirements of 
paragraphs (a)(2)(i) through (vii) of this section.
    (D) Other special rules. (1) Although an individual's most recent 
total or partial separation after September 30, 1985 must be used for 
the purposes of this paragraph (a)(4)(vi)(B) of this section, the 
individual's first qualifying separation (as defined in paragraph 
(t)(3)(ii) of Sec. 617.3) must be used to determine the weekly and 
maximum amounts payable to the individual in accordance with Sec. Sec. 
617.13 and 617.14.
    (2) The 60-day preclusion rule in paragraph (b)(1) of this section 
shall not be applicable to an individual covered by a certification 
referred to in paragraph (a)(4)(vi)(A) of this section, and who is 
eligible for TRA under the provisions of paragraph (a)(4) of this 
section.
    (3) The 26-week eligibility period for additional TRA (as defined in 
paragraph (m)(2) of Sec. 617.3) is applicable under paragraph (a)(4) of 
this section.
    (b) First week of entitlement. The first week any individual may be 
entitled to a payment of basic TRA shall be the later of:
    (1) The first week beginning more than 60 days after the date of the 
filing of the petition which resulted in the certification under which 
the individual is covered (except in the case of oil and gas workers to 
whom paragraph (a)(4) of this section applies); or
    (2) The first week beginning after the individual's exhaustion of 
all rights to UI including waiting period credit, as determined under 
Sec. 617.11(a)(1)(v) or Sec. 617.11(a)(2), as appropriate.

[59 FR 928, Jan. 6, 1994]



Sec. 617.12  Evidence of qualification.

    (a) State agency action. When an individual applies for TRA, the 
State agency having jurisdiction under Sec. 617.50(a) shall obtain 
information necessary to establish:
    (1) Whether the individual meets the qualifying requirements in 
Sec. 617.11;
    (2) The individual's average weekly wage; and
    (3) For an individual claiming to be partially separated, the 
average weekly hours and average weekly wage in adversely affected 
employment.
    (b) Insufficient data. If information specified in paragraph (a) of 
this section is not available from State agency records or from any 
employer, the State agency shall require the individual to submit a 
signed statement setting forth such information as may be required for 
the State agency to make the determinations required by paragraph (a) of 
this section.
    (c) Verification. A statement made under paragraph (b) of this 
section shall be certified by the individual to be true to the best of 
the individual's knowledge and belief and shall be supported by evidence 
such as Forms W-2, paycheck stubs, union records, income tax returns, or 
statements of fellow workers, and shall be verified by the employer.
    (d) Determinations. The State agency shall make the necessary 
determinations on the basis of information obtained pursuant to this 
section, except that if, after reviewing information obtained under 
paragraph (b) of this section against other available data, including 
agency records, it concludes that such information is not reasonably 
accurate, it shall make appropriate adjustments and shall make the 
determination on the basis of the adjusted data.

[[Page 110]]



Sec. 617.13  Weekly amounts of TRA.

    (a) Regular allowance. The amount of TRA payable for a week of total 
unemployment (including a week of training approved under subpart C of 
this part 617 or under the provisions of the applicabIe State law) shall 
be an amount equal to the most recent weekly benefit amount of UI 
(including dependents' allowances) payable to the individual for a week 
of total unemployment preceding the individual's first exhaustion of UI 
following the individual's first qualifying separation: Provided, that 
in a State in which weeks of UI are paid in varying amounts related to 
wages with separate employers, the weekly amount of TRA shall be 
calculated as it would be to pay extended compensation: Provided, 
further, that where a State calculates a base amount of UI and 
calculates dependents' allowances on a weekly supplemental basis. TRA 
weekly benefit amounts shall be calculated in the same manner and under 
the same terms and conditions as apply to claimants for UI, except that 
the base amount shall not change.
    (b) Increased allowance. An individual in training approved under 
subpart C of this part 617 who is thereby entitled for any week to TRA 
and a training allowance under any other Federal law for the training of 
workers shall be paid in the amount computed under paragraph (a) of this 
section or, if greater, the amount to which the individual would be 
entitled under such other Federal law if the individual applied for such 
allowance, as provided in section 232(b) of the Act. A payment under 
this paragraph (b) shall be in lieu of any training allowance to which 
the individual is entitled under such other Federal law.
    (c) Reduction of amount. An amount of TRA payabIe under paragraph 
(a) or (b) of this section for any week shall be reduced (but not below 
zero) by:
    (1) Income that is deductible from UI under the disqualifying income 
provisions of the applicable State law or Federal unemployment 
compensation law;
    (2) The amount of a training allowance (other than a training 
allowance referred to in paragraph (b) of this section) under any 
Federal law that the individual receives for such week, as provided in 
section 232(c) of the Act. This paragraph (c) shall apply to Veterans 
Educational Assistance, Pell Grants, Supplemental Educational 
Opportunity Grants, and other training allowances under any Federal law 
other than for the training of workers; and
    (3) Any amount that would be deductible from UI for days of absence 
from training under the provisions of the applicable State law which 
apply to individuals in approved training.

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32349, Aug. 24, 1988]



Sec. 617.14  Maximum amount of TRA.

    (a) General rule. Except as provided under paragraph (b) of this 
section, the maximum amount of TRA payable to an individual under a 
certification shall be the amount determined by:
    (1) Multiplying by 52 the weekly amount of TRA payable to such 
individual for a week of total unemployment, as determined under Sec. 
617.13(a); and
    (2) Subtracting from the product derived under paragraph (a)(1) of 
this section, the total sum of UI to which the individual was entitled 
(or would have been entitled if the individual had applied therefor) in 
the individual's first benefit period described in Sec. 
617.11(a)(1)(iv) or, as appropriate, Sec. 617.11(a)(2)(iv). The 
individual's full entitlement shall be subtracted under this paragraph, 
without regard to the amount, if any, that was actually paid to the 
individual with respect to such benefit period.
    (b) Exceptions. The maximum amount of TRA determined under paragraph 
(a) of this section will not include:
    (1) The amount of dependents' allowances paid as a supplement to the 
base weekly amount determined under Sec. 617.13(a);
    (2) The amount of the difference between the individual's weekly 
increased allowances determined under Sec. 617.13(b) and the 
individual's weekly amount determined under Sec. 617.13(a); and
    (3) The amounts paid for additional weeks determined under Sec. 
617.15(b);

but nothing in this paragraph (b) shall affect an individual's 
eligibility for

[[Page 111]]

such supplemental, increased or additional allowances.
    (c) Reduction for Federal training allowance. (1) If a training 
allowance referred to in Sec. 617.13(c)(2) is paid to an individual for 
any week of unemployment with respect to which the individual would be 
entitled (determined without regard to any disqualification under Sec. 
617.18(b)(2)) to TRA, if the individual applied for TRA for such week, 
each week shall be deducted from the total number of weeks of TRA 
otherwise payable to the individual.
    (2) If the training allowance referred to in paragraph (c)(1) of 
this section is less than the amount of TRA otherwise payable to the 
individual for such week, the individual shall, when the individual 
applies for TRA for such week, be paid TRA in an amount not to exceed 
the amount equal to the difference between the individual's regular 
weekly TRA amount, as determined under Sec. 617.13(a), and the amount 
of the training allowance paid to the individual for such week, as 
provided in section 232(c) of the Act.

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32349, Aug. 24, 1988; 
54 FR 22277, May 23, 1989; 59 FR 931, Jan. 6, 1994]



Sec. 617.15  Duration of TRA.

    (a) Basic weeks. An individual shall not be paid basic TRA for any 
week beginning after the close of the 104-week eligibility period (as 
defined in Sec. 617.3(m)(1)), which is applicable to the individual as 
determined under Sec. Sec. 617.3 (m)(1), 617.3(t), and 617.67(e).
    (b) Additional weeks. (1) To assist an individual to complete 
training approved under subpart C of this part, payments may be made as 
TRA for up to 26 additional weeks in the 26-week eligibility period (as 
defined in Sec. 617.3(m)(2)) which is applicable to the individual as 
determined under Sec. Sec. 617.3(m)(2) and 617.67(f).
    (2) To be eligible for TRA for additional weeks, an individual must 
make a bona fide application for such training--
    (i) within 210 days after the date of the first certification under 
which the individual is covered, or
    (ii) if later, within 210 days after the date of the individual's 
most recent partial or total separation (as defined in Sec. Sec. 
617.3(cc) and 617.3(ll)) under such certification.
    (3) Except as provided in paragraph (d) of this section, payments of 
TRA for additional weeks may be made only for those weeks in the 26-week 
eligibility period during which the individual is actually participating 
fully in training approved under Sec. 617.22(a).
    (c) Limit. The maximum TRA payable to any individual on the basis of 
a single certification is limited to the maximum amount of basic TRA as 
determined under Sec. 617.14 plus additional TRA for up to 26 weeks as 
provided in paragraph (b) of this section.
    (d) Scheduled breaks in training. (1) An individual who is otherwise 
eligible will continue to be eligible for basic and additional weeks of 
TRA during scheduled breaks in training, but only if a scheduled break 
is not longer than 14 days, and the following additional conditions are 
met:
    (i) The individual was participating in the training approved under 
Sec. 617.22(a) immediately before the beginning of the break; and
    (ii) The break is provided for in the published schedule or the 
previously established schedule of training issued by the training 
provider or is indicated in the training program approved for the 
worker; and, further
    (iii) The individual resumes participation in the training 
immediately after the break ends.
    (2) A scheduled break in training shall include all periods within 
or between courses, terms, quarters, semesters and academic years of the 
approved training program.
    (3) No basic or additional TRA will be paid to an individual for any 
week which begins and ends within a scheduled break that is 15 days or 
more.
    (4) The days within a break in a training program that shall be 
counted in determining the number of days of the break for the purposes 
of paragraph (d) of this section shall include all calendar days 
beginning with the first day of the break and ending with the last day 
of the break, as provided for in the schedule of the training provider, 
except that any Saturday, Sunday, or official State or National holiday 
occurring during the scheduled break in training, on which training 
would not

[[Page 112]]

normally be scheduled in the training program if there were no break in 
training, shall not be counted in determining the number of days of the 
break for the purposes of paragraph (d) of this section.
    (5) When the worker is drawing basic TRA, the maximum amount of TRA 
payable is not affected by the weeks the worker does not receive TRA 
while in a break period, but the weeks will count against the 104-week 
eligibility period.
    (6) When the worker is drawing additional weeks of TRA to complete 
training, any weeks for which TRA is not paid will count against the 
continuous 26-week eligibility period and the number of weeks payable.

[59 FR 931, Jan. 6, 1994]



Sec. 617.16  Applicable State law.

    (a) What law governs. The applicable State law for any individual, 
for all of the purposes of this part 617, is the State law of the 
State--
    (1) In which the individual is entitled to UI (whether or not the 
individual has filed a claim therefor) immediately following the 
individual's first separation (as defined in paragraph (t)(1) of Sec. 
617.3), or
    (2) If the individual is not so entitled to UI under the State law 
of any State immediately following such first separation, or is entitled 
to UI under the Railroad Unemployment Insurance Act (RRUI), the State 
law of the State in which such first separation occurred.
    (b) Change of law. The State law determined under paragraph (a) of 
this section to be the applicable State law for an individual shall 
remain the applicable State law for the individual until the individual 
becomes entitled to UI under the State law of another State (whether or 
not the individual files a claim therefor).
    (c) UI entitlement. (1) An individual shall be deemed to be entitled 
to UI under a State law if the individual satisfies the base period 
employment and wage qualifying requirements of such State law.
    (2) In the case of a combined-wage claim (Part 616 of this chapter), 
UI entitlement shall be determined under the law of the paying State.
    (3) In case of a Federal UI claim, or a joint State and Federal UI 
claim (Parts 609 and 614 of this Chapter), UI entitlement shall be 
determined under the law of the State which is the applicable State for 
such claims.
    (d) RRUI claimants. If an individual is entitled to UI under the 
Railroad Unemployment Insurance Act, the applicable State law for 
purposes of paragraphs (a) and (b) of this section is the law of the 
State in which the individual's first qualifying separation occurs.
    (e) Liable State. The State whose State law is determined under this 
section to be the applicable State law for any individual shall be the 
liable State for the individual for all purposes of this part 617. Any 
State other than the liable State shall be an agent State.

[59 FR 932, Jan. 6, 1994]



Sec. 617.17  Availability and active search for work.

    (a) Extended Benefit work test applicable. Except as provided in 
paragraph (b) of this section, an individual shall, as a basic condition 
of entitlement to basic TRA for a week of unemployment--
    (1) be unemployed, as defined in the applicable State law for UI 
claimants, and
    (2) be able to work and available for work, as defined in the 
applicable State law for UI claimants, and
    (3) satisfy the Extended Benefit work test in each week for which 
TRA is claimed, as set forth in Sec. Sec. 617.11(a)(1) (vi) and 
617.11(a)(2)(vi).
    (b) Exceptions--(1) Prior to November 21, 1988. The conditions 
stated in paragraphs (a) and (b) of this section shall not be applicable 
to an individual actually participating in training approved under the 
applicable State law or under Sec. 617.22(a), or during a scheduled 
break in the training program if (as determined for the purposes of 
Sec. 617.15 (d)) the individual participated in the training 
immediately before the beginning of the break and resumes participation 
in the training immediately after the break ends, unless the individual 
is ineligible or subject to disqualification under the applicable State 
law or Sec. 617.18 (b)(2).
    (2) On and after November 21, 1988. The conditions stated in 
paragraphs (a)(2) and (a)(3) of this section shall not be

[[Page 113]]

applicable to an individual who is enrolled in or participating in a 
training program approved under Sec. 617.22 (a), or during a break in 
the training program if (as determined for the purposes of Sec. 
617.15(d)) the individual participated in the training immediately 
before the beginning of the break and resumes participation in the 
training immediately after the break ends.

[59 FR 932, Jan. 6, 1994]



Sec. 617.18  Disqualifications.

    (a) State law applies. Except as stated in paragraph (b) of this 
section and Sec. 617.55(b), an individual shall not be paid TRA for any 
week of unemployment the individual is or would be disqualified to 
receive UI under the disqualification provisions of the applicable State 
law, including the provisions of the applicable State law which apply to 
EB claimants and which are consistent with section 202(a)(3) of the 
Federal-State Extended Unemployment Compensation Act of 1970.
    (b) Disqualification of trainees--(1) State law inapplicable. A 
State law shall not be applied to disqualify an individual from 
receiving either UI or TRA because the individual:
    (i) Is enrolled in or is participating in a training program 
approved under Sec. 617.22(a); or
    (ii) Refuses work to which the individual has been referred by the 
State agency, if such work would require the individual to discontinue 
training, or if added to hours of training would occupy the individual 
more than 8 hours a day or 40 hours a week, except that paragraph 
(b)(1)(ii) of this section shall not apply to an individual who is 
ineligible under paragraph (b)(2) of this section; or
    (iii) Quits work, if the individual was employed in work which was 
not suitable (as defined in Sec. 617.22(a)(1)), and it was reasonable 
and necessary for the individual to quit work to begin or continue 
training approved for the individual under Sec. 617.22(a).
    (2) Trainees ineligible. (i) An individual who, without justifiable 
cause, fails to begin participation in a training program which is 
approved under Sec. 617.22(a), or ceases to participate in such 
training, or for whom a waiver is revoked pursuant to Sec. 617.19(c), 
shall not be eligible for basic TRA, or any other payment under this 
part 617, for the week in which such failure, cessation, or revocation 
occurred, or any succeeding week thereafter until the week in which the 
individual begins or resumes participation in a training program that is 
approved under Sec. 617.22(a).
    (ii) For purposes of this section and other provisions of this Part 
617, the following definitions shall be used:
    (A) Failed to begin participation. A worker shall be determined to 
have failed to begin participation in a training program when the worker 
fails to attend all scheduled training classes and other training 
activities in the first week of the training program, without 
justifiable cause.
    (B) Ceased participation. A worker shall be determined to have 
ceased participation in a training program when the worker fails to 
attend all scheduled training classes and other training activities 
scheduled by the training institution in any week of the training 
program, without justifiable cause.
    (C) Justifiable cause. For the purposes of paragraph (b)(2) of this 
section, the term ``justifiable cause'' means such reasons as would 
justify an individual's conduct when measured by conduct expected of a 
reasonable individual in like circumstances, including but not limited 
to reasons beyond the individual's control and reasons related to the 
individual's capability to participate in or complete an approved 
training program.
    (c) Disqualification while in OJT. In no case may an individual 
receive TRA for any week with respect to which the worker is engaged in 
on-the-job training.

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32350, Aug. 24, 1988; 
59 FR 932, Jan. 6, 1994]



Sec. 617.19  Requirement for participation in training.

    (a) In general--(1) Basic requirement. (i) All individuals otherwise 
entitled to basic TRA, for all weeks beginning on and after November 21, 
1988, must either be enrolled in or participating in a training program 
approved under Sec. 617.22(a), or have completed a training program 
approved under Sec. 617.22(a), as provided in Sec. 617.11(a)(2)(vii), 
in order to

[[Page 114]]

be entitled to basic TRA payments for any such week (except for 
continuation of payments during scheduled breaks in training of 14 days 
or less under the conditions stated in Sec. 617.15(d)). The training 
requirement of paragraph (a)(1)(i) of this section shall be waived in 
writing on an individual basis, solely in regard to entitlement to basic 
TRA, if approval of training for the individual is not feasible or is 
not appropriate, as determined in accordance with paragraph (a)(2) of 
this section.
    (ii) As a principal condition of entitlement to additional TRA 
payments, all individuals must actually be participating in a training 
program approved under Sec. 617.22(a), for all weeks beginning before 
November 21, 1988, and for all weeks beginning on and after November 21, 
1988 (except for continuation of payments during breaks in training 
under the conditions stated in Sec. 617.15(d)). Paragraph (a)(2) of 
this section is not applicable in regard to additional TRA, and the 
participation in training requirement of paragraph (a)(1)(ii) of this 
section may not be waived under any circumstances.
    (2) Waiver of participation requirement. When it is determined, in 
accordance with paragraph (a)(2) of this section, that it is not 
feasible or is not appropriate (as such terms are defined in paragraph 
(b) of this section) to approve a training program for an individual 
otherwise entitled to basic TRA, the individual shall be furnished a 
formal written notice of waiver, with an explanation of the reason(s) 
for the waiver and a statement of why training is not feasible or is not 
appropriate in the case of such individual. At a minimum, the written 
statement furnished to the individual shall contain information required 
by Sec. 617.50(e) as well as the following information:
    (i) Name and social security number of the individual;
    (ii) Petition number under which the worker was certified;
    (iii) A statement why the agency has determined that it is not 
feasible or is not appropriate to approve training for the individual at 
that time, and the reason(s) for the finding;
    (iv) A statement that the waiver will be revoked at any time that 
feasible and appropriate training becomes available;
    (v) Any other advice or information the State agency deems 
appropriate in informing the individual;
    (vi) Signature block (with signature) for the appropriate State 
official; and
    (vii) Signature block (with signature) for the worker's 
acknowledgement of receipt.
    (3) Denial of a waiver. In any case in which a determination is made 
to deny to any individual a waiver of the participation requirement, the 
individual shall be furnished a formal written notice of denial of 
waiver, which shall contain all of the information required of formal 
written notices under paragraph (a)(2) of this section.
    (4) Procedure. Any determination under paragraph (a)(2) or paragraph 
(a)(3) of this section shall be a determination to which Sec. Sec. 
617.50 and 617.51 apply, including the requirement that any written 
notice furnished to an individual shall include notice of the 
individual's appeal rights as is provided in Sec. 617.50(e).
    (b) Reasons for issuing a waiver. (1) For the purposes of paragraphs 
(a)(2) and (a)(3) of this section, a waiver of the participation in 
training requirement shall be issued to an individual only upon a 
supported finding that approval of a Sec. 617.22(a) training program 
for that individual is not feasible or is not appropriate at that time.
    (i) Feasible and appropriate. For the purposes of this section:
    (A) Feasible. The term feasible means:
    (1) training is available at that time which meets all the criteria 
of Sec. 617.22(a);
    (2) the individual is so situated as to be able to take full 
advantage of the training opportunity and complete the training; and
    (3) funding is available to pay the full costs of the training and 
any transportation and subsistence expenses which are compensable.

The funding referred to in paragraph (b)(1)(i)(A)(3) of this section 
includes not only TAA program funds but also all other funds available 
under any of the provisions of the Job Training Partnership Act 
(including Title III) or any other Federal, State or private

[[Page 115]]

source that may be utilized for training approvable under Sec. 
617.22(a). Further, the individual's situation in respect to undertaking 
training (as referred to in paragraph (b)(1)(i)(A)(2) of this section) 
shall include taking into account personal circumstances that preclude 
the individual from being able to participate in and complete the 
training program, such as the availability of transportation, the 
ability to make arrangements for necessary child care, and adequate 
financial resources if the weeks of training exceeds the duration of UI 
and TRA payments.
    (B) Appropriate. The term appropriate means being suitable or 
compatible, fitting, or proper. Appropriate, therefore, refers to 
suitability of the training for the worker (including whether there is a 
reasonable prospect which is reasonably foreseeable that the individual 
will be reemployed by the firm from which separated), and compatibility 
of the training for the purposes of the TAA Program. In these respects, 
suitability of training for the individual is encompassed within the 
several criteria in Sec. 617.22 (a), and compatibility with the program 
is covered by the various provisions of subpart C of this part which 
describe the types of training approvable under Sec. 617.22(a) and the 
limitations thereon.
    (ii) Basis for application. Whether training is feasible or 
appropriate at any given time is determined by finding whether, at that 
time, training suitable for the worker is available, the training is 
approvable under subpart C of this part including the criteria in Sec. 
617.22(a), the worker is so situated as to be able to take full 
advantage of the training and satisfactorily complete the training, full 
funding for the training is available from one or more sources in 
accordance with Sec. Sec. 617.24 and 617.25, the worker has the 
financial resources to complete the training when the duration of the 
training program exceeds the worker's eligibility for TRA, and the 
training will commence within 30 days of approval.
    (2) Particular applications. The reasons for any determination that 
training is not feasible or is not appropriate shall be in accord with 
the following:
    (i) Not feasible because--
    (A) The beginning date of approved training is beyond 30 days, as 
required by the definition for ``Enrolled in training'' in Sec. 
617.11(a)(2)(vii)(D),
    (B) Training is not reasonably available to the individual,
    (C) Training is not available at a reasonable cost,
    (D) Funds are not available to pay the total costs of training, or
    (E) Personal circumstances such as health or financial resources, 
preclude participation in training or satisfactory completion of 
training,
    (F) Other (explain).
    (ii) Not appropriate because--
    (A)(1) The firm from which the individual was separated plans to 
recall the individual within the reasonably foreseeable future (State 
agencies must verify planned recalls with the employer),
    (2) Planned recall. For the purpose of determining whether the 
recall or reemployment of an individual is reasonably foreseeable (for 
the purposes of this section and Sec. 617.22), either a specific or 
general type of recall (as set out) shall be deemed to be sufficient.
    (i) Specific recall. A specific recall is where an individual or 
group of individuals who was separated from employment is identified and 
notified by the employer to return to work within a specified time 
period.
    (ii) General recall. A general recall is where the employer 
announces an intention to recall an individual or group of individuals, 
or by other action reasonably signals an intent to recall, without 
specifying any certain date or specific time period.
    (iii) Reasonably foreseeable. For purposes of determining whether 
training should be denied and a training waiver granted, because of a 
planned recall that is reasonably foreseeable, such a planned recall 
includes a specific recall and also includes a general recall (as 
defined in paragraph (b)(2)(ii)(A)(2) of this section) if the general 
recall in each individual's case is reasonably expected to occur before 
the individual exhausts eligibility for any regular UI payments for 
which the individual is or may become entitled. A general recall, in 
which the timing of the recall is reasonably expected to occur after the 
individual's exhaustion of any regular UI

[[Page 116]]

to which the individual is or may become entitled, shall not be treated 
as precluding approval of training, but shall be treated as any other 
worker separation for these purposes.
    (B) The duration of training suitable for the individual exceeds the 
individual's maximum entitlement to basic and additional TRA payments 
and the individual cannot assure financial responsibility for completing 
the training program,
    (C) The individual possesses skills for ``suitable employment'' and 
there is a reasonable expectation of employment in the foreseeable 
future, or
    (D) Other (explain).
    (3) Waivers and able and available. An individual who has been 
furnished a written notice of waiver under paragraph (a)(2) of this 
section (or denial of waiver under paragraph (a)(3) of this section) 
shall be subject to all of the requirements of Sec. 617.17(a), which 
shall continue until the individual is enrolled in a training program as 
required by paragraph (a)(2)(vii) of Sec. 617.11.
    (c) Waiver review and revocations. (1) State agencies must have a 
procedure for reviewing regularly (i.e., every 30 days or less) all 
waivers issued under this section to individuals, to ascertain that the 
conditions upon which the waivers were granted continue to exist. In any 
case in which the conditions have changed--i.e., training has become 
feasible and appropriate--then the waiver must be revoked, and a written 
notice of revocation shall be furnished to the individual involved.
    (2) In addition to the periodic reviews required by paragraph (c)(1) 
of this section, State agencies must have a procedure for revoking 
waivers in individual cases promptly whenever a change in circumstances 
occurs. For example, a written notice of revocation shall be issued to 
the individual concurrent with the approval of the training in which the 
individual has enrolled (if such training is scheduled to commence 
within 30 days), and shall not be issued prior to such approval.
    (3) State agencies may incorporate a revocation section in the 
waiver form or on a separate revocation form. Any determination under 
paragraph (c) of this section shall be a determination to which 
Sec. Sec. 617.50 and 617.51 apply. The information included in a 
written notice of revocation issued under this paragraph (c) shall 
include all of the information required for written notices issued under 
paragraph (a)(2) of this section.
    (d) Recordkeeping and reporting. (1) State agencies must develop 
procedures for compiling and reporting on the number of waivers issued 
and revoked, by reason, as specified in paragraphs (b) and (c) of this 
section, and report such data to the Department of Labor as requested by 
the Department.
    (2) State agencies are not required to forward copies of individual 
waiver and revocation notices to the Department of Labor, unless 
specifically requested by the Department. However, each State agency 
shall retain a copy of every individual waiver and revocation notice 
issued by the State, for such period of time as the Department requires.

(Approved by the Office of Management and Budget under control number 
1205-0016)

[59 FR 932, Jan. 6, 1994]



                     Subpart C_Reemployment Services



Sec. 617.20  Responsibilities for the delivery of reemployment services.

    (a) State agency referral. Cooperating State agencies shall be 
responsible for:
    (1) Advising each adversely affected worker to apply for training 
with the State agency responsible for reemployment services, while the 
worker is receiving UI payments, and at the time the individual files an 
initial claim for TRA; and
    (2) Referring each adversely affected worker to the State agency 
responsible for training and other reemployment services in a timely 
manner.
    (b) State agency responsibilities. The responsibilities of 
cooperating State agencies under subpart C of this part include, but are 
not limited to:
    (1) Interviewing each adversely affected worker regarding suitable 
training opportunities reasonably available to each individual under 
subpart C of this part, reviewing such opportunities with each 
individual, informing each

[[Page 117]]

individual of the requirement for participation in training as a 
condition for receiving TRA, and accepting each individual's application 
for training. Such training may be approved for any adversely affected 
worker at any time after a certification is issued and the worker is 
determined to be covered without regard to whether the worker has 
exhausted all rights to unemployment insurance;
    (2) Registering adversely affected workers for work;
    (3) Informing adversely affected workers of the reemployment 
services and allowances available under the Act and this Part 617, the 
application procedures, the filing date requirements for such 
reemployment services and the training requirement for receiving TRA;
    (4) Determining whether suitable employment, as defined in Sec. 
617.22(a)(1), is available;
    (5) Providing counseling, testing, placement, and supportive 
services;
    (6) Providing or procuring self-directed job search training, when 
necessary;
    (7) Providing training, job search and relocation assistance;
    (8) Developing a training plan with the individual;
    (9) Determining which training institutions offer training programs 
at a reasonable cost and with a reasonable expectation of employment 
following the completion of such training, and procuring such training;
    (10) Documenting the standards and procedures used to select 
occupations and training institutions in which training is approved;
    (11) Making referrals and approving training programs;
    (12) Monitoring the progress of workers in approved training 
programs;
    (13) Developing, and periodically reviewing and updating 
reemployment plans for adversely affected workers;
    (14) Developing and implementing a procedure for reviewing training 
waivers and revocations at least every 30 days to determine whether the 
conditions under which they are issued have changed; and
    (15) Coordinating the administration and delivery of employment 
services, benefits, training, and supplemental assistance for adversely 
affected workers with programs under the Act and under Title III of the 
Job Training Partnership Act.

[59 FR 934, Jan. 6, 1994]



Sec. 617.21  Reemployment services and allowances.

    Reemployment services and allowances shall include, as appropriate, 
the services and allowances as set forth in this section, provided that 
those services included within the scope of paragraphs (a) through (e) 
of this section shall be provided for under any other Federal law other 
than the Act.
    (a) Employment registration. To ensure, so far as practical, that 
individuals are placed in jobs which utilize their highest skills and 
that applicants qualified for job openings are appropriately referred, 
applications for registration shall be taken on adversely affected 
workers who apply for reemployment services.
    (b) Employment counseling. When local job opportunities are not 
readily available, counseling shall be used to assist individuals to 
gain a better understanding of themselves in relation to the labor 
market so that they can more realistically choose or change an 
occupation or make a suitable job adjustment.
    (c) Vocational testing. Testing shall be used to determine which 
individual skills or potentials can be developed by appropriate 
training.
    (d) Job development. A State agency shall develop jobs for 
individuals by soliciting job interviews from public or private 
employers and shall work with potential employers to customize or 
restructure particular jobs to meet individual needs.
    (e) Supportive services. Supportive services shall be provided so 
individuals can obtain or retain employment or participate in employment 
and training programs leading to eventual placement in permanent 
employment. Such services may include work orientation, basic education, 
communication skills, child care, and any other services necessary to 
prepare an individual for full employment in accordance with the 
individual's capabilities and employment opportunities.

[[Page 118]]

    (f) On-the-job training (OJT). OJT is training, in the public or 
private sector, and may be provided to an individual who meets the 
conditions for approval of training, as provided in Sec. 617.22(a), and 
who has been hired by the employer, while the individual is engaged in 
productive work which provides knowledge or skills essential to the full 
and adequate performance of the job.
    (g) Classroom training. This training activity is any training of 
the type normally conducted in a classroom setting, including vocational 
education, and may be provided to individuals when the conditions for 
approval of training are met, as provided in Sec. 617.22(a), to impart 
technical skills and information required to perform a specific job or 
group of jobs. Training designed to enhance the employability of 
individuals by upgrading basic skills, through the provision of courses 
such as remedial education or English-as-a-second-language, shall be 
considered as remedial education approvable under Sec. 617.22(a) if the 
criteria for approval of training under Sec. 617.22(a) are met.
    (h) Self-directed job search. Self-directed job search programs 
shall be initiated to assist individuals in developing skills and 
techniques for finding a job. Such programs vary in design and operation 
and call for a carefully structured approach to individual needs. There 
are basic elements or activities common to all approaches. These 
include:
    (1) Job search workshop. A short (1-3 days) seminar designed to 
provide participants with knowledge on how to find jobs, including labor 
market information, applicant resume writing, interviewing techniques, 
and finding job openings.
    (2) Job finding club. Encompasses all elements of the Job Search 
Workshop plus a period (1-2 weeks) of structured, supervised application 
where participants actually seek employment.
    (i) Job search allowances. The individual, if eligible, shall be 
provided job search allowances under subpart D of this part 617 to 
defray the cost of seeking employment outside of the commuting area.
    (j) Relocation allowances. The individual, if eligible, shall be 
provided relocation allowances under subpart E of this part 617 to 
defray the cost of moving to a new job outside of the commuting area.

[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 934, Jan. 6, 1994]



Sec. 617.22  Approval of training.

    (a) Conditions for approval. Training shall be approved for an 
adversely affected worker if the State agency determines that:
    (1) There is no suitable employment (which may include technical and 
professional employment) available for an adversely affected worker.
    (i) This means that for the worker for whom approval of training is 
being considered under this section, no suitable employment is available 
at that time for that worker, either in the commuting area, as defined 
in Sec. 617.3(k), or outside the commuting area in an area in which the 
worker desires to relocate with the assistance of a relocation allowance 
under subpart E of this part, and there is no reasonable prospect of 
such suitable employment becoming available for the worker in the 
foreseeable future. For the purposes of paragraph (a)(1) of this section 
only, the term ``suitable employment'' means, with respect to a worker, 
work of a substantially equal or higher skill level than the worker's 
past adversely affected employment, and wages for such work at not less 
that 80 percent of the worker's average weekly wage.
    (2) The worker would benefit from appropriate training. (i) This 
means that there is a direct relationship between the needs of the 
worker for skills training or remedial education and what would be 
provided by the training program under consideration for the worker, and 
that the worker has the mental and physical capabilities to undertake, 
make satisfactory progress in, and complete the training. This includes 
the further criterion that the individual will be job ready on 
completion of the training program.
    (3) There is a reasonable expectation of employment following 
completion of such training. (i) This means that, for that worker, given 
the job market conditions expected to exist at the time of

[[Page 119]]

the completion of the training program, there is, fairly and objectively 
considered, a reasonable expectation that the worker will find a job, 
using the skills and education acquired while in training, after 
completion of the training. Any determination under this criterion must 
take into account that ``a reasonable expectation of employment'' does 
not require that employment opportunities for the worker be available, 
or offered, immediately upon the completion of the approved training. 
This emphasizes, rather than negates, the point that there must be a 
fair and objective projection of job market conditions expected to exist 
at the time of completion of the training.
    (4) Training approved by the Secretary is reasonably available to 
the worker from either governmental agencies or private sources (which 
may include area vocational education schools, as defined in section 
195(2) of the Vocational Education Act of 1963, and employers). (i) This 
means that training is reasonably accessible to the worker within the 
worker's commuting area at any governmental or private training (or 
education) provider, particularly including on-the-job training with an 
employer, and it means training that is suitable for the worker and 
meets the other criteria in paragraph (a) of this section. It also means 
that emphasis must be given to finding accessible training for the 
worker, although not precluding training outside the commuting area if 
none is available at the time within the worker's commuting area. 
Whether the training is within or outside the commuting area, the 
training must be available at a reasonable cost as prescribed in 
paragraph (a)(6) of this section.
    (ii) In determining whether or not training is reasonably available, 
first consideration shall be given to training opportunities available 
within the worker's normal commuting area. Training at facilities 
outside the worker's normal commuting area should be approved only if 
such training is not available in the area or the training to be 
provided outside the normal commuting area will involve less charges to 
TAA funds.
    (5) The worker is qualified to undertake and complete such training. 
(i) This emphasizes the worker's personal qualifications to undertake 
and complete approved training. Evaluation of the worker's personal 
qualifications must include the worker's physical and mental 
capabilities, educational background, work experience and financial 
resources, as adequate to undertake and complete the specific training 
program being considered.
    (ii) Evaluation of the worker's financial ability shall include an 
analysis of the worker's remaining weeks of UI and TRA payments in 
relation to the duration of the training program. If the worker's UI and 
TRA payments will be exhausted before the end of the training program, 
it shall be ascertained whether personal or family resources will be 
available to the worker to complete the training. It must be noted on 
the worker's record that financial resources were discussed with the 
worker before the training was approved.
    (iii) When adequate financial resources will not be available to the 
worker to complete a training program which exceeds the duration of UI 
and TRA payments, the training shall not be approved and consideration 
shall be given to other training opportunities available to the worker.
    (6) Such training is suitable for the worker and available at a 
reasonable cost. (i) Such training means the training being considered 
for the worker. Suitable for the worker means that paragraph (a)(5) of 
this section is met and that the training is appropriate for the worker 
given the worker's capabilities, background and experience.
    (ii) Available at a reasonable cost means that training may not be 
approved at one provider when, all costs being considered, training 
substantially similar in quality, content and results can be obtained 
from another provider at a lower total cost within a similar time frame. 
It also means that training may not be approved when the costs of the 
training are unreasonably high in comparison with the average costs of 
training other workers in similar occupations at other providers. This 
criterion also requires taking into consideration the funding of 
training costs from sources other than TAA

[[Page 120]]

funds, and the least cost to TAA funding of providing suitable training 
opportunities to the worker. Greater emphasis will need to be given to 
these elements in determining the reasonable costs of training, 
particularly in view of the requirements in Sec. 617.11(a) (2) and (3) 
that TRA claimants be enrolled in and participate in training.
    (iii) For the purpose of determining reasonable costs of training, 
the following elements shall be considered:
    (A) Costs of a training program shall include tuition and related 
expenses (books, tools, and academic fees), travel or transportation 
expenses, and subsistence expenses;
    (B) In determining whether the costs of a particular training 
program are reasonable, first consideration must be given to the lowest 
cost training which is available within the commuting area. When 
training, substantially similar in quality, content and results, is 
offered at more than one training provider, the lowest cost training 
shall be approved; and
    (C) Training at facilities outside the worker's normal commuting 
area that involves transportation or subsistence costs which add 
substantially to the total costs shall not be approved if other 
appropriate training is available.
    (b) Allowable amounts for training. In approving a worker's 
application for training, the conditions for approval in paragraph (a) 
of this section must be found to be satisfied, including assurance that 
the training is suitable for the worker, is at the lowest reasonable 
cost, and will enable the worker to obtain employment within a 
reasonable period of time. An application for training shall be denied 
if it is for training in an occupational area which requires an 
extraordinarily high skill level and for which the total costs of the 
training are substantially higher than the costs of other training which 
is suitable for the worker.
    (c) Previous approval of training under State law. Training 
previously approved for a worker under State law or other authority is 
not training approved under paragraph (a) of this section. Any such 
training may be approved under paragraph (a) of this section, if all of 
the requirements and limitations of paragraph (a) of this section and 
other provisions of Subpart C of this part are met, but such approval 
shall not be retroactive for any of the purposes of this Part 617, 
including payment of the costs of the training and payment of TRA to the 
worker participating in the training. However, in the case of a 
redetermination or decision reversing a determination denying approval 
of training, for the purposes of this Part 617 such redetermination or 
decision shall be given effect retroactive to the issuance of the 
determination that was reversed by such redetermination or decision; but 
no costs of training may be paid unless such costs actually were 
incurred for training in which the individual participated, and no 
additional TRA may be paid with respect to any week the individual was 
not actually participating in the training.
    (d) Applications. Applications for, selection for, approval of, or 
referral to training shall be filed in accordance with this subpart C 
and on forms which shall be furnished to individuals by the State 
agency.
    (e) Determinations. Selection for, approval of, or referral of an 
individual to training under this subpart C, or a decision with respect 
to any specific training or non-selection, non-approval, or non-referral 
for any reason shall be a determination to which Sec. Sec. 617.50 and 
617.51 apply.
    (f) Length of training and hours of attendance. The State agency 
shall determine the appropriateness of the length of training and the 
hours of attendance as follows:
    (1) The training shall be of suitable duration to achieve the 
desired skill level in the shortest possible time;
    (2) Length of training. The maximum duration for any approvable 
training program is 104 weeks (during which training is conducted) and 
no individual shall be entitled to more than one training program under 
a single certification.
    (3) Training program. (i) For purposes of this Part 617, a training 
program may consist of a single course or group of courses which is 
designed and approved by the State agency for an individual to meet a 
specific occupational goal.

[[Page 121]]

    (ii) When an approved training program involves more than one course 
and involves breaks in training (within or between courses, or within or 
between terms, quarters, semesters and academic years), all such breaks 
in training are subject to the ``14-day break in training'' provision in 
Sec. 617.15(d), for purposes of receiving TRA payments. An individual's 
approved training program may be amended by the State agency to add a 
course designed to satisfy unforeseen needs of the individual, such as 
remedial education or specific occupational skills, as long as the 
length of the amended training program does not exceed the 104-week 
training limitation in paragraph (f)(2) of this section.
    (4) Full-time training. Individuals in TAA approved training shall 
attend training full time, and when other training is combined with OJT 
attendance at both shall be not less than full-time. The hours in a day 
and days in a week of attendance in training shall be full-time in 
accordance with established hours and days of training of the training 
provider.
    (g) Training of reemployed workers. Adversely affected workers who 
obtain new employment which is not suitable employment, as described in 
Sec. 617.22(a)(1), and have been approved for training may elect to:
    (1) Terminate their jobs, or
    (2) Continue in full- or part-time employment, to undertake such 
training, and shall not be subject to ineligibility or disqualification 
for UI or TRA as a result of such termination or reduction in 
employment.
    (h) Fees prohibited. In no case shall an individual be approved for 
training under this subpart C for which the individual is required to 
pay a fee or tuition.
    (i) Training outside the United States. In no case shall an 
individual be approved for training under this subpart C which is 
conducted totally or partially at a location outside the United States.

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32350, Aug. 24, 1988; 
59 FR 935, Jan. 6, 1994]



Sec. 617.23  Selection of training methods and programs.

    (a) State agency responsibilities. If suitable employment as 
described in Sec. 617.22(a)(1), is not otherwise available to an 
individual or group of individuals, it is the responsibility of the 
State agency to explore, identify, develop and secure training 
opportunities and to establish linkages with other public and private 
agencies, Private Industry Councils (PICs), employers, and Job Training 
Partnership Act (JTPA) service delivery area (SDA) grant recipients, as 
appropriate, which return adversely affected workers to employment as 
soon as possible.
    (b) Firm-specific retraining program. To the extent practicable 
before referring an adversely affected worker to approved training, the 
State agency shall consult with the individual's adversely affected firm 
and certified or recognized union, or other authorized representative, 
to develop a retraining program that meets the firm's staffing needs and 
preserves or restores the employment relationship between the individual 
and the firm. The fact that there is no need by other employers in the 
area for individuals in a specific occupation for which training is 
undertaken shall not preclude the development of an individual 
retraining program for such occupation with the adversely affected firm.
    (c) Methods of training. Adversely affected workers may be provided 
either one or a combination of the following methods of training:
    (1) Insofar as possible, priority will be given to on-the-job 
training, which includes related education necessary to acquire skills 
needed for a position within a particular occupation, in the firm or 
elsewhere pursuant to Sec. Sec. 617.24, 617.25, and 617.26, including 
training for which the firm pays the costs. This ensures that on-the-job 
training provides the skills necessary for the individual to obtain 
employment in an occupation rather than a particular job at a specific 
site; and
    (2) Institutional training, with priority given to providing the 
training in public area vocational education schools if it is determined 
that such

[[Page 122]]

schools are at least as effective and efficient as other institutional 
alternatives, pursuant to Sec. Sec. 617.24, 617.25, and 617.26.
    (d) Standards and procedures. The State agency shall document the 
standards and procedures used to select occupations and training 
institutions in which training is approved. Such occupations and 
training shall offer a reasonable expectation (not necessarily a prior 
guarantee) of employment following such training.
    (1) Standards. The State agency shall approve training in 
occupations for which an identifiable demand exists either in the local 
labor market or in other labor markets for which relocation planning has 
been implemented. If practicable, placement rates and employer reviews 
of curriculum shall be used as guides in the selection of training 
institutions.
    (2) Procedures. In determining the types of training to be provided, 
the State agency shall consult with local employers, appropriate labor 
organizations, Job Service Improvement Program Committees, JTPA SDA 
grant recipients, PICs, local educational organizations, local 
apprenticeship programs, local advisory councils established under the 
Carl D. Perkins Vocational Education Act, and post-secondary 
institutions.
    (3) Exclusions. In determining suitable training the State agency 
shall exclude certain occupations, where:
    (i) Lack of employment opportunities exist as substantiated by job 
orders and other pertinent labor market data; or
    (ii) The occupation provides no reasonable expectation of permanent 
employment.



Sec. 617.24  Preferred training.

    Training programs that may be approved under Sec. 617.22(a) 
include, but are not limited to--
    (a) On-the-job training,
    (b) Any training program provided by a State pursuant to Title III 
of the Job Training Partnership Act,
    (c) Any training program approved by a private industry council 
established under the Job Training Partnership Act,
    (d) Any program of remedial education,
    (e) Any training program (other than a training program described in 
paragraph (c) of Sec. 617.25) for which all, or any portion, of the 
costs of training the worker are paid--
    (1) Under any other Federal or State program other than this Subpart 
C, or
    (2) From any other source other than this section, but not including 
sources personal to the individual, such as self, relatives, or friends, 
and
    (f) Any other training program approved by the Department.

[59 FR 936, Jan. 6, 1994]



Sec. 617.25  Limitations on training under Subpart C of this part.

    The second sentence of amended section 236(a)(1) of the Act provides 
that an adversely affected worker shall be entitled to have payment of 
the costs of training approved under the Act paid on the worker's 
behalf, subject, however, ``to the limitations imposed by'' section 236. 
The limitations in section 236 which are implemented in this section 
concern the restrictions on approval of training which are related 
directly or indirectly to the conditions on training which are 
approvable or on the funding of training costs.
    (a) On-the-job training. The costs of on-the-job training approved 
Subpart C of this part for a worker, which are paid from TAA funds, 
shall be paid in equal monthly installments. Such costs may be paid from 
TAA funds, and such training may be approved under subpart C of this 
part, however, only if the State agency determines that:
    (1) No currently employed individual is displaced by such eligible 
worker, including partial displacement such as a reduction in the hours 
of non-overtime work, wages, or employment benefits;
    (2) Such training does not impair existing contracts for services or 
collective bargaining agreements;
    (3) In the case of training which would be inconsistent with the 
terms of a collective bargaining agreement, written concurrence has been 
obtained from the concerned labor organization;
    (4) No other individual is on layoff from the same or any 
substantially equivalent job for which such eligible worker is being 
trained;

[[Page 123]]

    (5) The employer has not terminated the employment of any regular 
employee or otherwise reduced the work force with the intention of 
filling the vacancy so created by hiring the eligible worker;
    (6) The job for which the eligible worker is being trained is not 
being created in a promotional line that will infringe in any way upon 
the promotional opportunities of currently employed individuals;
    (7) Such training is not for the same occupation from which the 
worker was separated and with respect to which such worker's group was 
certified pursuant to section 222 of the Act;
    (8) The employer certifies to the State agency that the employer 
will continue to employ the eligible worker for at least 26 weeks after 
completing the training if the worker desires to continue such 
employment and the employer does not have due cause to terminate such 
employment;
    (9) The employer has not received payment under this Subpart C or 
under any other Federal law for any other on-the-job training provided 
by such employer which failed to meet the requirements of paragraphs 
(a)(1) through (a)(6) of this section or such other Federal law; and
    (10) The employer has not taken, at any time, any action which 
violated the terms of any certification described in paragraph (a)(8) of 
this section made by the employer with respect to any other on-the-job 
training provided by the employer for which the employer has received a 
payment under Subpart C of this part (or the prior provisions of Subpart 
C of this part).
    (b) Other authority and restrictions on funding--
    (1) In general. Section 236(a) contains several provisions which 
allow the costs of a training program approved under the Act to be 
paid--
    (i) Solely from TAA funds,
    (ii) Solely from other public or private funds, or
    (iii) Partly from TAA funds and partly from other public or private 
funds,

but also precludes the use of TAA funds or funds under another Federal 
law where such use of funds would result in duplication of payment of 
training costs. Those authorities and restrictions are spelled out in 
paragraph (b) of this section: Provided, that, private funds may not 
include funds from sources personal to the individual, such as self, 
relatives, or friends.
    (2) Section 236(a)(5)(E) of the Act. (i) In general. Paragraph 
(5)(E) of section 236(a) of the Act specifies one of the types of 
training programs approvable under the Act, as including a program 
(other than a training program described in section 236(a)(7) (paragraph 
(b)(5) of this section)) for which all, or any portion, of the costs of 
the training program are paid--
    (A) Under any Federal or State program other than the Act, or
    (B) From any source other than TAA funds.
    (ii) Application. Paragraph (E) of section 236(a)(5) of the Act thus 
authorizes prearrangements between cooperating State agencies 
administering the TAA program and the authorities administering any 
other Federal, State, or private funding source, to agree upon any mix 
of TAA funds and other funds for paying the costs of a training program 
approved under Subpart C of this part. Any such prearrangement must 
contain specific commitments from the other authorities to pay the costs 
they agree to assume.
    (3) Section 236(a)(6) of the Act. (i) In general. Paragraph (6) of 
section 236(a) of the Act is related to section 236(a)(5)(E) in 
providing that the costs of a training program approved under the Act 
are not required to be paid from TAA funds to the extent that such costs 
are paid under any Federal or State program other than the Act or from 
any source other than the Act.
    (ii) Application. (A) Although paragraph (6) of section 236(a) of 
the Act is expressed in terms of the costs not being required to be paid 
from TAA funds, it authorizes the mixing of TAA funds and funds from any 
other Federal, State or private source. Therefore, sharing the future 
costs of training is authorized where prior costs were paid from another 
Federal, State or private source, but this does not authorize 
reimbursement from TAA funds of any training costs which were incurred 
and for which payment became due prior to the approval of the training 
program under Subpart C of this

[[Page 124]]

part. In utilizing the authority under paragraph (b)(3) of this section 
for sharing training costs, prearrangements shall be entered into as 
required under paragraph (b)(2) of this section before any TAA funds are 
obligated.
    (B) Paragraph (6) of section 236(a) contains a special restriction 
on the authority derived thereunder to use TAA funds in sharing training 
costs. Therefore, before approving any training program under Subpart C 
of this part, which may involve sharing of the training costs under the 
authority of paragraph (b)(3) of this section, the cooperating State 
agencies for the TAA program shall require the worker to enter into a 
written agreement with the State under which TAA funds will not be 
applied for or used to pay any portion of the costs of the training the 
worker has reason to believe will be paid by any other governmental or 
private source.
    (4) Section 236(a)(4) of the Act. (i) In general. (A) Paragraph (4) 
of section 236(a) of the Act (paragraph (3) of section 236(a) before 
August 23, 1988) continues to provide, as it did before the addition of 
paragraphs (5)(E), (6), and (7) to section 236(a), that:
    (1) When the costs of training are paid from TAA funds under subpart 
C of this part, no other payment for such costs of training may be made 
under any other Federal law; and
    (2) When the payment of the costs of training has already been made 
under any other Federal law, or the costs are reimbursable under any 
other Federal law and a portion of the costs has already been paid under 
such other Federal law, payment of such training costs may not be made 
from TAA funds.
    (B) Paragraph (4) of section 236(a) also requires that: The 
provisions of paragraphs (b)(4)(i) (A)(1) and (A)(2) of this section 
shall not apply to, or take into account, any funds provided under any 
other provision of Federal law which are used for any purpose other than 
the direct payment of the identical costs incurred in training the 
adversely affected worker under the TAA Program, even if such other use 
has the effect of indirectly paying or reducing any portion of the costs 
involved in training the adversely affected worker.
    (ii) Application. (A) Although the prohibition on duplicate payments 
in the first part of section 236(a)(4) remains fully implemented in this 
section, the second part of section 236(a)(4) on the sharing of costs 
from TAA funds and other Federal fund sources is modified by the 
explicit provisions of paragraphs (5)(E) and (6) of section 236(a), as 
set forth in paragraphs (b)(2) and (b)(3) of this section.
    (B) When the direct costs of a training program approvable under 
subpart C of this part are payable from TAA funds and are also wholly or 
partially payable under another Federal law, or under any State law or 
from private, nongovernmental sources, the TAA Program agencies shall 
establish procedures which ensure that TAA funds shall not be utilized 
to duplicate funds available from another source, but this preclusion of 
duplication does not prohibit and shall not discourage sharing of costs 
under prearrangements authorized under paragraphs (b)(2) and (b)(3) of 
this section.
    (C)(1) Therefore, pursuant to paragraph (4) of section 236(a), 
paragraph (b)(4) of this section continues to prohibit duplicate payment 
of training costs, which is consistent with the general prohibition 
expressed in subpart C of this part, against any use of TAA funds to 
duplicate payment of training costs in any circumstances. Paragraph 
(b)(4) of this section also continues to prohibit taking into account, 
in determining whether training costs are payable from TAA funds, any 
payments to the worker under any other Federal law which may have the 
effect of indirectly paying all or a portion of the training costs. Such 
indirect payments include Veterans Educational Assistance, Pell Grants, 
and Supplemental Educational Opportunity Grants, which are paid to the 
individual. However, any payments to the individual under these programs 
are deductible from TRA payable to the individual under Sec. 
617.13(c)(2).
    (2) When payments of Veterans Educational Assistance, Pell Grants, 
and Supplemental Educational Opportunity Grants are made to the training 
provider, instead of the individual, and are used for training costs, 
such payments shall be taken into account as direct

[[Page 125]]

payment of the training costs under other Federal law for the purposes 
of this section.
    (5) Section 236(a)(7) of the Act. (i) In general. Paragraph (7) of 
section 236(a) of the Act provides that a training program shall not be 
approved under the Act if--
    (A) all or a portion of the costs of such training program are paid 
under any nongovernmental plan or program,
    (B) the adversely affected worker has a right to obtain training or 
funds for training under such plan or program, and
    (C) such plan or program requires the worker to reimburse the plan 
or program from funds provided under the Act, or from wages paid under 
such training program, for any portion of the costs of such training 
program paid under the plan or program.
    (ii) Application. Paragraph (7) of section 236(a), which is 
implemented in paragraph (b)(5) of this section, reinforces the 
prohibition in Sec. 617.22(h) against approval of a training program 
under subpart C of this part if the worker is required to pay a fee or 
tuition. The provisions of paragraph (b) and paragraph (h) of this 
section shall be given effect as prohibiting the approval under subpart 
C of this part of any training program if the worker would be requested 
or required, at any time or under any circumstances, to pay any of the 
costs of a training program, however small, from any TAA funds given to 
the worker or from any other funds belonging to the worker from any 
source whatever. Aside from this stringent limitation, however, 
paragraph (7) of section 236(a) of the Act implicitly authorizes 
training approved under this subpart C to be wholly or partly funded 
from nongovernmental (i.e., employer, union or other private) sources.

[59 FR 936, Jan. 6, 1994]



Sec. 617.26  Liable and agent State responsibilities.

    (a) Liable State. The liable State means, for any individual, the 
State which administers the applicable State law (as determined under 
Sec. 617.16). The liable State is responsible for making all 
determinations, redeterminations, and decisions on appeals on all claims 
for program benefits under this part 617, including waivers and 
revocations of waivers pursuant to Sec. 617.19, subsistence payments 
pursuant to Sec. 617.27, and transportation payments pursuant to Sec. 
617.28. Upon receiving a copy of a certification issued by the 
Department, with respect to an affected firm in the State, the liable 
State also is responsible for publishing newspaper notices as provided 
in Sec. 617.4(d), furnishing information and assistance to workers as 
provided in Sec. 617.4, furnishing reemployment services under subparts 
C, D, and E of this part to all eligible workers covered by such 
certification, and carrying out other activities and functions required 
by the State's Agreement with the Secretary entered into pursuant to 
Sec. 617.59. All determinations pertaining to any individual's 
eligibility for or entitlement to any program benefit under this part 
617 shall be subject to the provisions of Sec. Sec. 617.50 and 617.51.
    (b) Agent State. Agent State means, for any individual, any State 
other than the liable State for the individual. Agent States shall be 
responsible for cooperating fully with the liable State and assisting 
the liable State in carrying out its activities and functions. These 
agent State responsibilities shall be part of the activities and 
functions undertaken by the agent States under their Agreements entered 
into pursuant to Sec. 617.59. Agent State responsibilities include 
cooperating with liable States in taking applications and claims for 
TAA, providing reemployment services to certified workers in accordance 
with subparts B, C, D and E of this part, providing interstate claimants 
with TAA program information and assistance, assisting applicants or 
claimants to file claims for TAA program benefits and services, 
cooperating with the liable State by providing information needed to 
issue determinations, redeterminations, and decisions on appeals, and 
procuring and paying the cost of any approved training, including 
subsistence and transportation costs, according to determinations issued 
by the liable State.

[59 FR 938, Jan. 6, 1994]

[[Page 126]]



Sec. 617.27  Subsistence payments.

    (a) Eligibility. A trainee under this subpart C shall be afforded 
supplemental assistance necessary to pay costs of separate maintenance 
when the training facility is located outside the commuting area, but 
may not receive such supplemental assistance for any period for which 
the trainee receives such a payment under the JTPA, or any other law, or 
for any day referred to under Sec. 617.28(c)(3) pursuant to which a 
transportation allowance is payable to the individual, or to the extent 
the individual is entitled to be paid or reimbursed for such expenses 
from any other source.
    (b) Amount. Subsistence payments shall not exceed the lesser of:
    (1) The individual's actual per diem expenses for subsistence; or
    (2) 50 percent of the prevailing per diem rate authorized under the 
Federal travel regulations (see 41 CFR part 101-7) for the locale of the 
training.
    (c) Applications. Applications for subsistence payments shall be 
filed in accordance with this subpart C and on forms which shall be 
furnished to trainees by the State agency. Such payments shall be made 
on completion of a week of training, except that at the beginning of a 
training project a State agency may advance a payment for a week if it 
determines that such advance is necessary to enable a trainee to accept 
training. An adjustment shall be made if the amount of an advance is 
less or more than the amount to which the trainee is entitled under 
paragraph (b) of this section. A determination as to an application made 
under this section shall be subject to Sec. Sec. 617.50 and 617.51.
    (d) Unexcused absences. No subsistence payment shall be made to an 
individual for any day of unexcused absence as certified by the 
responsible training facility.



Sec. 617.28  Transportation payments.

    (a) Eligibility. A trainee under this subpart C shall be afforded 
supplemental assistance necessary to pay transportation expenses if the 
training is outside the commuting area, but may not receive such 
assistance if transportation is arranged for the trainee as part of a 
group and paid for by the State agency or to the extent the trainee 
receives a payment of transportation expenses under another Federal law, 
or to the extent the individual is entitled to be paid or reimbursed for 
such expenses from any other source.
    (b) Amount. A transportation allowance shall not exceed the lesser 
of:
    (1) The actual cost for travel by the least expensive means of 
transportation reasonably available between the trainee's home and the 
training facility; or
    (2) The cost per mile at the prevailing mileage rate authorized 
under the Federal travel regulations. See 41 CFR part 101-7.
    (c) Travel included. Travel for which a transportation allowance 
shall be paid includes travel:
    (1) At the beginning and end of the training program;
    (2) When the trainee fails for good cause, as described in Sec. 
617.18(b)(2), to complete the training program; and
    (3) For daily commuting, in lieu of subsistence, but not exceeding 
the amount otherwise payable as subsistence for each day of commuting.
    (d) Applications. Applications for transportation payments shall be 
filed in accordance with this subpart C and on forms which shall be 
furnished to trainees by the State agency. Payments may be made in 
advance. An adjustment shall be made if the amount of an advance is less 
or more than the amount to which the trainee is entitled under paragraph 
(b) of this section. A determination as to an application made under 
this section shall be subject to Sec. Sec. 617.50 and 617.51.



Sec. 617.29  Application of EB work test.

    (a) Registration for employment. Adversely affected workers who have 
exhausted all rights to UI and who otherwise qualify for TRA under Sec. 
617.11, shall, except as provided in paragraph (b) of this section:
    (1) Register for work and be referred to work by the State agency in 
the same manner as required for EB claimants under the applicable State 
law provisions which are consistent with section 202(a)(3) of the 
Federal-State Extended Unemployment Compensation Act of 1970; and

[[Page 127]]

    (2) Be subject to the work test requirements for EB claimants under 
the applicable State law provisions which are consistent with section 
202(a)(3) of the Federal-State Extended Unemployment Compensation Act of 
1970.
    (b) Exceptions. Paragraph (a) of this section shall not apply to any 
week an individual is undergoing training approved under this subpart C.



                     Subpart D_Job Search Allowances



Sec. 617.30  General.

    A job search allowance shall be granted an adversely affected worker 
to assist the individual in securing a job within the United States as 
provided in this subpart D.



Sec. 617.31  Applications.

    (a) Forms. Applications for job search allowances shall be filed in 
accordance with this subpart D and on forms which shall be furnished to 
individuals by the State agency.
    (b) Submittal. An application may be submitted to a State agency at 
any time by an individual who has been totally or partially separated 
whether or not a certification covering the individual has been made. 
However, an application must be submitted to a State agency before the 
job search begins for the job search allowance to be granted, and the 
job search may not be approved until after the individual is covered 
under a certification.
    (c) Time limits. Notwithstanding paragraph (b) of this section, a 
job search allowance application may be approved only if submitted 
before:
    (1) The 365th day after the date of the certification under which 
the individual is covered, or the 365th day after the date of the 
individual's last total separation, whichever is later; or
    (2) The 182d day after the concluding date of training approved 
under subpart C of this part 617, or approved under the regulations 
superseded by this part 617.



Sec. 617.32  Eligibility.

    (a) Conditions. Job search allowance eligibility requires:
    (1) A timely filed application;
    (2) Total separation from adversely affected employment at the time 
the job search commences;
    (3) Registration with the State agency which shall furnish the 
individual such reemployment services as are appropriate under subpart C 
of this part 617.
    (4) A determination by the State agency that the individual has no 
reasonable expectation of securing suitable employment in the commuting 
area, and has a reasonable expectation of obtaining suitable employment 
of long-term duration outside the commuting area and in the area where 
the job search will be conducted. For the purposes of this section, the 
term ``suitable employment'' means suitable work as defined in Sec. 
617.3(kk) (1) or (2), whichever is applicable to the individual; and
    (5) Completion of the job search within a reasonable period not 
exceeding 30 days after the day on which the job search began.
    (b) Completion of job search. A job search is deemed completed when 
the individual either secures employment or has contacted each employer 
to whom referred by the State agency in connection with a job search.
    (c) Verification of employer contacts. The State agency shall verify 
contacts with employers certified by the individual.

[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 938, Jan. 6, 1994]



Sec. 617.33  Findings required.

    (a) Findings by liable State. Before final payment of a job search 
allowance may be approved, the following findings shall be made by the 
liable State:
    (1) The individual meets the eligibility requirements for a job 
search allowance specified in Sec. 617.32(a) (1) through (4);
    (2) The application for a job search allowance was submitted by the 
individual within the time limits specified in Sec. 617.31(c); and
    (3) The individual completed the job search within the time limits 
stated in Sec. 617.32(a)(5), and the requirements of paragraphs (b) and 
(c) of Sec. 617.32 have been met.

[[Page 128]]

    (b) Agent State. (1) When an individual files an application for a 
job search allowance with respect to a job search conducted in a State 
other than the liable State, the State agency of the State in which the 
individual conducts the job search shall serve as the agent State and be 
responsible for assisting the individual in conducting the job search 
and in filing an application for a job search allowance with the liable 
State, and for assisting the liable State by furnishing to it any 
information required for the liable State's determination of the claim.
    (2) The agent State shall cooperate fully with the liable State in 
carrying out its activities and functions with regard to such 
applications.

[59 FR 938, Jan. 6, 1994]



Sec. 617.34  Amount.

    (a) Computation. The amount of a job search allowance shall be 90 
percent of the total costs of each of the following allowable 
transportation and subsistence items:
    (1) Travel. The more cost effective mode of travel reasonably 
available shall be approved by using:
    (i) The actual cost of round trip travel by the most economical 
public transportation the individual reasonably can be expected to take 
from the individual's residence to the area of job search; or
    (ii) The cost per mile at the prevailing mileage rate authorized 
under the Federal travel regulations (see 41 CFR part 101-7) for such 
roundtrip travel by the usual route from the individual's residence to 
the area of job search.
    (2) Lodging and meals. The cost allowable for lodging and meals 
shall not exceed the lesser of:
    (i) The actual cost to the individual of lodging and meals while 
engaged in the job search; or
    (ii) 50 percent of the prevailing per diem allowance rate authorized 
under the Federal travel regulations (see 41 CFR part 101-7) for the 
locality where the job search is conducted.
    (b) Limit. The total job search allowances paid to an individual 
under a certification may not exceed $800, regardless of the number of 
job searches undertaken by the individual. The amounts otherwise payable 
under paragraph (a) of this section shall be reduced by any amounts the 
individual is entitled to be paid or reimbursed for such expenses from 
any other source.

[51 FR 45848, Dec. 22, 1986, as amended at 51 FR 45869, Dec. 22, 1986; 
53 FR 32351, Aug. 24, 1988; 59 FR 939, Jan. 6, 1994]



Sec. 617.35  Time and method of payment.

    (a) Determinations. A State agency shall promptly make and record 
determinations necessary to assure entitlement of an individual to a job 
search allowance at any time, before or after a certification covering 
the individual is made. No job search allowance may be paid or advanced 
to an individual until the State agency determines that the individual 
is covered under a certification. A State agency shall make payment as 
promptly as possible upon determining that the individual is covered 
under a certification and is otherwise eligible.
    (b) Payment. Unless paragraph (a) of this section applies, a job 
search allowance shall be paid promptly after an individual completes a 
job search and complies with paragraph (d) of this section.
    (c) Advances. A State agency may advance an individual (except an 
individual not yet covered under a certification) 60 percent of the 
estimated amount of the job search allowance payable on completion of 
the job search, but not exceeding $360, within 5 days prior to 
commencement of a job search. Such advance shall be deducted from any 
payment under paragraph (b) of this section.
    (d) Worker evidence. On completion of a job search, the individual 
shall certify on forms furnished by the State agency as to employer 
contacts made and amounts expended daily for lodging and meals. Receipts 
shall be required for all lodging and purchased transportation expenses 
incurred by the individual pursuant to the job search. An adjustment 
shall be made if the amount of an advance is less or more than the 
amount to which the individual is entitled under Sec. 617.34.

[[Page 129]]



                     Subpart E_Relocation Allowances



Sec. 617.40  General.

    A relocation allowance shall be granted an adversely affected worker 
to assist the individual and the individual's family, if any, to 
relocate within the United States as stated in this subpart E. A 
relocation allowance may be granted an individual only once under a 
certification. A relocation allowance shall not be granted to more than 
one member of a family with respect to the same relocation. If 
applications for a relocation allowance are made by more than one member 
of a family as to the same relocation, the allowance shall be paid to 
the head of the family if otherwise eligible.



Sec. 617.41  Applications.

    (a) Forms. Applications for a relocation allowance shall be filed in 
accordance with this subpart E and on forms which shall be furnished by 
the State agency.
    (b) Submittal. An application may be submitted to the State agency 
at any time by an individual who has been totally or partially separated 
regardless of whether a certification covering the individual has been 
made. However, an application must be submitted to a State agency before 
the relocation begins for the relocation allowance to be granted, and 
the relocation may not be approved until after the individual is covered 
under a certification.
    (c) Time limits. Notwithstanding paragraph (b) of this section, an 
application for a relocation allowance may not be approved unless 
submitted before:
    (1) The 425th day after the date of the certification under which 
the individual is covered, or the 425th day after the date of the 
individual's last total separation, whichever is later; or
    (2) The 182d day after the concluding date of training approved 
under subpart C of this part 617, or approved under the regulations 
superseded by this part 617.



Sec. 617.42  Eligibility.

    (a) Conditions. Eligibility for a relocation allowance requires:
    (1) A timely filed application;
    (2) Total separation from adversely affected employment at the time 
relocation commences;
    (3) No prior receipt of a relocation allowance under the same 
certification;
    (4) Relocation within the United States and outside the individual's 
present commuting area;
    (5) Registration with the State agency which shall furnish the 
individual such reemployment services as are appropriate under subpart C 
of this part 617;
    (6) A determination by the State agency that the individual has no 
reasonable expectation of securing suitable employment in the commuting 
area, and has obtained suitable employment affording a reasonable 
expectation of employment of long-term duration, or a bona fide offer of 
such suitable employment, outside the commuting area and in the area of 
intended relocation. For the purposes of this section, the term 
``suitable employment'' means suitable work as defined in Sec. 
617.3(kk) (1) and (2), whichever is applicable to the individual; and
    (7) Relocation beginning within a reasonable period, as determined 
under Sec. 617.43(b), and completion of such relocation within a 
reasonable period of time as determined in accordance with Federal 
travel regulations and Sec. 617.43(a).
    (b) Job search. Applications for a relocation allowance and a job 
search allowance may not be approved concurrently, but the prior payment 
of a job search allowance shall not otherwise preclude the payment of a 
relocation allowance.

[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 939, Jan. 6, 1994]



Sec. 617.43  Time of relocation.

    (a) Applicable considerations. In determining whether an 
individual's relocation is completed in a reasonable period of time, a 
State agency, among other factors, shall consider whether:
    (1) Suitable housing is available in the area of relocation;
    (2) The individual can dispose of the individual's residence;
    (3) The individual or a family member is ill; and
    (4) A member of the individual's family is attending school and when 
the

[[Page 130]]

member can best be transferred to a school in the area of relocation.
    (b) Time limits. The reasonable period for actually beginning a 
relocation move shall expire 182 days after the date of application for 
a relocation allowance, or 182 days after the conclusion of training 
approved under subpart C of this part 617, or approved under the 
regulations in former 29 CFR part 91, in effect prior to its 
redesignation as this 20 CFR part 617 and its concurrent revision.



Sec. 617.44  Findings required.

    (a) Findings by liable State. Before final payment of a relocation 
allowance may be approved, the following findings shall be made by the 
liable State:
    (1) The individual meets the eligibility requirements for a 
relocation allowance specified in Sec. 617.42(a) (1) to (6) and Sec. 
617.42(b).
    (2) The application for a relocation allowance was submitted by the 
individual within the time limits specified in Sec. 617.41(c);
    (3) The individual began and completed the relocation within the 
limitations specified in Sec. 617.42(a)(7) and Sec. 617.43; and
    (4) The liable State has verified (directly or through the agent 
State) with the employer, and finds, that the individual has obtained 
suitable employment affording a reasonable expectation of employment of 
long-term duration, or a bona fide offer of such suitable employment, in 
the area of intended relocation, in accordance with Sec. 617.42(a)(6).
    (b) Agent State. (1) When an individual relocates in a State other 
than the liable State, the State agency of the State in which the 
individual relocates shall serve as the agent State and be responsible 
for:
    (i) Assisting the individual in relocating to the State, and in 
filing an application for a relocation allowance with the liable State, 
and
    (ii) Assisting the liable State by furnishing to it any information 
required for the liable State's determination on the claim.
    (2) The agent State shall cooperate with the liable State in 
carrying out its activities and functions with regard to such 
applications. When requested by the liable State, the agent State shall 
verify with the employer and report to the liable State whether the 
individual has obtained suitable employment affording a reasonable 
expectation of employment of long-term duration, or a bona fide offer of 
such suitable employment.

[59 FR 939, Jan. 6, 1994]



Sec. 617.45  Amount.

    (a) Items allowable. The amount payable as a relocation allowance 
shall include the following items:
    (1) 90 percent of the travel expenses for the individual and family, 
if any, from the individual's place of residence to the area of 
relocation, as determined under Sec. 617.46;
    (2) 90 percent of the expenses of moving household goods and 
personal effects of the individual and family, if any, not to exceed the 
maximum number of pounds net weight authorized under the Federal travel 
regulations (see 41 CFR part 101-7), between such locations, as 
determined under Sec. 617.47; and
    (3) A lump sum payment, equal to 3 times the individual's average 
weekly wage, not to exceed $800.
    (b) Reduction. The amount otherwise payable under paragraphs (a)(1) 
and (a)(2) of this section shall be reduced by any amount the individual 
is entitled to be paid or reimbursed for such expenses from any other 
source.

[51 FR 45848, Dec. 22, 1986, as amended at 51 FR 45869, Dec. 22, 1986]



Sec. 617.46  Travel allowance.

    (a) Computation. The amount of travel allowance (including lodging 
and meals) payable under Sec. 617.45(a)(1) shall be 90 percent of the 
total costs of each of the following allowable transportation and 
subsistence items:
    (1) Transportation. The more cost effective mode of transportation 
reasonably available shall be approved by using:
    (i) The actual cost of transportation for the individual and family, 
if any, by the most economical public transportation the individual and 
family reasonably can be expected to take from

[[Page 131]]

the individual's old residence to the individual's new residence in the 
area of relocation; or
    (ii) The cost per mile at the prevailing mileage rate authorized 
under the Federal travel regulations (see 41 CFR part 101-7) for the 
usually traveled route from the individual's old residence to the 
individual's new residence in the area of relocation. No additional 
mileage shall be payable for family members traveling on the same trip 
in the same vehicle.
    (2) Lodging and meals. The cost allowable for lodging and meals for 
an individual or each member of the individual's family shall not exceed 
the lesser of:
    (i) The actual cost to the individual for lodging and meals while in 
travel status; or
    (ii) 50 percent of the prevailing per diem allowance rate authorized 
under the Federal travel regulations (see 41 CFR part 101-7) for the 
locality to which the relocation is made.
    (b) Separate travel. If, for good cause, a member or members of an 
individual's family must travel separately to the individual's new 
residence, 90 percent of the total costs of such separate travel, 
computed in accordance with paragraph (a) of this section, shall be 
included in calculating the total amount the individual is entitled to 
be paid under this subpart E. For purposes of this paragraph (b), good 
cause means such reasons as would justify the family member's inability 
to relocate with the other members of the individual's family, including 
but not limited to reasons related to the family member's health, 
schooling or economic circumstances.
    (c) Limitation. In no case may the individual be paid a travel 
allowance for the individual or a member of the individual's family more 
than once in connection with a single relocation.

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32351, Aug. 24, 1988]



Sec. 617.47  Moving allowance.

    (a) Computation. The amount of a moving allowance payable under 
Sec. 617.45(a)(2) shall be 90 percent of the total of the allowable 
costs under either (1), (2), or (3) of this paragraph, and 90 percent of 
the total allowable costs under (4) of this paragraph:
    (1) Commercial carrier. Allowable costs for moving household goods 
and personal effects of an individual and family, if any, shall not 
exceed the maximum number of pounds net weight authorized under the 
Federal travel regulations (see 41 CFR part 101-7) by commercial carrier 
from the individual's old residence to the individual's new residence in 
the area of relocation, including reasonable and necessary accessorial 
charges, by the most economical commercial carrier the individual 
reasonably can be expected to use. Before undertaking such move, the 
individual must submit to the State agency an estimate from a commercial 
carrier as to the cost thereof. Accessorial charges shall include the 
cost of insuring such goods and effects for their actual value or 
$10,000, whichever is least, against loss or damage in transit, if a bid 
from a licensed insurer is obtained by the individual and approved by 
the State agency before departure. If a State agency finds it is more 
economical to pay a carrier an extra charge to assume the responsibility 
of a common carrier for such goods and effects, 90 percent of such extra 
charge, but not exceeding $50, shall be paid in lieu of the cost of 
insurance.
    (2) Trailer or rental truck--(i) Trailer. If household goods and 
personal effects are moved by trailer, the allowable costs shall be:
    (A) If the trailer is hauled by private vehicle, the cost per mile 
for the use of the private vehicle at the prevailing mileage rate 
authorized under the Federal travel regulations (see 41 CFR part 101-7) 
for the usually traveled route from the individual's old residence to 
the individual's new residence in the area of relocation; and
    (B) lf the trailer is rented, and of the type customarily used for 
moving household goods and personal effects, the rental fee for each day 
reasonably required to complete the move; or
    (C) The actual charge if hauling is by commercial carrier,
    (ii) Rental truck. If household goods and personal effects are moved 
by rental truck of the type customarily used

[[Page 132]]

for moving household goods and personal effects, the allowable costs 
shall be:
    (A) The rental fee for each day reasonably required to complete the 
move; and
    (B) The necessary fuel for such rental truck paid by the individual.
    (3) House trailer. If a house trailer or mobile home was used as the 
individual's place of residence in the old area and will be so used in 
the new area, the allowable costs of moving such house trailer or mobile 
home shall be:
    (i) The commercial carrier's charges for moving the house trailer or 
mobile home;
    (ii) Charges for unblocking and reblocking;
    (iii) Ferry charges, bridge, road, and tunnel tolls, taxes, fees 
fixed by a State or local authority for permits to transport the unit in 
or through its jurisdiction, and retention of necessary flagmen; and
    (iv) The cost of insuring the house trailer or mobile home, and the 
personal effects of the individual and family, against loss or damage in 
transit, in accordance with the provisions in paragraph (a)(1) of this 
section.
    (4) Temporary storage. If temporary storage of household goods and 
personal effects is necessary, the cost of such temporary storage for a 
period not to exceed 60 days.
    (b) Travel. Payments under this section shall be in addition to 
payments for travel expenses for the individual and family, if any, 
under Sec. 617.45(a)(1), except that the allowable cost for a private 
vehicle used to haul a trailer may not be paid under this section if any 
cost with respect to such private vehicle is payable under any other 
provisions of this subpart E.



Sec. 617.48  Time and method of payment.

    (a) Determinations. A State agency shall promptly make and record 
determinations necessary to assure an individual's entitlement to a 
relocation allowance at any time, before or after a certification 
covering the individual is made. No relocation allowance may be paid or 
advanced to an individual until the State agency determines that the 
individual is covered under a certification. A State agency shall make 
payment as promptly as possible upon determining that the individual is 
covered under a certification and is otherwise eligible.
    (b) Travel and moving allowances. Allowances computed under 
Sec. Sec. 617.46 and 617.47 shall be paid as follows:
    (1) Travel--(i) Transportation and subsistence. The amounts 
estimated under Sec. 617.46 at 90 percent of the lowest allowable costs 
shall be paid in advance at the time an individual departs from the 
individual's residence to begin relocation or within 10 days prior 
thereto. An amount payable for a family member approved for separate 
travel shall be paid to the individual at the time of such family 
member's departure or within 10 days prior thereto.
    (ii) Worker evidence. On completion of a relocation, the individual 
shall certify on forms furnished by the State agency as to the amount 
expended daily for lodging and meals. Receipts shall be required for all 
lodging and purchased transportation expenses incurred by the individual 
and family, if any, pursuant to the relocation. An adjustment shall be 
made if the amount of an advance is less or more than the amount to 
which the individual is entitled under Sec. 617.46.
    (2) Moving. The amount estimated under Sec. 617.47 at 90 percent of 
the lowest allowable costs shall be paid:
    (i) Commercial carrier. (A) If household goods and personal effects 
are moved by commercial carrier, 90 percent of the amount of the 
estimate submitted by the individual under Sec. 617.47(a)(1) and 
approved by the State agency for covering the cost of such move, and 90 
percent of the other charges approved by the State agency under Sec. 
617.47(a)(1) shall be advanced by check or checks payable to the carrier 
and insurer, and delivered to the individual at the time of the 
scheduled shipment or within 10 days prior thereto. On completion of the 
move, the individual shall promptly submit to the State agency a copy of 
the bill of lading prepared by the carrier, including a receipt 
evidencing payment of moving costs. The individual shall with such 
submittal reimburse the State agency the amount, if any, by which the 
advance made under

[[Page 133]]

this paragraph (b)(2)(i) exceeds 90 percent of the actual moving costs 
approved by the State agency. The individual shall be paid the 
difference if the amount advanced was less than 90 percent of the actual 
moving costs approved by the State agency.
    (B) If more economical, a State agency may make direct arrangements 
for moving and insuring an individual's household goods and personal 
effects with a carrier and insurer selected by the individual and may 
make payment of 90 percent of moving and insurance costs directly to the 
carrier and insurer. No such arrangement shall release a carrier from 
liability otherwise provided by law or contract for loss or damage to 
the individual's goods and effects. The United States shall not be or 
become liable to either party for personal injury or property loss 
damage under any circumstances.
    (ii) Trailer or rental truck--(A) Private vehicle with trailer. If 
the move is by private vehicle and trailer, the allowable cost for the 
use of the private vehicle shall be made at the time payment is made 
under paragraph (b)(1) of this section.
    (B) Rental trailer or rental truck. If the move is by rental trailer 
or rental truck:
    (1) The individual shall submit an estimate of the rental cost from 
the rental agency; and
    (2) 90 percent of such estimated rental cost may be advanced by 
check payable to the order of the individual and the rental agency at 
the time payment is made under paragraph (b)(1) of this section; and
    (3) On completion of the move the individual shall submit promptly 
to the State agency a receipted bill itemizing and evidencing payment of 
the rental charges for the trailer or truck and fuel costs, and shall 
reimburse the State agency for the amount, if any, by which the advance 
made for the trailer or truck exceeds 90 percent of the rental charges 
approved by the State agency. If the amount of the advance was less than 
90 percent of the rental charges, the individual shall be paid the 
difference.
    (iii) House trailer. If a house trailer or mobile home is moved by 
commercial carrier, the individual shall submit to the State agency an 
estimate of the cost of the move by the commercial carrier. A check for 
90 percent of the amount of the estimate, if approved, payable to the 
individual and the carrier, may be delivered to the individual at the 
time of the scheduled move or within 10 days prior thereto.
    (c) Lump sum allowance. The lump sum allowance provided in Sec. 
617.45(a)(3) shall be paid when arrangements are completed for 
relocation of the individual and family, if any, but not more than 10 
days before the earlier of the individual's anticipated departure from 
the individual's residence to begin relocation or the anticipated date 
of shipment of the individual's household goods and personal effects.
    (d) Relocation completed. A relocation is completed when an 
individual and family, if any, and their household goods and personal 
effects arrive at the individual's residence in the area of relocation. 
If no household goods and personal effects are moved, a relocation is 
completed when the individual and family, if any, arrive in the area of 
relocation and establish a residence in the new area. The later arrival 
of a family member approved for separate travel shall not alter the date 
a relocation was completed.



                      Subpart F_Job Search Program



Sec. 617.49  Job Search Program.

    (a) Program requirements. (1) A worker, after being separated from 
adversely affected employment, must participate in an approved job 
search program (JSP), or have completed a JSP, as a condition for 
receiving TRA, except where the State agency determines that an 
acceptable JSP is not reasonably available.
    (2) A TRA claimant is subject to participation in a JSP as a 
condition for receiving TRA for weeks of unemployment which begin after 
the date the claimant is notified of the requirement and has filed an 
initial claim for TRA. The claimant is not subject to the JSP as a 
condition for receiving TRA for weeks which begin prior to that date.
    (3) When the State agency determines that the worker has failed to 
begin participation in an approved JSP, or ceased to participate in such 
a

[[Page 134]]

JSP before completion, and there is no justifiable cause for such 
failure or cessation, no TRA may be paid to the worker for weeks 
beginning with the week that failure or cessation occurred when it is 
determined that such failure or cessation was without justifiable cause. 
TRA may be paid thereafter to an otherwise eligible worker only for 
weeks beginning with the week the worker begins or resumes participation 
in an approved JSP or complete the JSP. For purposes of this paragraph 
(a)(3), justifiable cause means such reasons as would justify an 
individual's conduct when measured by conduct expected of a reasonable 
individual in like circumstances, including but not limited to reasons 
beyond the individual's control and reasons related to the individual's 
capability to enroll in an approved JSP or complete the JSP.
    (4) A worker in training approved under Sec. Sec. 617.22 through 
617.26, or approved by the State agency under State law, is excepted 
from the JSP qualifying requirement while the worker is attending and 
making satisfactory progress in the training. This exception applies 
whether training begins before or after entitlement to basic TRA 
commences, and also applies after training begins for a worker who is 
attending a JSP program. Exceptions to the JSP qualifying requirement 
must be documented in the worker's claim file by the State agency.
    (b) Approved JSPs. A job search program may be approved if:
    (1) The JSP is provided through the JTPA, the public employment 
service, or any other Federal or State funded program, and complies with 
paragraphs (w), (x), and (y) of Sec. 617.3.
    (2) The JSP is sponsored by a company or firm from which the worker 
has been separated, and complies with paragraphs (w), (x), and (y) of 
Sec. 617.3.
    (c) Determination of reasonably available. (1) Reasonably available 
means an existing approved JSP that is located in the worker's normal 
commuting area, as defined in Sec. 617.3, and has sufficient capacity 
to accommodate the worker.
    (2) When the State determines that a JSP is not reasonably available 
for a worker, the requirement is not a condition of qualifying for TRA 
for the weeks involved. When a determination is made with respect to a 
worker, the State agency must document its determination, and the weeks 
involved, in the worker's claim file, prior to making TRA payments to 
the worker.
    (3) The State agency may issue a blanket waiver of the JSP 
qualifying requirement for TRA for groups of workers, where deemed 
appropriate, when it is determined that there is no functioning JSP.
    (4) All determinations that a JSP is not reasonably available should 
extend only for that period of time that a JSP is not reasonably 
available, and the exception for workers in approved training should 
extend until the completion of training. If the State determines that a 
JSP is reasonably available at a later date, then the JSP qualifying 
requirement must be met for entitlement to basic TRA for weeks of 
unemployment beginning with the week in which JSP becomes reasonably 
available.
    (d) JSP allowances. Subsistence and transportation costs shall be 
approved for workers participating in JSPs when deemed appropriate and 
within available State funding levels. Costs incurred may not exceed 
those allowable for training under Sec. Sec. 617.27 and 617.28, if, and 
when, the State refers a worker to a JSP outside the normal commuting 
area.
    (e) Termination of requirement. The job search program requirement 
set out in this section shall not be a condition of entitlement to TRA 
for any week which begins after November 20, 1988.

[53 FR 32351, Aug. 24, 1988, as amended at 54 FR 22277, May 23, 1989; 59 
FR 939, Jan. 6, 1994]



          Subpart G_Administration by Applicable State Agencies



Sec. 617.50  Determinations of entitlement; notices to individuals.

    (a) Determinations of initial applications for TRA or other TAA. The 
State Agency whose State law is the applicable State law under Sec. 
617.16 shall upon the filing of an initial application for TRA or other 
TAA promptly determine the individual's entitlement to such TRA or other 
TAA under this part 617, and may accept for such purposes information 
and findings supplied by another State agency under this part 617.

[[Page 135]]

    (b) Determinations of subsequent applications for TRA or other TAA. 
The State agency shall, upon the filing of an application for payment of 
TRA, or subsistence and transportation under Sec. Sec. 617.27 and 
617.28, with respect to a week, promptly determine whether the 
individual is eligible for a payment of TRA, or subsistence and 
transportation, with respect to such week, and, if eligible, the amount 
of TRA, or subsistence and transportation, for which the individual is 
eligible. In addition, the State agency promptly shall, upon the filing 
of a subsequent application for job search allowances (where the total 
of previous job search allowances paid the individual was less than 
$600), determine whether the individual is eligible for job search 
allowances, and, if eligible, the amount of job search allowances for 
which the individual is eligible.
    (c) Redeterminations. The provisions of the applicable State law 
concerning the right to request, or authority to undertake, 
reconsideration of a determination pertaining to a claim for UI under 
the applicable State law shall apply to determinations pertaining to all 
forms of TAA under this part 617.
    (d) Use of State law. In making determinations or redeterminations 
under this section, or in reviewing such determinations or 
redeterminations under Sec. 617.51, a State agency shall apply the 
regulations in this part 617. As to matters committed by this part 617 
to the applicable State law, a State agency, a hearing officer, or a 
State court shall apply the applicable State law and regulations 
thereunder, including procedural requirements of such State law or 
regulations, except so far as such State law or regulations are 
inconsistent with this part 617 or the purpose of this part 617: 
Provided, that, no provision of State law or regulations on good cause 
for waiver of any time limit, or for late filing of any claim, shall 
apply to any time limitation referred to or specified in this part 617, 
unless such State law or regulation is made applicable by a specific 
provision of this part 617.
    (e) Notices to individual. The State agency shall notify the 
individual in writing of any determination or redetermination as to 
entitlement to TAA. Each determination or redetermination shall inform 
the individual of the reason for the determination or redetermination 
and of the right to reconsideration or appeal in the same manner as 
determinations of entitlement to UI are subject to redetermination or 
appeal under the applicable State law.
    (f) Promptness. Full payment of TAA when due shall be made with the 
greatest promptness that is administratively feasible.
    (g) Procedure. Except where otherwise required by the Act or this 
part 617, the procedures for making and furnishing determinations and 
written notices of determinations to individuals, shall be consistent 
with the Secretary's ``Standard for Claim Determinations--Separation 
Information,'' Employment Security Manual, part V, sections 6010-6015 
(appendix B of this part).

[51 FR 45848, Dec. 22, 1986, as amended at 59 FR 939, 943, Jan. 6, 1994]



Sec. 617.51  Appeals and hearings.

    (a) Applicable State law. A determination or redetermination under 
this part 617 shall be subject to review in the same manner and to the 
same extent as determinations and redeterminations under the applicable 
State law, and only in that manner and to that extent. Proceedings for 
review of a determination or redetermination may be consolidated or 
joined with proceedings for review of a determination or redetermination 
under the State law where convenient or necessary. Procedures as to the 
right of appeal and opportunity for fair hearing shall be consistent 
with sections 303(a) (1) and (3) of the Social Security Act (42 U.S.C. 
503(a) (1) and (3)).
    (b) Appeals promptness. Appeals under paragraph (a) of this section 
shall be decided with a degree of promptness meeting the Secretary's 
``Standard on Appeals Promptness--Unemployment Compensation'' (part 650 
of this chapter). Any provisions of the applicable State law for 
advancement or priority of UI cases on judicial calendars, or otherwise 
intended to provide for prompt payment of UI when due, shall apply to 
proceedings involving entitlement to TAA under this part 617.

[[Page 136]]



Sec. 617.52  Uniform interpretation and application.

    (a) First rule of construction. The Act and the implementing 
regulations in this part 617 shall be construed liberally so as to carry 
out the purpose of the Act.
    (b) Second rule of construction. The Act and the implementing 
regulations in this part 617 shall be construed so as to assure insofar 
as possible the uniform interpretation and application of the Act and 
this part 617 throughout the United States.
    (c) Effectuating purpose and rules of construction. (1) To 
effectuate the purpose of the Act and this part 617 and to assure 
uniform interpretation and application of the Act and this part 617 
throughout the United States, a State agency shall forward, not later 
than 10 days after issuance, to the Department a copy of any judicial or 
administrative decision ruling on an individual's entitlement to TAA 
under this part 617. On request of the Department, a State agency shall 
forward to the Department a copy of any determination or redetermination 
ruling on an individual's entitlement to TAA under this part 617.
    (2) If the Department believes that a determination, 
redetermination, or decision is inconsistent with the Department's 
interpretation of the Act or this part 617, the Department may at any 
time notify the State agency of the Department's view. Thereafter, the 
State agency shall issue a redetermination or appeal if possible, and 
shall not follow such determination, redetermination, or decision as a 
precedent; and, in any subsequent proceedings which involve such 
determination, redetermination, or decision, or wherein such 
determination, redetermination, or decision is cited as precedent or 
otherwise relied upon, the State agency shall inform the claims deputy 
or hearing officer or court of the Department's view and shall make all 
reasonable efforts, including appeal or other proceedings in an 
appropriate forum, to obtain modification, limitation, or overruling of 
the determination, redetermination, or decision.
    (3) If the Department believes that a determination, 
redetermination, or decision is patently and flagrantly violative of the 
Act or this part 617, the Department may at any time notify the State 
agency of the Department's view. If the determination, redetermination, 
or decision in question denies TAA to an individual, the steps outlined 
in paragraph (c)(2) of this section shall be followed by the State 
agency. If the determination, redetermination, or decision in question 
awards TAA to an individual, the benefits are ``due'' within the meaning 
of section 303(a)(1) of the Social Security Act (42 U.S.C. 503(a)(1)), 
and therefore must be paid promptly to the individual. However, the 
State agency, shall take the steps outlined in paragraph (c)(2) of this 
section, and payments to the individual may be temporarily delayed if 
redetermination or appeal action is taken not more than one business day 
following the day on which the first payment otherwise would be issued 
to the individual; and the redetermination action is taken or appeal is 
filed to obtain a reversal of the award of TAA and a ruling consistent 
with the Department's view; and the redetermination action or appeal 
seeks an expedited redetermination or appeal within not more than two 
weeks after the redetermination action is taken or the appeal is filed. 
If redetermination action is not taken or appeal is not filed within the 
above time limit, or a redetermination or decision is not obtained 
within the two-week limit, or any redetermination or decision or order 
is issued which affirms the determination, redetermination, or decision 
awarding TAA or allows it to stand in whole or in part, the benefits 
awarded must be paid promptly to the individual.
    (4) (i) If any determination, redetermination, or decision, referred 
to in paragraph (c)(2) or paragraph (c)(3) of this section, is treated 
as a precedent for any future application for TAA, the Secretary will 
decide whether the Agreement with the State entered into under the Act 
and this part 617 shall be terminated and Sec. 617.59(f) applied.
    (ii) In the case of any determination, redetermination, or decision 
that is not legally warranted under the Act or

[[Page 137]]

this part 617, including any determination, redetermination, or decision 
referred to in paragraph (c)(2) or paragraph (c)(3) of this section, the 
Secretary will decide whether the State shall be required to restore the 
funds of the United States for any sums paid under such a determination, 
redetermination, or decision, and whether, in the absence of such 
restoration, the Agreement with the State shall be terminated and Sec. 
617.59(f) applied and whether other action shall be taken to recover 
such sums for the United States.
    (5) A State agency may request reconsideration of a notice issued 
pursuant to paragraph (c)(2) or paragraph (c)(3) of this section, and 
shall be given an opportunity to present views and arguments if desired. 
Such request shall be made to the Secretary and may include views and 
arguments on the matters to be decided by the Secretary under paragraph 
(c)(4) of this section.
    (6) Concurrence of the Department in a determination, 
redetermination, or decision shall not be presumed from the absence of a 
notice issued pursuant to this section.

(Approved by the Office of Management and Budget under control number 
1205-0222)



Sec. 617.53  Subpoenas.

    A State agency may issue subpoenas for attendance of witnesses and 
production of records on the same terms and conditions as under the 
State law. Compliance may be enforced on the same terms and conditions 
as under the State law, or, if a State court declines to enforce a 
subpoena issued under this section, the State agency may petition for an 
order requiring compliance with such subpoena to the United States 
District Court within the jurisdiction of which the relevant proceeding 
under this part 617 is conducted.



Sec. 617.54  State agency rulemaking.

    A State agency may establish supplemental procedures not 
inconsistent with the Act or this part 617 or procedures prescribed by 
the Department to further effective administration of this part 617. The 
exact text of such supplemental procedure or procedures, certified as 
accurate by a responsible official, employee, or counsel of the State 
agency, shall be submitted to the Department, on a form supplied by the 
Department. No supplemental procedure shall be effective unless and 
until approved by the Department. Approval may be granted on a temporary 
basis, not to exceed 90 days, in cases of administrative necessity. On 
reasonable notice to a State agency, approval of a supplemental 
procedure may be withdrawn at any time. If public notice and opportunity 
for hearing would be required under a State law for adoption of a 
similar or analogous procedure involving UI, such public notice and 
opportunity for hearing shall be afforded by the State agency as to the 
supplemental procedure.

(Approved by the Office of Management and Budget under control number 
1205-0222)



Sec. 617.55  Overpayments; penalties for fraud.

    (a) Determination and repayment. (1) If a State agency or a court of 
competent jurisdiction determines that any person or individual has 
received any payment under this part 617 to which the person or 
individual was not entitled, including a payment referred to in 
paragraph (b) or paragraph (c) of this section, such person or 
individual shall be liable to repay such amount to the State agency, and 
the State agency shall recover any such overpayment in accordance with 
the provisions of this part 617; except that the State agency may waive 
the recovery of any such overpayment if the State agency determines, in 
accordance with the guidelines prescribed in paragraph (a)(2) of this 
section, that:
    (i) The payment was made without fault on the part of such person or 
individual; and
    (ii) Requiring such repayment would be contrary to equity and good 
conscience.
    (2)(i)(A) In determining whether fault exists for purposes of 
paragraph (a)(1)(i) of this section, the following factors shall be 
considered:
    (1) Whether a material statement or representation was made by the 
person or individual in connection with the application for TAA that 
resulted in the overpayment, and whether the person or individual knew 
or should have

[[Page 138]]

known that the statement or representation was inaccurate.
    (2) Whether the person or individual failed or caused another to 
fail to disclose a material fact, in connection with an application for 
TAA that resulted in the overpayment, and whether the person or 
individual knew or should have known that the fact was material.
    (3) Whether the person or individual knew or could have been 
expected to know, that the person or individual was not entitled to the 
TAA payment.
    (4) Whether, for any other reason, the overpayment resulted directly 
or indirectly, and partially or totally, from any act or omission of the 
person or individual or of which the person or individual had knowledge, 
and which was erroneous or inaccurate or otherwise wrong.
    (5) Whether there has been a determination of fraud under paragraph 
(b) of this section or section 243 of the Act.
    (B) An affirmative finding on any one of the factors in paragraphs 
(a)(2)(i)(A) of this section precludes waiver of overpayment recovery.
    (ii)(A) In determining whether equity and good conscience exists for 
purposes of paragraph (a)(1)(ii) of this section, the following factors 
shall be considered:
    (1) Whether the overpayment was the result of a decision on appeal, 
whether the State agency had given notice to the person or individual 
that the case has been appealed and that the person or individual may be 
required to repay the overpayment in the event of a reversal on appeal, 
and whether recovery of the overpayment will not cause extraordinary and 
lasting financial hardship to the person or individual.
    (2) Whether recovery of the overpayment will not cause extraordinary 
financial hardship to the person or individual, and there has been no 
affirmative finding under paragraph (a)(2)(ii)(A) of this section with 
respect to such person or individual and such overpayment.
    (B) An affirmative finding on either of the foregoing factors in 
paragraphs (a)(2)(ii)(A) of this section precludes waiver of overpayment 
recovery.
    (C)(1) For the purpose of paragraph (a)(2)(ii) of this section, an 
extraordinary financial hardship shall exist if recovery of the 
overpayment would result directly in the person's or individual's loss 
of or inability to obtain minimal necessities of food, medicine, and 
shelter for a substantial period of time; and an extraordinary and 
lasting financial hardship shall be extraordinary as described above and 
may be expected to endure for the foreseeable future.
    (2) In applying this test in the case of attempted recovery by 
repayment, a substantial period of time shall be 30 days, and the 
foreseeable future shall be at least three months. In applying this test 
in the case of proposed recoupment from other benefits, a substantial 
period of time and the foreseeable future shall be the longest potential 
period of benefit entitlement as seen at the time of the request for a 
waiver determination. In making these determinations, the State agency 
shall take into account all potential income of the person or individual 
and the person's or individual's firm, organization, or family and all 
cash resources available or potentially available to the person or 
individual and the person's or individual's firm, organization, or 
family in the time period being considered.
    (3) Determinations granting or denying waivers of overpayments shall 
be made only on request for a waiver determination. Such request shall 
be made on a form which shall be furnished to the person or individual 
by the State agency. Notices of determination of overpayments shall 
include an accurate description of the waiver provisions of paragraph 
(a) of this section, if the State agency has elected to allow waivers of 
TAA overpayments.
    (4) Each State shall have the option to establish a policy as to 
whether the waiver provisions of this section shall be applied to TAA 
overpayments. A State's decision on its policy shall not be controlled 
by whether it waives UI overpayments, but the State's decision shall be 
published for the information of the public and the Department.
    (5)(i) Unless an overpayment is otherwise recovered, or is waived 
under paragraph (a) of this section, the State agency shall recover the 
overpayment by deduction from any sums payable to such person or 
individual under:

[[Page 139]]

    (A) This part 617;
    (B) Any Federal unemployment compensation law administered by the 
State agency; or
    (C) Any other Federal law administered by the State agency which 
provides for the payment of unemployment assistance or an allowance with 
respect to unemployment.
    (ii) In addition, a State agency may recover the overpayment from 
unemployment insurance payable to such person or individual under the 
State law.
    (b) Fraud. If a State agency or a court of competent jurisdiction 
finds that any person or individual:
    (1) Knowingly has made, or caused another to make, a false statement 
or representation of a material fact; or
    (2) Knowingly has failed, or caused another to fail, to disclose a 
material fact; and as a result of such false statement or 
representation, or of such nondisclosure, such individual has received 
any payment under this part 617 to which the person or individual was 
not entitled, such person or individual shall, in addition to any other 
penalty provided by law, be ineligible for any further payments under 
this part 617.
    (c) Training, job search and relocation allowances. (1) If an 
individual fails, with good cause, to complete training, a job search, 
or a relocation, any payment or portion of a payment made under this 
part 617 to such individual or any person that is not properly and 
necessarily expended in attempting to complete such training, job 
search, or relocation, shall constitute an overpayment.
    (2) If an individual fails, without good cause, to complete 
training, a job search, or a relocation, any payment made under this 
part 617 to such individual or any person shall constitute an 
overpayment.
    (3) Such overpayment shall be recovered or waived as provided in 
paragraph (a) of this section.
    (d) Final determination. Except for overpayments determined by a 
court of competent jurisdiction, no repayment may be required, and no 
deduction may be made, under this section until a determination under 
paragraph (a) of this section by the State agency has been made, notice 
of the determination and an opportunity for a fair hearing thereon has 
been given to the person or individual concerned, and the determination 
has become final.
    (e) Deposit. Any amount recovered by a State agency under this 
section shall be deposited into the Federal fund or account from which 
payment was made.
    (f) Procedural requirements. (1) The provisions of paragraphs (c), 
(e), and (g) of Sec. 617.50 shall apply to determinations and 
redeterminations made pursuant to this section.
    (2) The provisions of Sec. 617.51 shall apply to determinations and 
redeterminations made pursuant to this section.
    (g) Fraud detection and prevention. State procedures for the 
detection and prevention of fraudulent overpayments of TAA shall be, as 
a minimum, commensurate with the procedures adopted by the State with 
respect to State unemployment compensation and consistent with the 
Secretary's ``Standard for Fraud and Overpayment Detection,'' Employment 
Security Manual, Part V, sections 7510-7515 (Appendix C of this part).
    (h) Debts due the United States or Others. (1) Notwithstanding any 
provision of this part 617, TAA payable to a person or an individual 
under this part 617 shall be applied by the State agency for the 
recovery by offset of any debt due the United States from the person or 
individual.
    (2) TAA shall not be applied or used by the State agency in any 
manner for the payment of any debt of any person or individual to any 
State or any other entity or person, except that TRA payable to an 
individual shall be payable to someone other than the individual if 
required by State law and Federal law to satisfy the individual's 
obligation for child support or alimony.
    (i) Definition of person. For purposes of this section, a person 
includes any employer or other entity or organization as well as the 
officers and officials thereof who may bear individual responsibility.

[59 FR 939, Jan. 6, 1994, as amended at 59 FR 943, Jan. 6, 1994]

[[Page 140]]



Sec. 617.56  Inviolate rights to TAA.

    Except as specifically provided in this part 617, the rights of 
individuals to TAA shall be protected in the same manner and to the same 
extent as the rights of persons to UI are protected under the applicable 
State law. Such measures shall include protection of applicants for TAA 
from waiver, release, assignment, pledge, encumbrance, levy, execution, 
attachment, and garnishment of their rights to TAA, except as provided 
in Sec. 617.55. In the same manner and to the same extent, individuals 
shall be protected from discrimination and obstruction in regard to 
seeking, applying for, and receiving any right to TAA.



Sec. 617.57  Recordkeeping; disclosure of information.

    (a) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the Act as the Secretary requires 
and will make all such records available for inspection, examination and 
audit by such Federal officials as the Secretary may designate or as may 
be required by law. Such recordkeeping will be adequate to support the 
reporting of TAA activity on reporting form ETA 563 approved under OMB 
control number 1205-0016.
    (b) Disclosure of information. Information in records maintained by 
a State agency in administering the Act shall be kept confidential, and 
information in such records may be disclosed only in the same manner and 
to the same extent as information with respect to UI and the entitlement 
of individuals thereto may be disclosed under the applicable State law. 
Such information shall not, however, be disclosed to an employer or any 
other person except to the extent necessary to obtain information from 
the employer or other person for the purposes of this part 617. This 
provision on the confidentiality of information maintained in the 
administration of the Act shall not apply, however, to the Department or 
for the purposes of Sec. 617.55 or paragraph (a) of this section, or in 
the case of information, reports and studies required pursuant to Sec. 
617.61, or where the result would be inconsistent with the Freedom of 
Information Act (5 U.S.C. 552), the Privacy Act of 1974 (5 U.S.C. 552a), 
or regulations of the Department promulgated thereunder (see 29 CFR 
parts 70 and 70a).



Sec. 617.58  Unemployment insurance.

    Unemployment insurance payable to an adversely affected worker shall 
not be denied or reduced for any week by reason of any right to a 
payment of TAA under the Act and this part 617.



Sec. 617.59  Agreements with State agencies.

    (a) Authority. Before performing any function or exercising any 
jurisdiction under the Act and this part 617, a State or State agency 
(as defined in Sec. 617.3(ii)) shall execute an Agreement with the 
Secretary meeting the requirements of the Act.
    (b) Execution. An Agreement under paragraph (a) of this section 
shall be signed on behalf of a State or State agency by an authorized 
official of the State or such State agency, and the signature shall be 
dated. The authority of the State or State agency official shall be 
certified by the Attorney General of the State or counsel for the State 
agency, unless the Agreement is signed by the Governor of the State. An 
agreement will be executed on behalf of the United States by the 
Secretary.
    (c) Public access to Agreements. The State agency will make 
available to any individual or organization an accurate copy of the 
Agreement with the Agency for inspection and copying. Copies of an 
Agreement may be furnished on request to any individual or organization 
upon payment of the same charges, if any, as apply to the furnishing of 
copies of other records of the State agency.
    (d) Amended Agreement. A State or State agency shall execute an 
amended Agreement with the Secretary prior to administering any 
amendments to the TAA provisions of the Trade Act of 1974.
    (e) Agent of United States. In making determinations, 
redeterminations, and in connection with proceedings for review thereof, 
a State or State agency which has executed an Agreement as provided in 
this section shall be an agent of the United States and shall

[[Page 141]]

carry out fully the purposes of the Act and this part 617.
    (f) Breach. If the Secretary finds that a State or State agency has 
not fulfilled its commitments under its Agreement under this section, 
section 3302(c)(3) of the Internal Revenue Code of 1986 shall apply. A 
State or State agency shall receive reasonable notice and opportunity 
for hearing before a finding is made under section 3302(c)(3) whether 
there has been a failure to fulfill the commitments under the Agreement.
    (g) Secretary's review of State agency compliance. The appropriate 
Regional Administrator shall be initially responsible for the periodic 
monitoring and reviewing of State and State agency compliance with the 
Agreement entered into under this section.
    (h) Program coordination. State agencies providing employment 
services, training and supplemental assistance under Subpart C of this 
part shall, in accordance with their Agreements under this section, 
coordinate such services and payments with programs and services 
provided by State Service Delivery Areas, Private Industry Councils, and 
substate grantees under the Job Training Partnership Act and with the 
State agency administering the State law.
    (i) Administration absent State Agreement. In any State in which no 
Agreement under this section is in force, the Secretary shall administer 
the Act and this part 617 and pay TAA hereunder through appropriate 
arrangements made by the Department, and for this purpose the Secretary 
or the Department shall be substituted for the State or cooperating 
State agency wherever appropriate in this part 617. Such arrangements 
shall include the requirement that TAA be administered in accordance 
with this part 617, and the provisions of the applicable State law 
except to the extent that such State law is inconsistent with any 
provision of this part 617 or section 303 of the Social Security Act (42 
U.S.C. 503) or section 3304(a) of the Internal Revenue Code of 1986 (26 
U.S.C. 3304(a)), and shall also include provision for a fair hearing for 
any individual whose application for TAA is denied. A final 
determination under paragraph (i) of this section as to entitlement to 
TAA shall be subject to review by the courts in the same manner and to 
the same extent as is provided by section 205(g) of the Social Security 
Act (42 U.S.C. 405(g)).

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32351, Aug. 24, 1988; 
59 FR 941, Jan. 6, 1994]



Sec. 617.60  Administration requirements. [Reserved]



Sec. 617.61  Information, reports, and studies.

    A State agency shall furnish to the Secretary such information and 
reports and conduct such studies as the Secretary determines are 
necessary or appropriate for carrying out the purposes of the Act and 
this part 617.



Sec. 617.62  Transitional procedures.

    The procedures for administering the Trade Act of 1974 before and 
after the amendments made by title XXV of the Omnibus Budget 
Reconciliation Act of 1981 (Pub. L. 97-35) are as follows:
    (a) TRA. The provisions contained in subpart B of this part 617 
shall apply with respect to the qualifying requirements for TRA for 
adversely affected workers who are separated on or after October 1, 
1981, and were not entitled to TRA for any week of unemployment 
beginning before October 1, 1981. In addition, such provisions shall 
apply to TRA payable for weeks of unemploymant beginning after September 
30, 1981, to adversely affected workers separated before October 1, 
1981. Any adversely affected worker entitled to TRA for any week of 
unemployment beginning before October 1, 1981, shall be entitled to TRA 
as follows:
    (1) Weeks before October 1, 1981. For weeks of unemployment 
beginning before October 1, 1981, TRA eligibility shall be determined 
under the provisions of the law and regulations in effect before the 
amendments made by title XXV of the Omnibus Budget Reconciliation Act of 
1981 (Pub. L. 97-35).
    (2) Weeks after September 30, 1981. (i) Basic weeks (UI exhaustion). 
For any week of unemployment beginning after September 30, 1981, TRA 
eligibility for an individual who has exhausted all rights to UI prior 
to such week shall be

[[Page 142]]

determined under subpart B of this part 617, except that the maximum 
amount of basic TRA payable to the individual for any such week of 
unemployment shall be an amount equal to the product of the amount of 
TRA payable to the individual for a week of total unemployment (as 
determined under Sec. 617.13(a)) multiplied by a factor determined by 
subtracting from fifty-two the sum of:
    (A) The number of weeks preceding the first week which begins after 
September 30, 1981, including all weeks in the individual's first 
benefit period, and which are within the period covered by the same 
certification as such week of unemployment, for which the individual was 
entitled to a payment of TRA or UI (or would have been entitled to a 
payment of TRA or UI if the individual had applied therefor); plus
    (B) The number of weeks preceding such first week that are 
deductible under section 232(d) of the Trade Act of 1974 in effect 
before the amendments made by the Omnibus Budget Reconciliation Act of 
1981.
    (C) The amount of TRA payable to an individual under this paragraph 
(a)(2)(i) shall be subject to adjustment on a week-to-week basis as may 
be required by Sec. 617.13(b).
    (ii) Basic weeks UI entitlement. For any week of unemployment 
beginning after September 30, 1981, TRA eligibility for an individual 
who still has entitlement to UI shall be discontinued until the 
individual exhausts all rights to UI as provided in Sec. 6.17.11(a)(5). 
After exhaustion of all rights to UI, payment of TRA shall be determined 
under subpart B of this part 617, except that the maximum amount of 
basic TRA payable to the individual for ensuing weeks of unemployment 
shall be an amount equal to the remainder of:
    (A) The maximum amount of basic TRA as computed under paragraph 
(a)(2)(i) of this section; minus
    (B) The total sum of UI to which the individual was entitled (or 
would have been entitled if the individual had applied therefor) for 
weeks beginning after September 30, 1981.
    (iii) Additional weeks. With respect to any week of unemployment 
beginning after September 30, 1981, for an individual who is in training 
approved under section 236 of the Trade Act of 1974, and who was 
receiving TRA for basic or additional weeks beginning before October 1, 
1981, the weekly amount of TRA for any additional weeks beginning after 
September 30, 1981, shall be determined under subpart B of this part 
617.
    (3) Transitional eligibility period. (i) Basic weeks. Any individual 
who was eligible for a basic TRA payment for any week beginning before 
October 1, 1981, shall not be eligible for a basic TRA payment for any 
week beginning after September 30, 1981, and which begins more than 52 
weeks after the individual has exhausted all rights to regular 
compensation in the first benefit period (as provided in Sec. 
617.15(a)).
    (ii) Additional weeks. Any individual who was eligible for a TRA 
payment for an additional week beginning before October 1, 1981, shall 
not be eligible for a TRA payment for any additional week beginning 
after September 30, 1981, unless such additional week begins wtthin:
    (A) 26 weeks after the last week of the individual's entitlement to 
basic TRA, or
    (B) 78 weeks after the individual exhausted regular compensation in 
the first benefit period, whichever occurs first (as provided in Sec. 
617.15).
    (b) Training, other reemployment services, and allowances. (1) 
Applications for training filed before October 1, 1981, concerning the 
approval of such training after September 30, 1981, shall be determined 
under subpart C of this part 617.
    (2) Applications for transportation and subsistence payments while 
in training, and job search and relocation allowances filed after 
September 30, 1981, shall be determined under the applicable subpart C, 
D, or E of this part 617.
    (3) Individuals who have had self-financed training approved prior 
to October 1, 1981, shall not be reimbursed for training and related 
expenses incurred while in such training. However, such individuals may 
have their eligibility for approved training considered under the 
criteria outlined in the amended section 236 of the Act and in

[[Page 143]]

Sec. 617.22, and, if approved, shall be entitled to have post-approval 
training costs paid.
    (c) Fraud and recovery of overpayments. The fraud and overpayment 
recovery provisions of this subpart G shall take effect on August 13, 
1981, and shall apply to all overpayments outstanding on that date or 
determined on or after that date.
    (d) Required amendments to State law. The provisions of section 
2514(a)(2)(D) of the Omnibus Budget Reconciliation Act of 1981 (Pub. L. 
97-35) (relating to amendment of State laws) shall apply to State laws 
for the purposes of certifications under section 3304(c) of the Internal 
Revenue Code of 1984 on October 31 of any taxable year after 1981; 
except that, in any State in which the legislature of that State--
    (1) Does not meet in a session which begins after August 13, 1981, 
and before September 1, 1982, and
    (2) If in session on August 13, 1981, and does not remain in session 
for at least 25 calendar days thereafter, the date of ``1981'' in this 
paragraph (d) shall be deemed to be ``1982.''

[51 FR 45848, Dec. 22, 1986, as amended at 53 FR 32352, Aug. 24, 1988]



Sec. 617.63  Savings clause.

    The amendments to the Act made by title XXV of the Omnibus Budget 
Reconciliation Act of 1981 (Pub. L. 97-35) shall not abate or otherwise 
affect entitlement to TAA under the Trade Act of 1974 or any appeal 
which was pending on October 1, 1981, or on the date of enactment of any 
such amendment, as applicable, or prevent any appeal from any 
determination thereunder which did not become final prior to such 
applicable date if appeal or petition is filed within the time allowed 
for appeal or petition.



Sec. 617.64  Termination of TAA program benefits.

    The following rules are applicable to the termination of TAA 
benefits under the Act:
    (a) No application for TRA, or transportation or subsistence payment 
while in training approved under subpart C of this part 617, shall be 
approved, and no payment of TRA or payment for transportation or 
subsistence occurring on or before the termination date shall be made 
after the termination date specified in the Act, unless the claim for 
TRA or an invoice for transportation and subsistence is presented to the 
State agency and a final determination is made on the amount payable on 
or before the termination date in the Act.
    (b) No payment of job search or relocation allowances shall be made 
after the termination date specified in the Act, unless an application 
for such allowances was approved, such job search or relocation was 
completed, and a final determination made on the amount payable for such 
benefits by the State agency on or before the termination date in the 
Act.
    (c) No training under subpart C of this part shall be approved 
unless a determination regarding the approval of such training was made 
on or before the termination date in the Act, and such training 
commenced on or before such termination date. Consistent with the 
requirements of section 236(a)(1) of the Act, and the termination 
provisions of paragraph (c) of this section, a final determination must 
be made on the invoice for the training costs by the State agency on or 
before the termination date specified in the Act to cover tuition 
related expenses. Determinations on tuition bills shall be limited to 
the training term, quarter, semester or other period beginning on or 
before the termination date in the Act. The training period should be in 
accord with normal billing practices of the training provider and/or 
State agency approval practices.

[59 FR 941, Jan. 6, 1994]



Sec. 617.65  Transition procedures for amendments in sections 2671 and 
2672 of Pub. L. 98-369 (Deficit Reduction Act of 1984).

    The procedures for administering the Trade Act of 1974 as amended by 
the Deficit Reduction Act of 1984 are as follows:
    (a) TRA. (1) The provisions in subpart B of this part 617 shall 
apply to workers who would lose additional weeks of TRA payments because 
of delays in approving applications for training. Workers who filed 
timely, bona fide applications for training shall be eligible to receive 
additional weeks of TRA

[[Page 144]]

payments beginning the first week of training when their applications 
for training are approved on or after July 18, 1984, and the first week 
of such training begins later than the first week which follows the last 
week of entitlement to basic TRA.
    (2) Workers whose applications for training were approved prior to 
July 18, 1984, are covered under the provisions of the Trade Act of 1974 
as in effect prior to July 18, 1984, and are not entitled to additional 
weeks of TRA by reason of the amendment in section 2671 of the Deficit 
Reduction Act of 1984 or Sec. 617.15(b) of this part.
    (b) Job Search Allowances. (1) The provisions in subpart D of this 
part 617 shall apply to timely applications for job search allowances 
that are approved on or after July 18, 1984.
    (2) Workers whose applications for job search allowances that were 
filed timely but were approved before July 18, 1984, in the aggregate 
authorized amount of $600, are covered under the provisions of the Trade 
Act of 1974 in effect prior to July 18, 1984, and are not entitled to 
receive the increase in the allowance level provided in section 2672(a) 
of the Deficit Reduction Act of 1984 and Sec. 617.34(b) of this part.
    (c) Relocation allowances. (1) The provisions in subpart E of this 
part 617 shall apply to timely applications for relocation allowances 
that are approved on or after July 18, 1984.
    (2) Workers whose applications for relocations allowances were filed 
timely but were approved before July 18, 1984, are covered under the 
provisions of the Trade Act of 1974 in effect prior to July 18, 1984, 
and are not entitled to receive the increase in the lump sum allowance 
level provided in section 2672(b) of the Deficit Reduction Act of 1984 
and Sec. 617.45(a)(3) of this part.

[51 FR 45870, Dec. 22, 1986]



Sec. 617.66  Transition procedures for amendments in sections 13002 

through 13009 of Pub. L. 99-272 (the Consolidated Omnibus Budget 
Reconciliation Act of 
          1985).

    The procedures for administering the Trade Act of 1974 before and 
after the amendments made by the Pub. L. 99-272 are as follows:
    (a) Duration of TRA. The provisions contained in Sec. 617.15 
expanding the eligibility period for payment of basic TRA benefits from 
52 weeks to 104 weeks shall apply only to those claimants whose 
eligibility periods begin on or after April 7, 1986, or who have a 
previously established 52-week TRA eligibility period that ends on or 
after April 7, 1986. Workers with 52-week eligibility periods that end 
before April 7, 1986, will not have their eligibility periods extended 
to 104 weeks.
    (b) TRA payments--(1) Retroactive TRA payments. Retroactive claims 
of eligible workers may be approved for weeks of unemployment beginning 
with the first week after the week which includes December 18, 1985. 
Claims for weeks beginning before April 7, 1986 (or, if later, before 
claimants are notified of their potential entitlement and have filed 
claims for retroactive benefits) are not subject to the application of 
the Extended Benefits (EB) work test, nor to the State timely filing 
requirement. Claimants shall be subject to those requirements for weeks 
of unemployment beginning after the date eligible workers are notified 
of such requirements and have filed claims for such benefits.
    (2) Employer-authorized leave, disability leave and union service. 
The change to Sec. 617.11(a)(3) for crediting weeks of specified leave 
to qualify for TRA will apply only to initial claims for basic TRA filed 
with the State agency by eligible workers on or after April 7, 1986.
    (c) Job search program. The job search program requirement applies 
to workers certified under petitions for trade adjustment assistance 
filed with the Department on or after April 7, 1986.
    (d) Training and other amendments. Other amendments in Pub. L. 99-
272 are effective on April 7, 1986, and apply to applications for TAA 
benefits approved on or after April 7, 1986.
    (e) Application of Gramm-Rudman. TRA payments to workers made under 
part 1 of chapter 2 of title II of the Trade Act of 1974 and this part 
shall be reduced by a percentage equal to the non-defense sequester 
percentage applied in the Sequestration Report (submitted under the 
Balanced Budget and Emergency Deficit Control Act of 1985

[[Page 145]]

and dated January 21, 1986) of the Comptroller General of the United 
States for Fiscal Year 1986, for the period from March 1, 1986 to 
October 1, 1986.

[53 FR 32352, Aug. 24, 1988]



Sec. 617.67  Transition guidelines for the 1988 Amendments.

    The provisions of part 3 of subtitle D of title I of the Omnibus 
Trade and Competitiveness Act of 1988 (the ``OTCA''), Public Law 100-
418, approved on August 23, 1988, made material changes in the TAA 
Program for workers that are reflected in the amended regulations 
published with this new section on transition guidelines for the 1988 
Amendments. States and cooperating State agencies shall be guided by the 
following paragraphs of this section in the transition to the TAA 
Program as modified by the 1988 Amendments and reflected in the 
preceding provisions of this part 617, as well as in the interim 
operating instructions issued by the Department which are superseded by 
these regulations. The operating instructions in GAL 15-90, and the 
Changes thereto, shall continue in effect as guidance on the proper 
application of the 1988 Amendments except as modified in these final 
regulations. (GAL 15-90 is available from the Office of Trade Adjustment 
Assistance, U.S. Department of Labor, 200 Constitution Ave., NW., room 
C-4318, Washington, DC 20210.)
    (a) Oil and gas workers--prospective. Workers in firms or 
appropriate subdivisions of firms engaged in exploration or drilling for 
oil or natural gas are newly covered under the TAA Program by an 
amendment to section 222 of the Trade Act of 1974. This is a permanent 
change in the Act having prospective effect, and became effective on 
August 23, 1988. Oil and gas workers covered by a certification issued 
pursuant to section 223 of the Act and the regulations at 29 CFR part 90 
shall be entitled to basic and additional TRA and other TAA Program 
benefits on precisely the same terms and conditions as apply to other 
workers covered by other certifications and which are specifically set 
forth in this part 617.
    (b) Oil and gas workers--retroactive. Oil and gas workers referred 
to in paragraph (a) of this section, who were separated from adversely 
affected employment after September 30, 1985, are covered retroactively 
under section 1421(a)(1)(B) of the OTCA, if they are covered by a 
certification issued pursuant to section 223 of the Act which is in 
response to a petition filed in the Office of Trade Adjustment 
Assistance on or before November 18, 1988. Administration of TAA Program 
benefits to these workers shall be on precisely the same terms and 
conditions as apply to other workers covered by other certifications, 
except that the limitations of the impact date provision of section 
223(b) and the 60-day preclusion in section 231(a) may not be applied to 
these workers.
    (c) Benefit information to workers. (1) An amendment to section 225 
of the Act requires individualized and published notices to workers 
covered by certifications issued pursuant to section 223 of the Act. 
This amendment became effective as a requirement on September 22, 1988, 
and is applicable to all certifications issued on and after that date. 
Individualized notices and published notices shall contain the 
information specifically set forth in this part 617.
    (2) Section 239(f) of the Act requires cooperating State agencies to 
furnish four discrete items of information and advice to individuals 
about TAA Program benefits, commencing with such advice and information 
to every individual who applies for unemployment insurance under each 
State's unemployment compensation law. See Sec. 617.4(e). This 
amendment became effective on August 23, 1988. Information and advice 
required by section 239(f) shall be provided in accordance with this 
part 617.
    (d) Training and eligibility requirements for TRA. Effective on 
November 21, 1988, in general, enrollment and participation in, or 
completion of, a training program approved under subpart C is required 
as a condition of entitlement to basic TRA. Amendments to sections 
231(a)(5), 231(b), and 231(c) of the Act incorporate this new 
requirement, replacing the job search program requirement which remains 
in effect

[[Page 146]]

through November 20, 1988. Continuation of the job search program 
requirement through November 20, 1988, and installation of the training 
program requirement on and after November 21, 1988, is required of all 
applicants for basic TRA.
    (e) Eligibility period for basic TRA. (1) Effective on August 23, 
1988, and with respect to all decisions (i.e., all determinations, 
redeterminations, and decisions on appeals) issued on or after that 
date, the eligibility period for basic TRA is changed from the prior 
law. Prior to the OTCA amendments, section 233(a)(2) provided that the 
eligibility period for an individual was a fixed 104-week period that 
immediately followed the week with respect to which the individual first 
exhausted all rights to regular benefits after the individual's first 
qualifying separation. Under section 233(a)(2) the new eligibility 
period is movable, and is the 104-week period that immediately follows 
the week in which the worker's most recent total qualifying separation 
occurs under the same, single certification. Under the effective date 
provisions of the OTCA, section 233(a)(2) applies to all decisions 
(i.e., determinations, redeterminations, and decisions on appeals) 
issued on and after August 23, 1988. Further, the law to be applied in 
making any such decision is the law as in effect on the date such a 
decision is made. These interpretative rules apply in all cases, 
regardless of whether the total qualifying separation occurred before, 
on, or after August 23, 1988, except as noted in paragraph (e)(3) of 
this section.
    (2) The major significance of the change in section 233(a)(2) is 
that, effective for all decisions (i.e., determinations, 
redeterminations, and decisions on appeals) issued on or after August 
23, 1988, it applies to the ``most recent'' total qualifying separation. 
This means that, after the first qualifying separation before August 23, 
1988, or the first total qualifying separation on and after August 23, 
1988, with each subsequent total qualifying separation of an individual 
under the same certification the individual's eligibility period must be 
redetermined as the 104-week period that immediately follows the week in 
which such subsequent separation occurred.
    (3) Section 1430(g) of the OTCA requires that the new eligibility 
period not be applied with respect to any total qualifying separation 
occurring before August 23, 1988, if as a result of applying section 
233(a)(2) the individual would have an eligibility period with an 
earlier expiration date than the expiration date of the eligibility 
period established under the prior law and based on a first qualifying 
separation which occurred under the same certification before August 23, 
1988. Therefore, for decisions (i.e., determinations, redeterminations, 
and decisions on appeals) issued on or after August 23, 1988, for a 
worker who had a first qualifying separation under the same 
certification before August 23, 1988, it must be determined what the 
individual's eligibility period is based upon the prior law, and, if the 
individual also had a subsequent total qualifying separation, what the 
individual's eligibility period is based on the amended law. Only if the 
subsequent total qualifying separation occurred before August 23, 1988, 
and the expiration date of the new eligibility period ends on the same 
date or a later date than the expiration date of the old eligibility 
period may the new eligibility period be applied to the individual, and 
in that event it must be applied; if the new eligibility period would 
end on a date earlier than the ending date of the eligibility period 
based on the worker's first qualifying separation, section 1430(g) 
operates to preclude the application of amended section 233(a)(2).
    (4) Computation of the weekly and maximum amounts of basic TRA do 
not change under the 1988 Amendments in the OTCA. They must continue to 
be based upon the first benefit period which is related to the worker's 
first total or partial separation under the same certification 
regardless of whether such first separation occurs before, on, or after 
August 23, 1988. Upon the occurrence of a second or subsequent 
separation under the same certification which is a total qualifying 
separation under this part 617, the individual's eligibility period will 
be 104 weeks after the week of such second or

[[Page 147]]

subsequent (total qualifying) separation, but no change will be made in 
the weekly or maximum amounts of basic TRA as computed in relation to 
the first separation. Therefore, for any decision (i.e., determination, 
redetermination, or decision on appeal) issued on or after August 23, 
1988, whenever an individual files a new TRA claim it will be necessary 
to determine whether the individual's most recent separation was a total 
qualifying separation, and, if so, whether the individual had a prior 
partial or total separation within the certification period of the same 
certification which was a first qualifying separation. If such most 
recent (total qualifying) separation occurred before August 23, 1988, 
and was not the individual's first qualifying separation, then:
    (i) The eligibility period will be the 104 weeks beginning with the 
week following the week in which the most recent total qualifying 
separation occurred or 104 weeks after the first exhaustion of regular 
UI following the first qualifying separation, whichever is longer, and
    (ii) The individual's weekly amount of basic TRA, as computed under 
Sec. 617.13, and the individual's maximum amount of basic TRA, as 
computed under Sec. 617.14, are established or remain fixed as 
determined with respect to the individual's first benefit period 
following the first separation which is within the certification period 
of the certification covering the individual.
    (f) Eligibility period for additional TRA. One technical and one 
conforming change are made by the OTCA in section 233(a)(3) of the Act, 
but have no effect on the 26-week eligibility period for additional TRA 
as the statute has been interpreted and applied in the past. Therefore, 
the 26-week eligibility period begins with the first week of training if 
the training begins after exhaustion of basic TRA. Further, if the 
training begins before approval is obtained under this part 617, the 26-
week eligibility period begins with the week in which the determination 
of approval is issued, if there is any scheduled training session in 
that week after the date of the determination.
    (g) Eligibility for TRA during breaks in training. (1) Paragraph (f) 
of section 233 of the Act, added by the OTCA, provides for the payment, 
under specified conditions, of both basic and additional TRA during 
scheduled breaks in a training program, provided the conditions for such 
payments are met as expressed in this part 617. By making this provision 
applicable to basic TRA as well as additional TRA, paragraph (f) of 
section 233 of the Act changes the prior law for both. Previously, basic 
TRA was payable during training breaks, but additional TRA was payable 
solely with respect to weeks of training. Under new section 233(f), both 
basic and additional TRA are payable during training breaks, but only if 
the break does not exceed 14 days. Now, as under the prior law, weeks 
when TRA is not payable will still count against the eligibility periods 
for both basic and additional TRA, and in the case of additional TRA it 
will also count against the number of weeks payable.
    (2) Paragraph (f) of section 233 of the Act is effective with regard 
to all decisions (i.e., all determinations, redeterminations, and 
decisions on appeals) made on or after August 23, 1988, regardless of 
when the training was approved under section 236 of the Trade Act, or 
whether the training was approved or is approvable under section 236 as 
amended by the 1988 Amendments, or when the break in training began or 
ended. In making any decision involving paragraph (f) of section 233 of 
the Act, the law to be applied is the law as in effect on the date the 
decision is made.
    (h) Retroactive eligibility for TRA. (1) Effective on August 23, 
1988, section 1425(b) of the OTCA provides for an open-ended waiver of 
the time limit in section 233(a)(2) on the eligibility period for basic 
TRA, and the 210-day time limit in section 233(b) on filing a bona fide 
application for training in order to qualify for additional TRA. This 
waiver provision applies solely to workers who experienced a total 
qualifying separation in the period which began on August 13, 1981 and 
ended on April 7, 1986. Other conditions must be met that are specified 
in section 1425(b) and in this part 617.
    (2) Altogether, nine conditions must be met for workers to obtain 
TRA payments under this special provision.

[[Page 148]]

(See Sec. 617.11(a)(3).) Further, this special provision applies solely 
to weeks which begin after August 23, 1988; no retroactive payments may 
be made under this special provision. Finally, only the two specific 
time limitations are waived, and all other requirements of the prior and 
amended law apply, including the first separation rule (relating to 
computation of the weekly and maximum amounts of basic TRA payable), the 
26-week eligibility period for additional TRA, and the break provision 
of section 233(f).
    (i) Training for adversely affected workers. Extensive amendments to 
section 236 are made in the OTCA which, except for some technical and 
conforming changes that take effect on November 21, 1988, all became 
effective on August 23, 1988. These changes must be effectuated in 
accordance with this part 617.
    (j) Agreements with States. Section 239 also was amended by the 
OTCA, to require new terms and conditions in the section 239 agreements. 
This requires new agreements to be executed between the States and the 
Secretary of Labor, and gives new emphasis to the contractual nature of 
the obligations entered into by the States to administer the TAA Program 
in strict accordance with the Act and the regulations and operating 
instructions issued by the Department.
    (k) Other. Other matters covered by the OTCA amendments, as well as 
the matters discussed in the preceding paragraphs of this section, 
shall, to the extent that the States may be involved in their 
implementation, be effectuated in strict accordance with the Act and the 
regulations and operating instructions issued by the Department, and as 
of the respective effective dates of the various provisions of the OTCA.

[59 FR 941, Jan. 6, 1994]

 Appendix A to Part 617--Standard for Claim Filing, Claimant Reporting, 
                  Job Finding, and Employment Services

         Employment Security Manual (Part V, Sections 5000-5004)

                         5000-5099 Claims Filing

  5000 Standard for Claim Filing, Claimant Reporting, Job Finding, and 
                           Employment Services

    A. Federal law requirements. Section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act 
require that a State law provide for:
    ``Payment of unemployment compensation solely through public 
employment offices or such other agencies as the Secretary may 
approve.''
    Section 3304(a)(4) of the Federal Unemployment Tax and section 
303(a)(5) of the Social Security Act require that a State law provide 
for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * *''
    Section 303(a)(1) of the Social Security Act requires that the State 
law provide for:
    ``Such methods of administration * * * as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    B. Secretary's interpretation of federal law requirements.
    1. The Secretary interprets section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act to 
require that a State law provide for payment of unemployment 
compensation solely through public employment offices or claims offices 
administered by the State employment security agency if such agency 
provides for such coordination in the operations of its public 
employment offices and claims offices as will insure (a) the payment of 
benefits only to individuals who are unemployed and who are able to work 
and available for work, and (b) that individuals claiming unemployment 
compensation (claimants) are afforded such placement and other 
employment services as are necessary and appropriate to return them to 
suitable work as soon as possible.
    2. The Secretary interprets all the above sections to require that a 
State law provide for:
    a. Such contact by claimants with public employment offices or 
claims offices or both, (1) as will reasonably insure the payment of 
unemployment compensation only to individuals who are unemployed and who 
are able to work and available for work, and (2) that claimants are 
afforded such placement

[[Page 149]]

and other employment services as are necessary and appropriate to 
facilitate their return to suitable work as soon as possible; and
    b. Methods of administration which do not unreasonably limit the 
opportunity of individuals to establish their right to unemployment 
compensation due under such States law.

   5001 Claim Filing and Claimant Reporting Requirements Designed to 
                   Satisfy Secretary's Interpretation

    A. Claim filing--total or part-total unemployment
    1. Individuals claiming unemployment compensation for total or part-
total unemployment are required to file a claim weekly or biweekly, in 
person or by mail, at a public employment office or a claims office 
(these terms include offices at itinerant points) as set forth below.
    2. Except as provided in paragraph 3, a claimant is required to file 
in person.
    a. His new claim with respect to a benefit year, or his continued 
claim for a waiting week or for his first compensable week of 
unemployment in such year; and
    b. Any other claim, when requested to do so by the claims personnel 
at the office at which he files his claim(s) because questions about his 
right to benefits are raised by circumstances such as the following:
    (1) The conditions or circumstances of his separation from 
employment;
    (2) The claimant's answers to questions on mail claim(s) indicate 
that he may be unable to work or that there may be undue restrictions on 
his availability for work or that his search for work may be inadequate 
or that he may be disqualified;
    (3) The claimant's answers to questions on mail claims create 
uncertainty about his credibility or indicate a lack of understanding of 
the applicable requirements; or
    (4) The claimant's record shows that he has previously filed a 
fraudulent claim.
    In such circumstances, the claimant is required to continue to file 
claims in person each week (or biweekly) until the State agency 
determines that filing claims in person is no longer required for the 
resolution of such questions.
    3. A claimant must be permitted to file a claim by mail in any of 
the following circumstances:
    a. He is located in an area requiring the expenditure of an 
unreasonable amount of time or money in traveling to the nearest 
facility established by the State agency for filing claims in person;
    b. Conditions make it impracticable for the agency to take claims in 
person;
    c. He has returned to full-time work on or before the scheduled date 
for his filing a claim, unless the agency makes provision for in-person 
filing at a time and place that does not interfere with his employment;
    d. The agency finds that he has good cause for failing to file a 
claim in person.
    4. A claimant who has been receiving benefits for partial 
unemployment may continue to file claims as if he were a partially 
unemployed worker for the first four consecutive weeks of total or part-
total unemployment immediately following his period of partial 
unemployment so long as he remains attached to his regular employer.
    B. Claim filing--partial unemployment. Each individual claiming 
unemployment compensation for a week (or other claim period) during 
which, because of lack of work, he is working less than his normal 
customary full-time hours for his regular employer and is earning less 
than the earnings limit provided in the State law, shall not be required 
to file a claim for such week or other claim period earlier than 2 weeks 
from the date that wages are paid for such claim period or, if a low 
earnings report is required by the State law, from the date the employer 
furnished such report to the individual. State agencies may permit 
claims for partial unemployment to be filed either in person or by mail, 
except that in the circumstances set forth in section A 3, filing by 
mail must be permitted, and in the circumstances set forth in section A 
2 b, filing in person may be required.

   5002 Requirement for Job Finding, Placement, and Other Employment 
         Services Designed to Satisfy Secretary's Interpretation

    A. Claims personnel are required to assure that each claimant is 
doing what a reasonable individual in his circumstances would do to 
obtain suitable work.
    B. In the discretion of the State agency:
    1. The claims personnel are required to give each claimant such 
necessary and appropriate assistance as they reasonably can in finding 
suitable work and at their discretion determine when more complete 
placement and employment services are necessary and appropriate for a 
claimant; and if they determine more complete services are necessary and 
appropriate, the claims personnel are to refer him to employment service 
personnel in the public employment office in which he has been filing 
claim(s), or, if he has been filing in a claims office, in the public 
employment office most accessible to him; or
    2. All placement and employment services are required to be afforded 
to each claimant by employment service personnel in the public 
employment office most accessible to him in which case the claims 
personnel in the office in which the claimant files his claim are to 
refer him to the employment service personnel when placement or other 
employment services are necessary and appropriate for him.

[[Page 150]]

    C. The personnel to whom the State agency assigns the 
responsibilities outlined in paragraph B above are required to give 
claimants such job-finding assistance, placement, and other employment 
services as are necessary and appropriate to facilitate their return to 
suitable work as soon as possible.
    In some circumstances, no such services or only limited services may 
be required. For example, if a claimant is on a short-term temporary 
layoff with a fixed return date, the only service necessary and 
appropriate to be given to him during the period of the layoff is a 
referral to suitable temporary work if such work is being performed in 
the labor market area.
    Similarly, claimants whose unemployment is caused by a labor dispute 
presumably will return to work with their employer as soon as the labor 
dispute is settled. They generally do not need services, nor do 
individuals in occupations where placement customarily is made by other 
nonfee charging placement facilities such as unions and professional 
associations.
    Claimants who fall within the classes which ordinarily would require 
limited services or no services shall, if they request placement and 
employment services, be afforded such services as are necessary and 
appropriate for them to obtain suitable work or to achieve their 
reasonable employment goals.
    On the other hand, a claimant who is permanently separated from his 
job is likely to require some services. He may need only some direction 
in how to get a job; he may need placement services if he is in an 
occupation for which there is some demand in the labor market area; if 
his occupation is outdated, he may require counseling and referral to a 
suitable training course. The extent and character of the services to be 
given any particular claimant may change with the length of his 
unemployment and depend not only on his own circumstances and 
conditions, but also on the condition of the labor market in the area.
    D. Claimants are required to report to employment service personnel, 
as directed, but such personnel and the claims personnel required to so 
arrange and coordinate the contacts required of a claimant as not to 
place an unreasonable burden on him or unreasonably limit his 
opportunity to establish his rights to compensation. As a general rule, 
a claimant is not required to contact in person claims personnel or 
employment service personnel more frequently than once a week, unless he 
is directed to report more frequently for a specific service such as 
referral to a job or a training course or counseling which cannot be 
completed in one visit.
    E. Employment service personnel are required to report promptly to 
claims personnel in the office in which the claimant files his claim(s): 
(1) his failure to apply for or accept work to which he was referred by 
such personnel or when known, by any other nonfee-charging placement 
facility such as a union or a professional association; and (2) any 
information which becomes available to it that may have a bearing on the 
claimant's ability to work or availability for work, or on the 
suitability of work to which he was referred or which was offered to 
him.

             5004 Evaluation of Alternative State Provisions

    If the State law provisions do not conform to the ``suggested State 
law requirements'' set forth in sections 5001 and 5002, but the State 
law contains alternative provisions, the Manpower Administrator, in 
collaboration with the State agency, will study the actual or 
anticipated affect of the alternative provisions. If the Manpower 
Administrator concludes that the alternative provisions satisfy the 
requirements of the Federal law as construed by the Secretary (see 
section 5000 B) he will so notify the State agency. If he does not so 
conclude, he will submit the matter to the Secretary. If the Secretary 
concludes that the alternative provisions satisfy such requirements, the 
State agency will be so notified. If the Secretary concludes that there 
is a question as to whether the alternative provisions satisfy such 
requirements, the State agency will be advised that unless the State law 
provisions are appropriately revised, a notice of hearing will be issued 
as required by the Code of Federal Regulations, title 20, section 601.3.

[59 FR 943, Jan. 6, 1994]

 Appendix B to Part 617--Standard for Claim Determinations--Separation 
                               Information

    6010 Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for:
    ``Such methods of administration . . . as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 303(a)(3) of the Social Security Act requires that a State 
law include provision for:
    ``Opportunity for a fair hearing before an impartial tribunal, for 
all individuals whose claims for unemployment compensation are denied.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation. . . .
    Section 3306(h) of the Federal Unemployment Tax Act defines 
``compensation'' as

[[Page 151]]

``cash benefits payable to individuals with respect to their 
unemployment.''
    6011 Secretary's Interpretation of Federal Law Requirements. The 
Secretary interprets the above sections to require that a State law 
include provisions which will insure that:
    A. Individuals who may be entitled to unemployment compensation are 
furnished such information as will reasonably afford them an opportunity 
to know, establish, and protect their rights under the unemployment 
compensation law of such State, and
    B. The State agency obtains and records in time for the prompt 
determination and review of benefit claims such information as will 
reasonably insure the payment of benefits to individuals to whom 
benefits are due.
    6012 Criteria for Review of State Law Conformity with Federal 
Requirements:
    In determining the conformity of a State law with the above 
requirements of the Federal Unemployment Tax Act and the Social Security 
Act as interpreted by the Secretary, the following criteria will be 
applied:
    A. Is it required that individuals who may be entitled to 
unemployment compensation be furnished such information of their 
potential rights to benefits, including the manner and places of filing 
claims, the reasons for determinations, and their rights of appeal, as 
will insure them a reasonable opportunity to know, establish, and 
protect their rights under the law of the State?
    B. Is the State agency required to obtain, in time for prompt 
determination of rights to benefits such information as will reasonably 
insure the payment of benefits to individuals to whom benefits are due?
    C. Is the State agency required to keep records of the facts 
considered in reaching determinations of rights to benefits?
    6013 Claim Determinations Requirements Designed To Meet Department 
of Labor Criteria:
    A. Investigation of claims. The State agency is required to obtain 
promptly and prior to a determination of an individual's right to 
benefits, such facts pertaining thereto as will be sufficient reasonably 
to insure the payment of benefits when due.
    This requirement embraces five separate elements:
    1. It is the responsibility of the agency to take the initiative in 
the discovery of information. This responsibility may not be passed on 
to the claimant or the employer. In addition to the agency's own 
records, this information may be obtained from the worker, the employer, 
or other sources. If the information obtained in the first instance 
discloses no essential disagreement and provides a sufficient basis for 
a fair determination, no further investigation is necessary. If the 
information obtained from other sources differs essentially from that 
furnished by the claimant, the agency, in order to meet its 
responsibility, is required to inform the claimant of such information 
from other sources and to afford the claimant an opportunity to furnish 
any further facts he may have.
    2. Evidentiary facts must be obtained as distinguished from ultimate 
facts or conclusions. That a worker was discharged for misconduct is an 
ultimate fact or conclusion; that he destroyed a machine upon which he 
was working is a primary or evidentiary fact, and the sort of fact that 
the requirement refers to.
    3. The information obtained must be sufficient reasonably to insure 
the payment of benefits when due. In general, the investigation made by 
the agency must be complete enough to provide information upon which the 
agency may act with reasonable assurance that its decision is consistent 
with the unemployment compensation law. On the other hand, the 
investigation should not be so exhaustive and time-consuming as unduly 
to delay the payment of benefits and to result in excessive costs.
    4. Information must be obtained promptly so that the payment of 
benefits is not unduly delayed.
    5. If the State agency requires any particular evidence from the 
worker, it must give him a reasonable opportunity to obtain such 
evidence.
    B. Recording of facts. The agency must keep a written record of the 
facts considered in reaching its determinations.
    C. Determination notices:
    1. The agency must give each claimant a written notice of:
    a. Any monetary determination with respect to his benefit year;
    b. Any determination with respect to purging a disqualification if, 
under the State law, a condition or qualification must be satisfied with 
respect to each week of disqualification; but in lieu of giving written 
notice of each determination for each week in which it is determined 
that the claimant has met the requirements for purging, the agency may 
inform the claimant that he has purged the disqualification for a week 
by notation on his applicant identification card or otherwise in 
writing.
    c. Any other determination which adversely affects his rights to 
benefits, except that written notice of determination need not be given 
with respect to:
    (1) A week in a benefit year for which the claimant's weekly benefit 
amount is reduced in whole or in part by earnings if, the first time in 
the benefit year that there is such a reduction, he is required to be 
furnished a booklet or leaflet containing the information set forth 
below in paragraph 2f(1). However, a written notice of determination is 
required if: (a) there is a dispute concerning the reduction with 
respect to any week (e.g., as to the amount computed as the appropriate 
reduction, etc.); or (b) there is a

[[Page 152]]

change in the State law (or in the application thereof) affecting the 
reduction; or
    (2) Any week in a benefit year subsequent to the first week in such 
benefit year in which benefits were denied, or reduced in whole or in 
part for reasons other than earnings, if denial or reduction for such 
subsequent week is based on the same reason and the same facts as for 
the first week, and if written notice of determination is required to be 
given to the claimant with respect to such first week, and with such 
notice of determination, he is required to be given a booklet or 
pamphlet containing the information set forth below in paragraph 2f(2) 
and 2h. However, a written notice of determination is required if: (a) 
there is a dispute concerning the denial or reduction of benefits with 
respect to such week; or (b) there is a change in the State law (or in 
the application thereof) affecting the denial or reduction; or (c) there 
is a change in the amount of the reduction except as to the balance 
covered by the last reduction in a series of reductions.
    Note: This procedure may be applied to determinations made with 
respect to any subsequent weeks for the same reason and on the basis of 
the same facts: (a) that claimant is unable to work, unavailable for 
work, or is disqualified under the labor dispute provision; and (b) 
reducing claimant's weekly benefit amount because of income other than 
earnings or offset by reason of overpayment.
    2. The agency must include in written notices of determinations 
furnished to claimants sufficient information to enable them to 
understand the determinations, the reasons therefor, and their rights to 
protest, request reconsideration, or appeal.
    The written notice of monetary determination must contain the 
information specified in the following items (except h) unless an item 
is specifically not applicable. A written notice of any other 
determination must contain the information specified in as many of the 
following items as are necessary to enable the claimant to understand 
the determination and to inform him of his appeal rights. Information 
specifically applicable to the individual claimant must be contained in 
the written notice of determination. Information of general application 
such as (but not limited to) the explanation of benefits for partial 
unemployment, information as to deductions, seasonality factors, and 
information as to the manner and place of taking an appeal, extension of 
the appeal period, and where to obtain information and assistance may be 
contained in a booklet or leaflet which is given the claimant with his 
monetary determination.
    a. Base period wages. The statement concerning base-period wages 
must be in sufficient detail to show the basis of computation of 
eligibility and weekly and maximum benefit amounts. (If maximum benefits 
are allowed, it may not be necessary to show details of earnings.)
    b. Employer name. The name of the employer who reported the wage is 
necessary so that the worker may check the wage transcript and know 
whether it is correct. If the worker is given only the employer number, 
he may not be able to check the accuracy of the wage transcript.
    c. Explanation of benefit formula--weekly and maximum benefit 
amounts. Sufficient information must be given the worker so that he will 
understand how his weekly benefit amount, including allowances for 
dependents, and his maximum benefit amount were figured. If benefits are 
computed by means of a table contained in the law, the table must be 
furnished with the notice of determination whether benefits are granted 
or denied.
    The written notice of determination must show clearly the weekly 
benefit amount and the maximum potential benefits to which the claimant 
is entitled.
    The notice to a claimant found ineligible by reason of insufficient 
earnings in the base period must inform him clearly of the reason for 
ineligibility. An explanation of the benefit formula contained in a 
booklet or pamphlet should be given to each claimant at or prior to the 
time he receives written notice of a monetary determination.
    d. Benefit year. An explanation of what is meant by the benefit year 
and identification of the claimant's benefit year must be included in 
the notice of determination.
    e. Information as to benefits for partial unemployment. There must 
be included either in the written notice of determination or in a 
booklet or pamphlet accompanying the notice an explanation of the 
claimant's rights to partial benefits for any week with respect to which 
he is working less than his normal customary full-time workweek because 
of lack of work and for which he earns less than his weekly benefit 
amount or weekly benefit amount plus earnings, whichever is provided by 
the State law. If the explanation is contained in the notice of 
determination, reference to the item in the notice in which his weekly 
benefit amount is entered should be made.
    f. Deductions from weekly benefits:
    (1) Earnings. Although written notice of determinations deducting 
earnings from a claimant's weekly benefit amount is generally not 
required (see paragraph 1 c (1) above), where written notice of 
determination is required (or given) it shall set forth the amount of 
earnings, the method of computing the deduction in sufficient detail to 
enable the claimant to verify the accuracy of the deduction, and his 
right to protest, request redetermination, and appeal. Where a written 
notice of determination is given to the claimant because there has been 
a change in the State law or in the application

[[Page 153]]

of the law, an explanation of the change shall be included.
    When claimant is not required to receive a written notice of 
determination, he must be given a booklet or pamphlet the first time in 
his benefit year that there is a deduction for earnings which shall 
include the following information:
    (a) The method of computing deductions for earnings in sufficient 
detail to enable the claimant to verify the accuracy of the deduction;
    (b) That he will not automatically be given a written notice of 
determination for a week with respect to which there is a deduction for 
earnings (unless there is a dispute concerning the reduction with 
respect to a week or there has been a change in the State law or in the 
application of the law affecting the deduction) but that he may obtain 
such a written notice upon request; and
    (c) A clear statement of his right to protest, request a 
redetermination, and appeal from any determination deducting earnings 
from his weekly benefit amount even though he does not automatically 
receive a written notice of determination; and if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    (2) Other deductions:
    (a) A written notice of determination is required with respect to 
the first week in claimant's benefit year in which there is a reduction 
from his benefits for a reason other than earnings. This notice must 
describe the deduction made from claimant's weekly benefit amount, the 
reason for the deduction, the method of computing it in sufficient 
detail to enable him to verify the accuracy of such deduction, and his 
right to protest, request redetermination, or appeal.
    (b) A written notice of determination is not required for subsequent 
weeks that a deduction is made for the same reason and on the basis of 
the same facts, if the notice of determination pursuant to (2) (a), or a 
booklet or pamphlet given him with such notice explains (i) the several 
kinds of deductions which may be made under the State law (e.g., 
retirement pensions, vacation pay, and overpayments); (ii) the method of 
computing each kind of deduction in sufficient detail that claimant will 
be able to verify the accuracy of deductions made from his weekly 
benefit payments; (iii) any limitation on the amount of any deduction or 
the time in which any deduction may be made; (iv) that he will not 
automatically be given a written notice of determination for subsequent 
weeks with respect to which there is a deduction for the same reason and 
on the basis of the same facts, but that he may obtain a written notice 
of determination upon request; (v) his right to protest, request 
redetermination, or appeal with respect to subsequent weeks for which 
there is a reduction from his benefits for the same reason, and on the 
basis of the same facts even though he does not automatically receive a 
written notice of determination; and (vi) that if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    g. Seasonality factors. If the individual's determination is 
affected by seasonality factors under the State law, an adequate 
explanation must be made. General explanations of seasonality factors 
which may affect determinations for subsequent weeks may be included in 
a booklet or pamphlet given claimant with his notice of monetary 
determinations.
    h. Disqualification or ineligibility. If a disqualification is 
imposed, or if the claimant is declared ineligible for one or more 
weeks, he must be given not only a statement of the period of 
disqualification or ineligibility and the amount of wage-credit 
reductions, if any, but also an explanation of the reason for the 
ineligibility or disqualification. This explanation must be sufficiently 
detailed so that he will understand why he is ineligible or why he has 
been disqualified, and what he must do in order to requalify for 
benefits or purge the disqualification. The statement must be 
individualized to indicate the facts upon which the determination was 
based, e.g., state, ``It is found that you left your work with Blank 
Company because you were tired of working; the separation was voluntary, 
and the reason does not constitute good cause,'' rather than merely the 
phrase ``voluntary quit.'' Checking a box as to the reason for the 
disqualification is not a sufficiently detailed explanation. However, 
this statement of the reason for the disqualification need not be a 
restatement of all facts considered in arriving at the determination.
    i. Appeal rights. The claimant must be given information with 
respect to his appeal rights.
    (1) The following information shall be included in the notice of 
determination:
    (a) A statement that he may appeal or, if the State law requires or 
permits a protest or redetermination before an appeal, that he may 
protest or request a redetermination.
    (b) The period within which an appeal, protest, or request for 
redetermination must be filed. The number of days provided by statute 
must be shown as well as either the beginning date or ending date of the 
period. (It is recommended that the ending date of the appeal period be 
shown, as this is the more understandable of the alternatives.)
    (2) The following information must be included either in the notice 
of determination

[[Page 154]]

or in separate informational material referred to in the notice:
    (a) The manner in which the appeal, protest, or request for 
redetermination must be filed, e.g., by signed letter, written 
statement, or on a prescribed form, and the place or places to which the 
appeal, protest, or request for redetermination may be mailed or hand-
delivered.
    (b) An explanation of any circumstances (such as nonworkdays, good 
cause, etc.) which will extend the period for the appeal, protest, or 
request for redetermination beyond the date stated or identified in the 
notice of determination.
    (c) That any further information claimant may need or desire can be 
obtained together with assistance in filing his appeal, protest, or 
request for redetermination from the local office.
    If the information is given in separate material, the notice of 
determination would adequately refer to such material if it said, for 
example, ``For other information about your (appeal), (protest), 
(redetermination) rights, see pages ---- to ---- of the ---- (name of 
pamphlet or booklet) heretofore furnished to you.''
    6014 Separation Information Requirements Designed To Meet Department 
of Labor Criteria:
    A. Information to agency. Where workers are separated, employers are 
required to furnish the agency promptly, either upon agency request or 
upon such separation, a notice describing the reasons for and the 
circumstances of the separation and any additional information which 
might affect a claimant's right to benefits. Where workers are working 
less than full time, employers are required to furnish the agency 
promptly, upon agency request, information concerning a claimant's hours 
of work and his wages during the claim periods involved, and other facts 
which might affect a claimant's eligibility for benefits during such 
periods.
    When workers are separated and the notices are obtained on a request 
basis, or when workers are working less than full time and the agency 
requests information, it is essential to the prompt processing of claims 
that the request be sent out promptly after the claim is filed and the 
employer be given a specific period within which to return the notice, 
preferably within 2 working days.
    When workers are separated and notices are obtained upon separation, 
it is essential that the employer be required to send the notice to the 
agency with sufficient promptness to insure that, if a claim is filed, 
it may be processed promptly. Normally, it is desirable that such a 
notice be sent to the central office of the agency, since the employer 
may not know in which local office the worker will file his claim. The 
usual procedure is for the employer to give the worker a copy of the 
notice sent by the employer to the agency.
    B. Information to worker:
    1. Information required to be given. Employers are required to give 
their employees information and instructions concerning the employees' 
potential rights to benefits and concerning registration for work and 
filing claims for benefits.
    The information furnished to employees under such a requirement need 
not be elaborate; it need only be adequate to insure that the worker who 
is separated or who is working less than full time knows he is 
potentially eligible for benefits and is informed as to what he is to do 
or where he is to go to file his claim and register for work. When he 
files his claim, he can obtain more detailed information.
    In States that do not require employers to furnish periodically to 
the State agency detailed reports of the wages paid to their employees, 
each employer is required to furnish to his employees information as to 
(a) the name under which he is registered by the State agency, (b) the 
address where he maintains his payroll records, and (c) the workers' 
need for this information if and when they file claims for benefits.
    2. Methods for giving information. The information and instructions 
required above may be given in any of the following ways:
    a. Posters prominently displayed in the employer's establishment. 
The State agency should supply employers with a sufficient number of 
posters for distribution throughout their places of business and should 
see that the posters are conspicuously displayed at all times.
    b. Leaflets. Leaflets distributed either periodically or at the time 
of separation or reduction of hours. The State agency should supply 
employers with a sufficient number of leaflets.
    c. Individual notices. Individual notices given to each employee at 
the time of separation or reduction in hours.
    It is recommended that the State agency's publicity program be used 
to supplement the employer-information requirements. Such a program 
should stress the availability and location of claim-filing offices and 
the importance of visiting those offices whenever the worker is 
unemployed, wishes to apply for benefits, and to seek a job.
    6015 Evaluation of Alternative State Provisions with Respect to 
Claim Determinations and Separation Information. If the State law 
provisions do not conform to the suggested requirements set forth in 
sections 6013 and 6014, but the State law contains alternative 
provisions, the Bureau of Employment Security, in collaboration with the 
State agency, will study the actual or anticipated effects of the 
alternative provisions. If the Administrator of the Bureau concludes 
that the alternative provisions satisfy the criteria in

[[Page 155]]

section 6012, he will so notify the State agency. If the Administrator 
of the Bureau does not so conclude, he will submit the matter to the 
Secretary. If the Secretary concludes that the alternative provisions 
satisfy the criteria in section 6012, the State agency will be so 
notified. If the Secretary concludes that there is a question as to 
whether the alternative provisions satisfy the criteria, the State 
agency will be advised that unless the State law provisions are 
appropriately revised, a notice of hearing will be issued as required by 
the Code of Federal Regulations, title 20, Sec. 601.5.

[51 FR 45848, Dec. 22, 1986. Redesignated at 59 FR 943, Jan. 6, 1994]

  Appendix C to Part 617--Standard for Fraud and Overpayment Detection

    7510 Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for:
    ``Such methods of administration . . . as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 1603(a)(4) of the Internal Revenue Code and section 
3030(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation . . .''
    Section 1607(h) of the Internal Revenue Code defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''
    7511 The Secretary's Interpretation of Federal Law Requirements. The 
Secretary of Labor interprets the above sections to require that a State 
law include provision for such methods of administration as are, within 
reason, calculated (1) to detect benefits paid through error by the 
agency or through willful misrepresentation or error by the claimant or 
others, and (2) to deter claimants from obtaining benefits through 
willful misrepresentation.
    7513 Criteria for Review of State Conformity With Federal 
Requirements. In determining State conformity with the above 
requirements of the Internal Revenue Code and the Social Security Act, 
as interpreted by the Secretary of Labor, the following criteria will be 
applied:
    A. Are investigations required to be made after the payment of 
benefits, (or, in the case of interstate claims, are investigations made 
by the agent State after the processing of claims) as to claimants' 
entitlement to benefits paid to them in a sufficient proportion of cases 
to test the effectiveness of the agency's procedures for the prevention 
of payments which are not due? To carry out investigations, has the 
agency assigned to some individual or unit, as a basic function, the 
responsibility of making or functionally directing such investigations?
    Explanation: It is not feasible to prescribe the extent to which the 
above activities are required; however, they should always be carried on 
to such an extent that they will show whether or not error or willful 
misrepresentation is increasing or decreasing, and will reveal problem 
areas. The extent and nature of the above activities should be varied 
according to the seriousness of the problem in the State. The 
responsible individual or unit should:
    1. Check paid claims for overpayment and investigate for willful 
misrepresentation or, alternatively, advise and assist the operating 
units in the performance of such functions, or both;
    2. Perform consultative services with respect to methods and 
procedures for the prevention and detection of fraud; and
    3. Perform other services which are closely related to the above.
    Although a State agency is expected to make a full-time assignment 
of responsibility to a unit or individual to carry on the functions 
described above, a small State agency might make these functions a part-
time responsibility of one individual. In connection with the detection 
of overpayments, such a unit or individual might, for example:
    (a) Investigate information on suspected benefit fraud received from 
any agency personnel, and from sources outside the agency, including 
anonymous complaints;
    (b) Investigate information secured from comparisons of benefit 
payments with employment records to detect cases of concurrent working 
(whether in covered or noncovered work) and claiming of benefits 
(including benefit payments in which the agency acted as agent for 
another State).
    The benefit fraud referred to herein may involve employers, agency 
employees, and witnesses, as well as claimants.
    Comparisons of benefit payments with employment records are comonly 
made either by post-audit or by industry surveys. The so-called ``post-
audit'' is a matching of central office wage-record files against 
benefit payments for the same period. ``Industry surveys'' or ``mass 
audits'' are done in some States by going directly to employers for pay-
roll information to be checked against concurrent benefit lists. A plan 
of investigation based on a sample post-audit will be considered as 
partial fulfillment of the investigation program; it would need to be 
supplemented by other methods capable of detecting overpayments to 
persons who have moved into noncovered occupations or are claiming 
interstate benefits.
    B. Are adequate records maintained by which the results of 
investigations may be evaluated?

[[Page 156]]

    Explanation. To meet this criterion, the State agency will be 
expected to maintain records of all its activities in the detection of 
overpayments, showing whether attributable to error or willful 
misrepresentation, measuring the results obtained through various 
methods, and noting the remedial action taken in each case. The adequacy 
and effectiveness of various methods of checking for willful 
misrepresentation can be evaluated only if records are kept of the 
results obtained. Internal reports on fraudulent and erroneous 
overpayments are needed by State agencies for self-evaluation. Detailed 
records should be maintained in order that the State agency may 
determine, for example, which of several methods of checking currently 
used are the most productive. Such records also will provide the basis 
for drawing a clear distinction between fraud and error.
    C. Does the agency take adequate action with respect to publicity 
concerning willful misrepresentation and its legal consequences to deter 
fraud by claimants?
    Explanation. To meet this criterion, the State agency must issue 
adequate material of claimant eligibility requirements and must take 
necessary action to obtain publicity on the legal consequences of 
willful misrepresentation or willful nondisclosure of facts.
    Public announcements on convictions and resulting penalties for 
fraud are generally considered necessary as a deterrent to other 
persons, and to inform the public that the agency is carrying on an 
effective program to prevent fraud. This alone is not considered 
adequate publicity. It is important that information be circulated which 
will explain clearly and understandably the claimant's rights, and the 
obligations which he must fulfill to be eligible for benefits. Leaflets 
for distribution and posters placed in local offices are appropriate 
media for such information.
    *7515 Evaluation of Alternative State Provisions with Respect to 
Erroneous and Illegal Payments. If the methods of administration 
provided for by the State law do not conform to the suggested methods of 
meeting the requirements set forth in section 7511, but a State law does 
provide for alternative methods of administration designed to accomplish 
the same results, the Bureau of Employment Security, in collaboration 
with the State agency, will study the actual or anticipated effect of 
the alternative methods of administration. If the Bureau concludes that 
the alternative methods satisfy the criteria in section 7513, it will so 
notify the State agency. If the Bureau does not so conclude, it will 
submit to the Secretary the results of the study for his determination 
of whether the State's alternative methods of administration meet the 
criteria.

[51 FR 45848, Dec. 22, 1986. Redesignated at 59 FR 943, Jan. 6, 1994]

                        PARTS 618-621 [RESERVED]



PART 625_DISASTER UNEMPLOYMENT ASSISTANCE--Table of Contents




Sec.
625.1 Purpose; rules of construction.
625.2 Definitions.
625.3 Reemployment assistance.
625.4 Eligibility requirements for Disaster Unemployment Assistance.
625.5 Unemployment caused by a major disaster.
625.6 Weekly amount; jurisdictions; reductions.
625.7 Disaster Unemployment Assistance: Duration.
625.8 Applications for Disaster Unemployment Assistance.
625.9 Determinations of entitlement; notices to individual.
625.10 Appeal and review.
625.11 Provisions of State law applicable.
625.12 The applicable State for an individual.
625.13 Restrictions on entitlement; disqualification.
625.14 Overpayments; disqualification for fraud.
625.15 Inviolate rights to DUA.
625.16 Recordkeeping; disclosure of information.
625.17 Announcement of the beginning of a Disaster Assistance Period.
625.18 Public access to Agreements.
625.19 Information, reports and studies.
625.20 Saving clause.
625.30 Appeal Procedures for Guam, American Samoa, Commonwealth of the 
          Northern Mariana Islands, Federated States of Micronesia, 
          Republic of the Marshall Islands, and the Trust Territory of 
          the Pacific Islands.

Appendix A to Part 625--Standard for Claim Filing, Claimant Reporting, 
          Job Finding, and Employment Services
Appendix B to Part 625--Standard for Claim Determinations--Separation 
          Information
Appendix C to Part 625--Standard for Fraud and Overpayment Detection

    Authority: 42 U.S.C. 1302; 42 U.S.C. 5164; 42 U.S.C. 5189a(c); 42 
U.S.C. 5201(a); Executive Order 12673 of March 23, 1989 (54 FR 12571); 
delegation of authority from the Director of the Federal Emergency 
Management Agency to the Secretary of Labor, effective December 1, 1985 
(51 FR 4988); Secretary's Order No. 4-75 (40 FR 18515).

[[Page 157]]


    Source: 42 FR 46712, Sept. 16, 1977, unless otherwise noted.



Sec. 625.1  Purpose; rules of construction.

    (a) Purpose. Section 410 of ``The Robert T. Stafford Disaster Relief 
and Emergency Assistance Act'' amended the program for the payment of 
unemployment assistance to unemployed individuals whose unemployment is 
caused by a major disaster, and to provide reemployment assistance 
services to those individuals. The unemployment assistance provided for 
in section 410 of the Act is hereinafter referred to as Disaster 
Unemployment Assistance, or DUA. The regulations in this part are issued 
to implement sections 410 and 423 of the Act.
    (b) First rule of construction. Sections 410 and 423 of the Act and 
the implementing regulations in this part shall be construed liberally 
so as to carry out the purposes of the Act.
    (c) Second rule of construction. Sections 410 and 423 of the Act and 
the implementing regulations in this part shall be construed so as to 
assure insofar as possible the uniform interpretation and application of 
the Act throughout the United States.
    (d) Effectuating purpose and rules of construction. (1) In order to 
effectuate the provisions of this section, each State agency shall 
forward to the United States Department of Labor, on receipt of a 
request from the Department, a copy of any determination or 
redetermination ruling on an individual's entitlement to DUA.
    (2) If the Department believes a determination or redetermination is 
inconsistent with the Secretary's interpretation of the Act, the 
Department may at any time notify the State agency of the department's 
view. Thereafter, the State agency shall appeal if possible, and shall 
not follow such determination or redetermination as a precedent; and in 
any subsequent proceedings which involve such determination or 
redetermination, or wherein such determination or redetermination is 
cited as precedent or otherwise relied upon, the State agency shall 
inform the hearing officer of the Department's view and shall make all 
reasonable efforts to obtain modification, limitation, or overruling of 
the determination or redetermination.
    (3) A State agency may request reconsideration of a notice that a 
determination or redetermination is inconsistent with the Act, and shall 
be given an opportunity to present views and arguments if desired. If a 
determination or redetermination setting a prec edent becomes final, 
which the Department believes to be inconsistent with the Act, the 
Secretary will decide whether the Agreement with the State shall be 
terminated.
    (4) Concurrence of the Department in a determination or 
redetermination shall not be presumed from the absence of a notice 
issued pursuant to this paragraph.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 554, Jan. 5, 1990]



Sec. 625.2  Definitions.

    For the purposes of the Act and this part:
    (a) Act means sections 410 and 423 of The Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (formerly section 407 of 
the ``Disaster Relief Act of 1974'', Pub. L. 93-288, 88 Stat. 143, 156, 
approved May 22, 1974), 42 U.S.C. 5177, 5189a, as amended by The 
Disaster Relief and Emergency Assistance Amendments of 1988, Pub. L. 
100-707, 102 Stat. 4689, 4704, 4705, approved November 23, 1988.
    (b) Agreement means the Agreement entered into pursuant to the Act, 
between a State and the Secretary of Labor of the United States, under 
which the State agency of the State agrees to make payments of Disaster 
Unemployment Assistance in accordance with the Act and the regulations 
and procedures thereunder prescribed by the Secretary.
    (c) Announcement date means the first day on which the State agency 
publicly announces the availability of Disaster Unemployment Assistance 
in the State, pursuant to Sec. 625.17.
    (d) Compensation means unemployment compensation as defined in 
section 85(b) of the Internal Revenue Code of 1986, and shall include 
any assistance or allowance payable to an individual with respect to 
such individual's unemployment under any State law or Federal 
unemployment compensation

[[Page 158]]

law unless such governmental unemployment compensation program payments 
are not considered ``compensation'' by ruling of the Internal Revenue 
Service or specific provision of Federal and/or State law because such 
payments are based on employee contributions which are not deductible 
from Federal income tax liability until the total nondeductible 
contributions paid by the employee to such program has been paid or are 
not ``compensation'' as defined under paragraph (d)(5) of this section. 
Governmental unemployment compensation programs include (but are not 
limited to) programs established under: a State law approved by the 
Secretary of Labor pursuant to section 3304 of the Internal Revenue 
Code, chapter 85 of title 5 of the United States Code, the Railroad 
Unemployment Insurance Act (45 U.S.C. 351 et seq.), any Federal 
supplementary compensation law, and trade readjustment allowances 
payable under chapter 2 of title II of the Trade Act of 1974 (19 U.S.C. 
2271 et seq.). ``Compensation'' also includes ``regular compensation'', 
``additional compensation'', ``extended compensation'', ``Federal 
supplementary compensation'', and ``disability payments'' defined as 
follows:
    (1) Regular compensation means compensation payable to an individual 
under any State law or the unemployment compensation plan of a political 
subdivision of a State and, when so payable, includes compensation 
payable pursuant to 5 U.S.C. chapter 85 (parts 609 and 614 of this 
chapter), but not including extended compensation or additional 
compensation.
    (2) Additional compensation means compensation totally financed by a 
State and payable under a State law by reason of conditions of high 
unemployment or by reason of other special factors, and, when so 
payable, includes compensation payable pursuant to 5 U.S.C. chapter 85.
    (3) Extended compensation means compensation payable to an 
individual for weeks of unemployment in an extended benefit period, 
under those provisions of a State law which satisfy the requirements of 
the Federal-State Extended Unemployment Compensation Act of 1970 (title 
II, Pub. L. 91-373; 84 Stat. 695, 708; part 615 of this chapter), as 
amended with respect to the payment of extended compensation, and, when 
so payable, includes additional compensation and compensation payable 
pursuant to 5 U.S.C. chapter 85.
    (4) Federal supplementary compensation means supplemental 
compensation payable under a temporary Federal law after exhaustion of 
regular and extended compensation.
    (5) Disability payments means cash disability payments made pursuant 
to a governmental program as a substitute for cash unemployment payments 
to an individual who is ineligible for such payments solely because of 
the disability, except for payments made under workmen's compensation 
acts for personal injuries or sickness.
    (e) Date the major disaster began means the date a major disaster 
first occurred, as specified in the understanding between the Federal 
Emergency Management Agency and the Governor of the State in which the 
major disaster occurred.
    (f) Disaster Assistance Period means the period beginning with the 
first week following the date the major disaster began, and ending with 
[the 26th week subsequent to the date the major disaster was declared.
    (g) Disaster Unemployment Assistance means the assistance payable to 
an individual eligible for the assistance under the Act and this part, 
and which is referred to as DUA.
    (h) Federal Coordinating Officer means the official appointed 
pursuant to section 302 of The Robert T. Stafford Disaster Relief and 
Emergency Assistance Act, to operate in the affected major disaster 
area.
    (i) Governor means the chief executive of a State.
    (j) Initial application means the first application for DUA filed by 
an individual, on the basis of which the individual's eligibility for 
DUA is determined.
    (k) Major disaster means a major disaster as declared by the 
President pursuant to section 401 of The Robert T. Stafford Disaster 
Relief and Emergency Assistance Act.

[[Page 159]]

    (l) Major disaster area means the area identified as eligible for 
Federal assistance by the Federal Emergency Management Agency, pursuant 
to a Presidential declaration of a major disaster.
    (m) Secretary means the Secretary of Labor of the United States.
    (n) Self-employed individual means an individual whose primary 
reliance for income is on the performance of services in the 
individual's own business, or on the individual's own farm.
    (o) Self-employment means services performed as a self-employed 
individual.
    (p) State means any State of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the United States Virgin 
Islands, the Territory of Guam, American Samoa, Commonwealth of the 
Northern Mariana Islands, Federated States of Micronesia, Republic of 
the Marshall Islands, and the Trust Territory of the Pacific Islands.
    (q) State agency means--
    (1) In all States except the Territory of Guam, American Samoa, 
Commonwealth of the Northern Mariana Islands, Federated States of 
Micronesia, Republic of the Marshall Islands and the Trust Territory of 
the Pacific Islands, the agency administering the State law; and
    (2) In the Territory of Guam, American Samoa, Commonwealth of the 
Northern Mariana Islands, Federated States of Micronesia, Republic of 
the Marshall Islands and the Trust Territory of the Pacific Islands, the 
agency designated in the Agreement entered into by the State.
    (r)(1) State law means, with respect to--
    (i) The States of the United States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the Virgin Islands, the unemployment 
compensation law of the State which has been approved under section 
3304(a) of the Internal Revenue Code of 1986 (26 U.S.C. 3304(a)); and
    (ii) The Territory of Guam, American Samoa, Commonwealth of the 
Northern Mariana Islands, Federated States of Micronesia, Republic of 
the Marshall Islands and the Trust Territory of the Pacific Islands, the 
Hawaii Employment Security Law.
    (2) Applicable State law means, for an individual, the State law of 
the applicable State for an individual as provided in Sec. 625.12.
    (s) Unemployed worker means an individual who was employed in or was 
to commence employment in the major disaster area at the time the major 
disaster began, and whose principal source of income and livelihood is 
dependent upon the individual's employment for wages, and whose 
unemployment is caused by a major disaster as provided in Sec. 
625.5(a).
    (t) Unemployed self-employed individual means an individual who was 
self-employed in or was to commence self-employment in the major 
disaster area at the time the major disaster began, and whose principal 
source of income and livelihood is dependent upon the individual's 
performance of service in self-employment, and whose unemployment is 
caused by a major disaster as provided in Sec. 625.5(b).
    (u) Wages means remuneration for services performed for another, 
and, with respect to a self-employed individual, net income from 
services performed in self-employment.
    (v) Week means a week as defined in the applicable State law.
    (w) Week of unemployment means--
    (1) For an unemployed worker, any week during which the individual 
is totally, part-totally, or partially unemployed. A week of total 
unemployment is a week during which the individual performs no work and 
earns no wages, or has less than full-time work and earns wages not 
exceeding the minimum earnings allowance prescribed in the applicable 
State law. A week of part-total unemployment is a week of otherwise 
total unemployment during which the individual has odd jobs or 
subsidiary work and earns wages not exceeding the maximum earnings 
allowance prescribed in the applicable State law. A week of partial 
unemployment is a week during which the individual works less than 
regular, full-time hours for the individual's regular employer, as a 
direct result of the major disaster, and earns wages not exceeding the 
maximum earnings allowance prescribed by the applicable State law.

[[Page 160]]

    (2) For an unemployed self-employed individual, any week during 
which the individual is totally, part-totally, or partially unemployed. 
A week of total unemployment is a week during which the individual 
performs no services in self-employment or in an employer-employee 
relationship, or performs services less than full-time and earns wages 
not exceeding the minimum earnings allowance prescribed in the 
applicable State law. A week of part-total unemployment is a week of 
otherwise total unemployment during which the individual has odd jobs or 
subsidiary work and earns wages not exceeding the maximum earnings 
allowance prescribed in the applicable State law. A week of partial 
unemployment is a week during which the individual performs less than 
the customary full-time services in self-employment, as a direct result 
of the major disaster, and earns wages not exceeding the maximum 
earnings allowance prescribed by the applicable State law, or during 
which the only activities or services performed are for the sole purpose 
of enabling the individual to resume self-employment.
    (3) If the week of unemployment for which an individual claims DUA 
is a week with respect to which the individual is reemployed in a 
suitable position or has commenced services in self-employment, that 
week shall be treated as a week of partial unemployment if the week 
qualifies as a week of partial unemployment as defined in this 
paragraph.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 554, Jan. 5, 1990; 56 
FR 22805, May 16, 1991]



Sec. 625.3  Reemployment assistance.

    (a) State assistance. Except as provided in paragraph (b) of this 
section, the applicable State shall provide, without reimbursement from 
any funds provided under the Act, reemployment assistance services under 
any other law administered by the State to individuals applying for DUA 
and all other individuals who are unemployed because of a major 
disaster. Such services shall include, but are not limited to, 
counseling, referrals to suitable work opportunities, and suitable 
training, to assist the individuals in obtaining reemployment in 
suitable positions as soon as possible.
    (b) Federal assistance. In the case of American Samoa, Commonwealth 
of the Northern Mariana Islands, Federated States of Micronesia, 
Republic of the Marshall Islands, and the Trust Territory of the Pacific 
Islands, the Department of Labor, in consultation with the Federal 
Emergency Management Agency, will determine what reemployment services 
are needed by DUA applicants, and if any available Federal programs of 
reemployment assistance services can be implemented in that 
jurisdiction.

[55 FR 554, Jan. 5, 1990; as amended at 56 FR 22806, May 16, 1991]



Sec. 625.4  Eligibility requirements for Disaster Unemployment Assistance.

    An individual shall be eligible to receive a payment of DUA with 
respect to a week of unemployment, in accordance with the provisions of 
the Act and this part if:
    (a) That week begins during a Disaster Assistance Period;
    (b) The applicable State for the individual has entered into an 
Agreement which is in effect with respect to that week;
    (c) The individual is an unemployed worker or an unemployed self-
employed individual;
    (d) The individual's unemployment with respect to that week is 
caused by a major disaster, as provided in Sec. 625.5;
    (e) The individual has filed a timely initial application for DUA 
and, as appropriate, a timely application for a payment of DUA with 
respect to that week;
    (f) That week is a week of unemployment for the individual;
    (g) The individual is able to work and available for work within the 
meaning of the applicable State law: Provided, That an individual shall 
be deemed to meet this requirement if any injury caused by the major 
disaster is the reason for inability to work or engage in self-
employment; or, in the case of an unemployed self-employed individual, 
the individual performs service or activities which are solely for the 
purpose of enabling the individual to resume self-employment;

[[Page 161]]

    (h) The individual has not refused a bona fide offer of employment 
in a suitable position, or refused without good cause to resume or 
commence suitable self-employment, if the employment or self-employment 
could have been undertaken in that week or in any prior week in the 
Disaster Assistance Period; and
    (i) The individual is not eligible for compensation (as defined in 
Sec. 625.2(d)) or for waiting period credit for such week under any 
other Federal or State law, except that an individual determined 
ineligible because of the receipt of disqualifying income shall be 
considered eligible for such compensation or waiting period credit. An 
individual shall be considered ineligible for compensation or waiting 
period credit (and thus potentially eligible for DUA) if the individual 
is under a disqualification for a cause that occurred prior to the 
individual's unemployment due to the disaster, or for any other reason 
is ineligible for compensation or waiting period credit as a direct 
result of the major disaster.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 555, Jan. 5, 1990]



Sec. 625.5  Unemployment caused by a major disaster.

    (a) Unemployed worker. The unemployment of an unemployed worker is 
caused by a major disaster if--
    (1) The individual has a ``week of unemployment'' as defined in 
Sec. 625.2(w)(1) following the ``date the major disaster began'' as 
defined in Sec. 625.2(e), and such unemployment is a direct result of 
the major disaster; or
    (2) The individual is unable to reach the place of employment as a 
direct result of the major disaster; or
    (3) The individual was to commence employment and does not have a 
job or is unable to reach the job as a direct result of the major 
disaster; or
    (4) The individual has become the breadwinner or major support for a 
household because the head of the household has died as a direct result 
of the major disaster; or
    (5) The individual cannot work because of an injury caused as a 
direct result of the major disaster.
    (b) Unemployed self-employed individual. The unemployment of an 
unemployed self-employed individual is caused by a major disaster if--
    (1) The individual has a ``week of unemployment'' as defined in 
Sec. 625.2(w)(2) following the ``date the major disaster began'' as 
defined in Sec. 625.2(e), and such unemployment is a direct result of 
the major disaster; or
    (2) The individual is unable to reach the place where services as a 
self-employed individual are performed, as a direct result of the major 
disaster; or
    (3) The individual was to commence regular services as a self-
employed individual, but does not have a place or is unable to reach the 
place where the services as a self-employed individual were to be 
performed, as a direct result of the major disaster; or
    (4) The individual cannot perform services as a self-employed 
individual because of an injury caused as a direct result of the major 
disaster.
    (c) Unemployment is a direct result of the major disaster. For the 
purposes of paragraphs (a)(1) and (b)(1) of this section, a worker's or 
self-employed individual's unemployment is a direct result of the major 
disaster where the unemployment is an immediate result of the major 
disaster itself, and not the result of a longer chain of events 
precipitated or exacerbated by the disaster. Such an individual's 
unemployment is a direct result of the major disaster if the 
unemployment resulted from:
    (1) The physical damage or destruction of the place of employment;
    (2) The physical inaccessibility of the place of employment in the 
major disaster area due to its closure by or at the request of the 
federal, state or local government, in immediate response to the 
disaster; or
    (3) Lack of work, or loss of revenues, provided that, prior to the 
disaster, the employer, or the business in the case of a self-employed 
individual, received at least a majority of its revenue or income from 
an entity in the major disaster area that was either damaged or 
destroyed in the disaster, or an entity in the major disaster area 
closed by the

[[Page 162]]

federal, state or local government in immediate response to the 
disaster.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 555, Jan. 5, 1990; 56 
FR 22806, May 16, 1991; 66 FR 56962, Nov. 13, 2001; 68 FR 10937, Mar. 6, 
2003]



Sec. 625.6  Weekly amount; jurisdictions; reductions.

    (a) In all States, except as provided in paragraphs (c) and (d) of 
this section, the amount of DUA payable to an unemployed worker or 
unemployed self-employed individual for a week of total unemployment 
shall be the weekly amount of compensation the individual would have 
been paid as regular compensation, as computed under the provisions of 
the applicable State law for a week of total unemployment. In no event 
shall such amount be in excess of the maximum amount of regular 
compensation authorized under the applicable State law for that week.
    (1) Except as provided in paragraph (a)(2) or (b) of this section, 
in computing an individual's weekly amount of DUA, qualifying employment 
and wage requirements and benefit formula of the applicable State law 
shall be applied; and for purposes of this section, employment, wages, 
and self-employment which are not covered by the applicable State law 
shall be treated in the same manner and with the same effect as covered 
employment and wages, but shall not include employment or self-
employment, or wages earned or paid for employment or self-employment, 
which is contrary to or prohibited by any Federal law, such as, but not 
limited to, section 3304(a)(14)(A) of the Federal Unemployment Tax Act 
(26 U.S.C. 3304(a)(14)(A)).
    (2) For purposes of paragraph (a)(1) of this section, the base 
period to be utilized in computing the DUA weekly amount shall be the 
most recent tax year that has ended for the individual (whether an 
employee or self-employed) prior to the individual's unemployment that 
was a direct result of the major disaster. The self-employment income to 
be treated as wages for purposes of computing the weekly amount under 
this paragraph (a) shall be the net income reported on the tax return of 
the individual as income from all self-employment that was dependent 
upon the performance of services by the individual. If an individual has 
not filed a tax return for the most recent tax year that has ended at 
the time of such individual's initial application for DUA, such 
individual shall have a weekly amount determined in accordance with 
paragraph (e)(3) of this section.
    (3) As of the date of filing an initial application for DUA, family 
members over the age of majority, as defined under the statutes of the 
applicable State, who were customarily or routinely employed or self-
employed as a family unit or in the same self-employment business prior 
to the individuals' unemployment that was a direct result of the major 
disaster, shall have the wages from such employment or net income from 
the self-employment allocated equally among such adult family members 
for purposes of computing a weekly amount under this paragraph (a), 
unless the documentation to substantiate employment or self-employment 
and wages earned or paid for such employment or self-employment 
submitted as required by paragraph (e) of this section supports a 
different allocation. Family members under the age of majority as of the 
date of filing an initial application for DUA shall have a weekly amount 
computed under this paragraph (a) based on the actual wages earned or 
paid for employment or self-employment rather than an equal allocation.
    (b) If the weekly amount computed under paragraph (a) of this 
section is less than 50 percent of the average weekly payment of regular 
compensation in the State, as provided quarterly by the Department, or, 
if the individual has insufficient wages from employment or insufficient 
or no net income from self-employment (which includes individuals 
falling within paragraphs (a)(3) and (b)(3) of Sec. 625.5) in the 
applicable base period to compute a weekly amount under paragraph (a) of 
this section, the individual shall be determined entitled to a weekly 
amount equal to 50 percent of the average weekly payment of regular 
compensation in the State.
    (1) If an individual was customarily or routinely employed or self-
employed

[[Page 163]]

less than full-time prior to the individual's unemployment as a direct 
result of the major disaster, such individual's weekly amount under this 
paragraph (b)(1) shall be determined by calculating the percent of time 
the individual was employed or self-employed compared to the customary 
and usual hours per week that would constitute the average per week 
hours for year-round full-time employment or self-employment for the 
occupation, then applying the percentage to the determined 50 percent of 
the average weekly amount of regular compensation paid in the State. The 
State agency shall utilize information furnished by the applicant at the 
time of filing an initial application for DUA and any labor market or 
occupational information available within the State agency to determine 
the average per week hours for full-time employment or self-employment 
for the occupation. If the weekly amount computed for an individual 
under this paragraph (b)(1) is less than the weekly amount computed 
under paragraph (a) of this section for the individual, the individual 
shall be entitled to the higher weekly amount.
    (2) The weekly amount so determined under paragraph (b)(1) of this 
section, if not an even dollar amount, shall be rounded in accordance 
with the applicable State law.
    (c) In the Territory of Guam and the Commonwealth of the Northern 
Mariana Islands, the amount of DUA payable to an unemployed worker or 
unemployed self-employed individual for a week of total unemployment 
shall be the average of the payments of regular compensation made under 
all State laws referred to in Sec. 625.2(r)(1)(i) for weeks of total 
unemployment in the first four of the last five completed calendar 
quarters immediately preceding the quarter in which the major disaster 
began. The weekly amount so determined, if not an even dollar amount, 
shall be rounded to the next higher dollar.
    (d) In American Samoa, Federated States of Micronesia, Republic of 
the Marshall Islands and the Trust Territory of the Pacific Islands, the 
amount of DUA payable to an unemployed worker or unemployed self-
employed individual for a week of total unemployment shall be the amount 
agreed upon by the Regional Administrator, Employment and Training 
Administration, for Region IX (San Francisco), and the Federal 
Coordinating Officer, which shall approximate 50 percent of the area-
wide average of the weekly wages paid to individuals in the major 
disaster area in the quarter immediately preceding the quarter in which 
the major disaster began. The weekly amount so determined, if not an 
even dollar amount, shall be rounded to the next higher dollar.
    (e) The State agency shall immediately determine, upon the filing of 
an initial application for DUA, a weekly amount under the provisions of 
paragraphs (a) through (d) of this section, as the case may be, based on 
the individual's statement of employment or self-employment preceding 
the individual's unemployment that was a direct result of the major 
disaster, and wages earned or paid for such employment or self-
employment. An immediate determination of a weekly amount shall also be 
made where, in conjunction with the filing of an initial application for 
DUA, the individual submits documentation substantiating employment or 
self-employment and wages earned or paid for such employment or self-
employment, or, in the absence of documentation, where any State agency 
records of employment or self-employment and wages earned or paid for 
such employment or self-employment, justify the determination of a 
weekly amount. An immediate determination shall also be made based on 
the individual's statement or in conjunction with the submittal of 
documentation in those cases where the individual was to commence 
employment or self-employment on or after the date the major disaster 
began but was prevented from doing so as a direct result of the 
disaster.
    (1) In the case of a weekly amount determined in accordance with 
paragraph (e) of this section, based only on the individual's statement 
of earnings, the individual shall furnish documentation to substantiate 
the employment or self-employment or wages earned from or paid for such 
employment or self-employment or documentation to support that the 
individual was to commence employment

[[Page 164]]

or self-employment on or after the date the major disaster began. In 
either case, documentation shall be submitted within 21 calendar days of 
the filing of the initial application for DUA.
    (2) Any individual who fails to submit documentation to substantiate 
employment or self-employment or the planned commencement of employment 
or self-employment in accordance with paragraph (e)(1) of this section, 
shall be determined ineligible for the payment of DUA for any week of 
unemployment due to the disaster. Any weeks for which DUA was already 
paid on the application prior to the date of the determination of 
ineligibility under this paragraph (e)(2) are overpaid and a 
determination shall be issued in accordance with Sec. 625.14(a). In 
addition, the State agency shall consider whether the individual is 
subject to a disqualification for fraud in accordance with the 
provisions set forth in Sec. 625.14(i).
    (3) For purposes of a computation of a weekly amount under paragraph 
(a) of this section, if an individual submits documentation to 
substantiate employment or self-employment in accordance with paragraph 
(e)(1), but not documentation of wages earned or paid during the base 
period set forth in paragraph (a)(2) of this section, including those 
cases where the individual has not filed a tax return for the most 
recent tax year that has ended, the State agency shall immediately 
redetermine the weekly amount of DUA payable to the individual in 
accordance with paragraph (b) of this section.
    (4) Any individual determined eligible for a weekly amount of DUA 
under the provisions of paragraph (e)(3) of this section may submit 
necessary documentation to substantiate wages earned or paid during the 
base period set forth in paragraph (a)(2) of this section, including 
those cases where the individual has not filed a tax return for the most 
recent tax year that has ended, at any time prior to the end of the 
disaster assistance period. A redetermination of the weekly amount 
payable, as previously determined under paragraph (b) of this section, 
shall immediately be made if the wages earned or paid for services 
performed in employment or self-employment reflected in such 
documentation is sufficient to permit a computation under paragraph (a) 
of this section of a weekly amount higher than was determined under 
paragraph (b) of this section. Any higher amount so determined shall be 
applicable to all weeks during the disaster assistance period for which 
the individual was eligible for the payment of DUA.
    (f)(1) The weekly amount of DUA payable to an unemployed worker or 
unemployed self-employed individual for a week of partial or part-total 
unemployment shall be the weekly amount determined under paragraph (a), 
(b), (c) or (d) of this section, as the case may be, reduced (but not 
below zero) by the amount of wages that the individual earned in that 
week as determined by applying to such wages the earnings allowance for 
partial or part-total employment prescribed by the applicable State law.
    (2) The weekly amount of DUA payable to an unemployed self-employed 
individual for a week of unemployment shall be the weekly amount 
determined under paragraph (a), (b), (c) or (d) of this section, as the 
case may be, reduced (but not below zero) by the full amount of any 
income received during the week for the performance of services in self-
employment, regardless of whether or not any services were performed 
during the week, by applying the earnings allowance as set forth in 
paragraph (f)(1) of this section. Notwithstanding the definition of 
``wages'' for a self-employed individual under Sec. 625.2(u), the term 
``any income'' for purposes of this paragraph (f)(2) means gross income.

[60 FR 25568, May 11, 1995]



Sec. 625.7  Disaster Unemployment Assistance: Duration.

    DUA shall be payable to an eligible unemployed worker or eligible 
unemployed self-employed individual for all weeks of unemployment which 
begin during a Disaster Assistance Period.



Sec. 625.8  Applications for Disaster Unemployment Assistance.

    (a) Initial application. An initial application for DUA shall be 
filed by an individual with the State agency of the applicable State 
within 30 days after

[[Page 165]]

the announcement date of the major disaster as the result of which the 
individual became unemployed, and on a form prescribed by the Secretary 
which shall be furnished to the individual by the State agency. An 
initial application filed later than 30 days after the announcement date 
of the major disaster shall be accepted as timely by the State agency if 
the applicant had good cause for the late filing, but in no event shall 
an initial application be accepted by the State agency if it is filed 
after the expiration of the Disaster Assistance Period. If the 30th day 
falls on a Saturday, Sunday, or a legal holiday in the major disaster 
area, the 30-day time limit shall be extended to the next business day.
    (b) Weekly applications. Applications for DUA for weeks of 
unemployment shall be filed with respect to the individual's applicable 
State at the times and in the manner as claims for regular compensation 
are filed under the applicable State law, and on forms prescribed by the 
Secretary which shall be furnished to the individual by the State 
agency.
    (c) Filing in person. (1) Except as provided in paragraph (c)(2) of 
this section, all applications for DUA, including initial applications, 
shall be filed in person.
    (2) Whenever an individual has good cause for not filing any 
application for DUA in person, the application shall be filed at such 
time, in such place, and in such a manner as directed by the State 
agency and in accordance with this part and procedures prescribed by the 
Secretary.
    (d) IBPP. The ``Interstate Benefit Payment Plan'' shall apply, where 
appropriate, to an individual filing applications for DUA.
    (e) Wage combining. The ``Interstate Arrangement for Combining 
Employment and Wages'' (part 616 of this chapter) shall apply, where 
appropriate, to an individual filing applications for DUA: Provided, 
That the ``Paying State'' shall be the applicable State for the 
individual as prescribed in Sec. 625.12.
    (f) Procedural requirements. (1) The procedures for reporting and 
filing applications for DUA shall be consistent with this part, and with 
the Secretary's ``Standard for Claim Filing, Claimant Reporting, Job 
Finding and Employment Services,'' Employment Security Manual. Part V, 
sections 5000 et seq. (appendix A of this part), insofar as such 
standard is not inconsistent with this part.
    (2) The provisions of the applicable State law which apply hereunder 
to applications for and the payment of DUA shall be applied consistent 
with the requirements of title III of the Social Security Act and the 
Federal Unemployment Tax Act which are pertinent in the case of regular 
compensation, including but not limited to those standards and 
requirements specifically referred to in the provisions of this part.

(Approved by the Office of Management and Budget under control number 
1205-0051)

(Pub. L. No. 96-511)

[42 FR 46712, Sept. 16, 1977, as amended at 49 FR 18295, Apr. 30, 1984; 
55 FR 555, Jan. 5, 1990]



Sec. 625.9  Determinations of entitlement; notices to individual.

    (a) Determination of initial application. (1) The State agency shall 
promptly, upon the filing of an initial application for DUA, determine 
whether the individual is eligible, and if the individual is found to be 
eligible, the weekly amount of DUA payable to the individual and the 
period during which DUA is payable.
    (2) An individual's eligibility for DUA shall be determined, where a 
reliable record of employment, self-employment and wages is not 
obtainable, on the basis of an affidavit submitted to the State agency 
by the individual, and on a form prescribed by the Secretary which shall 
be furnished to the individual by the State agency.
    (b) Determinations of weekly applications. The State agency shall 
promptly, upon the filing of an application for a payment of DUA with 
respect to a week of unemployment, determine whether the individual is 
entitled to a payment of DUA with respect to that week, and, if 
entitled, the amount of DUA to which the individual is entitled.
    (c) Redetermination. The provisions of the applicable State law 
concerning the right to request, or authority to

[[Page 166]]

undertake, reconsideration of a determination pertaining to regular 
compensation under the applicable State law shall apply to 
determinations pertaining to DUA.
    (d) Notices to individual. The State agency shall give notice in 
writing to the individual, by the most expeditious method, of any 
determination or redetermination of an initial application, and of any 
determination of an application for DUA with respect to a week of 
unemployment which denies DUA or reduces the weekly amount initially 
determined to be payable, and of any redetermination of an application 
for DUA with respect to a week of unemployment. Each notice of 
determination or redetermination shall include such information 
regarding the determination or redetermination and notice of right to 
reconsideration or appeal, or both, as is furnished with written notices 
of determination and written notices of redeterminations with respect to 
claims for regular compensation.
    (e) Promptness. Full payment of DUA when due shall be made with the 
greatest promptness that is administratively feasible.
    (f) Secretary's Standard. The procedures for making determinations 
and redeterminations, and furnishing written notices of determinations, 
redeterminations, and rights of appeal to individuals applying for DUA, 
shall be consistent with this part and with the Secretary's ``Standard 
for Claim Determinations--Separation Information,'' Employment Security 
Manual. Part V, sections 6010 et seq. (Appendix B of this part).

(Approved by the Office of Management and Budget under control number 
1205-0051)

(Pub. L. No. 96-511)

[42 FR 46712, Sept. 16, 1977, as amended at 49 FR 18295, Apr. 30, 1984; 
55 FR 555, Jan. 5, 1990]



Sec. 625.10  Appeal and review.

    (a) States of the United States. (1) Any determination or 
redetermination made pursuant to Sec. 625.9, by the State agency of a 
State (other than the State agency of the Territory of Guam, American 
Samoa, Commonwealth of the Northern Mariana Islands, Federated States of 
Micronesia, Republic of the Marshall Islands, or the Trust Territory of 
the Pacific Islands) may be appealed by the applicant in accordance with 
the applicable State law to the first-stage administrative appellate 
authority in the same manner and to the same extent as a determination 
or redetermination of a right to regular compensation may be appealed 
under the applicable State law, except that the period for appealing 
shall be 60 days from the date the determination or redetermination is 
issued or mailed instead of the appeal period provided for in the 
applicable State law. Any decision on a DUA first-stage appeal must be 
made and issued within 30 days after receipt of the appeal by the State.
    (2) Notice of the decision on appeal, and the reasons therefor, 
shall be given to the individual by delivering the notice to such 
individual personally or by mailing it to the individual's last known 
address, whichever is most expeditious. The decision shall contain 
information as to the individual's right to review of the decision by 
the appropriate Regional Administrator, Employment and Training 
Administration, if requested within 15 days after the decision was 
mailed or delivered in person to the individual. The notice will include 
the manner of requesting such review, and the complete address of the 
Regional Administrator. Notice of the decision on appeal shall be given 
also to the State agency (with the same notice of right to review) and 
to the appropriate Regional Administrator.
    (b) Guam, American Samoa, and the Trust Territory of the Pacific 
Islands. (1) In the case of an appeal by an individual from a 
determination or redetermination by the State agency of the Territory of 
Guam, American Samoa, Commonwealth of the Northern Mariana Islands, 
Federated States of Micronesia, Republic of the Marshall Islands, or the 
Trust Territory of the Pacific Islands, the individual shall be entitled 
to a hearing and decision in accordance with Sec. 625.30 of this part.
    (2) Notice of the referee's decision, and the reasons therefor, 
shall be given to the individual by delivering the notice to the 
individual personally or by mailing it to the individual's last

[[Page 167]]

known address, whichever is most expeditious. The notice of decision 
shall contain information as to the individual's right to review of the 
decision by the Regional Administrator, Employment and Training 
Administration, for Region IX (San Francisco), and the manner of 
obtaining such review, including the address of the Regional 
Administrator. Notice of the decision on appeal shall be given also to 
the State agency and to the Regional Administrator.
    (c) Review by Regional Administrator. (1) The appropriate Regional 
Administrator, Employment and Training Administration, upon request for 
review by an applicant or the State agency shall, or upon the Regional 
Administrator's own motion may, review a decision on appeal issued 
pursuant to paragraph (a) or (b) of this section.
    (2) Any request for review by an applicant or a State agency shall 
be filed, and any review on the Regional Administrator's own motion 
shall be undertaken, within 15 days after notice of the decision on 
appeal was delivered or mailed to the individual.
    (3)(i) A request for review by an individual may be filed with the 
appropriate State agency, which shall forward the request to the 
appropriate Regional Administrator, Employment and Training 
Administration, or may be filed directly with the appropriate Regional 
Administrator.
    (ii) A request for review by a State agency shall be filed with the 
appropriate Regional Administrator, and a copy shall be served on the 
individual by delivery to the individual personally or by mail to the 
individual's last known address.
    (iii) When a Regional Administrator undertakes a review of a 
decision on the Regional Administrator's own motion, notice thereof 
shall be served promptly on the individual and the State agency.
    (iv) Whenever review by a Regional Administrator is undertaken 
pursuant to an appeal or on the Regional Administrator's own motion, the 
State agency shall promptly forward to the Regional Administrator the 
entire record of the case.
    (v) Where service on the individual is required by paragraph 
(c)(3)(ii) of this section, adequate proof of service shall be furnished 
for the record before the Regional Administrator, and be a condition of 
the Regional Administrator undertaking review pursuant to this 
paragraph.
    (4) The decision of the Regional Administrator on review shall be 
rendered promptly, and not later than the earlier of--
    (i) 45 days after the appeal is received or is undertaken by the 
Regional Administrator, or
    (ii) 90 days from the date the individual's appeal from the 
determination or redetermination was received by the State agency.
    (5) Notice of the Regional Administrator's decision shall be mailed 
promptly to the last known address of the individual, to the State 
agency of the applicable State, and to the Director, Unemployment 
Insurance Service. The decision of the Regional Administrator shall be 
the final decision under the Act and this part, unless there is further 
review by the Assistant Secretary as provided in paragraph (d) of this 
section.
    (d) Further review by the Assistant Secretary. (1) The Assistant 
Secretary for Employment and Training on his own motion may review any 
decision by a Regional Administrator issued pursuant to paragraph (c) of 
this section.
    (2) Notice of a motion for review by the Assistant Secretary shall 
be given to the applicant, the State agency of the applicable State, the 
appropriate Regional Administrator, and the Director, Unemployment 
Insurance Service.
    (3) When the Regional Administrator and the State agency are 
notified of the Assistant Secretary's motion for review, they shall 
forward all records in the case to the Assistant Secretary.
    (4) Review by the Assistant Secretary shall be solely on the record 
in the case, any other written contentions or evidence requested by the 
Assistant Secretary, and any further evidence or arguments offered by 
the individual, the State agency, the Regional Administrator, or the 
Director, Unemployment Insurance Service, which are mailed to the 
Assistant Secretary within 15 days after mailing the notice of motion 
for review.

[[Page 168]]

    (5) Upon review of a case under this paragraph, the Assistant 
Secretary may affirm, modify, or reverse the decision of the Regional 
Administrator, and may remand the case for further proceedings and 
decision in accordance with the Assistant Secretary's decision.
    (6) The decision of the Assistant Secretary shall be made promptly, 
and notice thereof shall be sent to the applicant, the State agency, the 
Regional Administrator, and the Director, Unemployment Insurance 
Service.
    (7) The decision of the Assistant Secretary shall be final and 
conclusive, and binding on all interested parties, and shall be a 
precedent applicable throughout the States.
    (e) Procedural requirements. (1) All decisions on first-stage 
appeals from determinations or redeterminations by the State agencies 
must be made within 30 days of the appeal; therefore, the Secretary's 
``Standard for Appeals Promptness-Unemployment Compensation'' in part 
650 of this chapter shall not apply to the DUA program.
    (2) The provisions on right of appeal and opportunity for hearing 
and review with respect to applications for DUA shall be consistent with 
this part and with sections 303(a)(1) and 303(a)(3) of the Social 
Security Act, 42 U.S.C. 503(a)(1) and 503(a)(3).
    (3) Any petition or other matter required to be filed within a time 
limit under this section shall be deemed to be filed at the time it is 
delivered to an appropriate office, or at the time of the postmark if it 
is mailed via the United States Postal Service to an appropriate office.
    (4) If any limited time period specified in this section ends on a 
Saturday, Sunday, or a legal holiday in the major disaster area, the 
time limit shall be extended to the next business day.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 555, Jan. 5, 1990; 56 
FR 22805, May 16, 1991]



Sec. 625.11  Provisons of State law applicable.

    The terms and conditions of the State law of the applicable State 
for an individual, which apply to claims for, and the payment of regular 
compensation, shall apply to applications for, and the payment of, DUA 
to each such individual, only as specifically set forth in the 
provisions of this part.



Sec. 625.12  The applicable State for an individual.

    (a) Applicable State. The applicable State for an individual shall 
be that State in which the individual's unemployment is the result of a 
major disaster.
    (b) Limitation. DUA is payable to an individual only by an 
applicable State as determined pursuant to paragraph (a) of this 
section, and--
    (1) Only pursuant to an Agreement entered into pursuant to the Act 
and this part, and with respect to weeks in which the Agreement is in 
effect; and
    (2) Only with respect to weeks of unemployment that begin during a 
Disaster Assistance Period.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 556, Jan. 5, 1990]



Sec. 625.13  Restrictions on entitlement; disqualification.

    (a) Income reductions. The amount of DUA payable to an individual 
for a week of unemployment, as computed pursuant to Sec. 625.6, shall 
be reduced by the amount of any of the following that an individual has 
received for the week or would receive for the week if the individual 
filed a claim or application therefor and took all procedural steps 
necessary under the appropriate law, contract, or policy to receive such 
payment:
    (1) Any benefits or insurance proceed from any source not defined as 
``compensation'' under Sec. 625.2(d) for loss of wages due to illness 
or disability;
    (2) A supplemental unemployment benefit pursuant to a collective 
bargaining agreement.
    (3) Private income protection insurance;
    (4) Any workers' compensation by virtue of the death of the head of 
the household as the result of the major disaster in the major disaster 
area, prorated by weeks, if the individual has become the head of the 
household and is seeking suitable work because the head of the household 
died as the result of the major disaster in the major disaster area; and
    (5) The prorated amount of a retirement pension or annuity under a 
public

[[Page 169]]

or private retirement plan or system, prorated, where necessary, by 
weeks, but only if, and to the extent that, such amount would be 
deducted from regular compensation payable under the applicable State 
law.
    (6) The prorated amount of primary benefits under title II of the 
Social Security Act, but only to the extent that such benefits would be 
deduced from regular compensation if payable to the individual under the 
applicable State law.
    (b) Disqualification. (1) An individual shall not be entitled to DUA 
for any week after the week in which the individual is reemployed in a 
suitable position.
    (2) An individual who refuses without good cause to accept a bona 
fide offer of reemployment in a position suitable to the individual, or 
to investigate or accept a referral to a position which is suitable to 
and available to the individual, shall not be entitled to DUA with 
respect to the week in which such refusal occurs or in any subsequent 
week in the Disaster Assistance Period. For the purposes of this 
paragraph, a position shall not be deemed to be suitable for an 
individual if the circumstances present any unusual risk to the health, 
safety, or morals of the individual, if it is impracticable for the 
individual to accept the position, or if acceptance for the position 
would, as to the individual, be inconsistent with any labor standard in 
section 3304(a)(5) of the Federal Unemployment Tax Act, 26 U.S.C. 
3304(a)(5), or the comparable provisions of the applicable State law.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 556, Jan. 5, 1990]



Sec. 625.14  Overpayments; disqualification for fraud.

    (a) Finding and repayment. If the State agency of the applicable 
State finds that an individual has received a payment of DUA to which 
the individual was not entitled under the Act and this part, whether or 
not the payment was due to the individual's fault or misrepresentation, 
the individual shall be liable to repay to the applicable State the 
total sum of the payment to which the individual was not entitled, and 
the State agency shall take all reasonable measures authorized under any 
State law or Federal law to recover for the account of the United States 
the total sum of the payment to which the individual was not entitled.
    (b) Recovery by offset. (1) The State agency shall recover, insofar 
as is possible, the amount of any outstanding overpayment of DUA made to 
the individual by the State, by deductions from any DUA payable to the 
individual under the Act and this part, or from any compensation payable 
to the individual under any Federal unemployment compensation law 
administered by the State agency, or from any assistance or allowance 
payable to the individual with respect to unemployment under any other 
Federal law administered by the State agency.
    (2) The State agency shall also recover, insofar as possible, the 
amount of any outstanding overpayment of DUA made to the individual by 
another State, by deductions from any DUA payable by the State agency to 
the individual under the Act and this part, or from any compensation 
payable to the individual under any Federal unemployment compensation 
law administered by the State agency, or from any assistance or 
allowance payable to the individual with respect to unemployment under 
any other Federal law administered by the State agency.
    (3) If the State has in effect an agreement to implement the cross-
program offset provisions of section 303(g)(2) of the Social Security 
Act (42 U.S.C. 503(g)(2)), the State shall apply the provisions of such 
agreement to the recovery of outstanding DUA overpayments.
    (c) Debts due the United States. DUA payable to an individual shall 
be applied by the State agency for the recovery by offset of any debt 
due to the United States from the individual, but shall not be aplied or 
used by the State agency in any manner for the payment of any debt of 
the individual to any State or any other entity or person.
    (d) Recovered overpayments. Overpayments recovered in any manner 
shall be credited or returned, as the case may be, to the appropriate 
account of the United States.
    (e) Application of State law. Any provision of State law authorizing 
waiver of recovery of overpayments of compensation shall not be 
applicable to DUA.

[[Page 170]]

    (f) Final decision. Recovery of any overpayment of DUA shall not be 
enforced by the State agency until the determination establishing the 
overpayment has become final, or if appeal is taken from the 
determination, until the decision after opportunity for a fair hearing 
has become final.
    (g) Procedural requirements. (1) The provisions of paragraphs (c), 
(d), and (f) of Sec. 625.9 shall apply to determinations and 
redeterminations made pursuant to this section.
    (2) The provisions of Sec. 625.10 shall apply to determinations and 
redeterminations made pursuant to this section.
    (h) Fraud detection and prevention. Provisions in the procedures of 
each State with respect to detection and prevention of fraudulent 
overpayments of DUA shall be, as a minimum, commensurate with the 
procedures adopted by the State with respect to regular compensation and 
consistent with the Secretary's ``Standard for Fraud and Overpayment 
Detection,'' Employment Security Manual, part V, sections 7510 et seq. 
(Appendix C of this part).
    (i) Disqualification for fraud. Any individual who, with respect to 
a major disaster, makes or causes another to make a false statement or 
misrepresentation of a material fact, knowing it to be false, or 
knowingly fails or causes another to fail to disclose a material fact, 
in order to obtain for the individual or any other person a payment of 
DUA to which the individual or any other person is not entitled, shall 
be disqualified as follows:
    (1) If the false statement, misrepresentation, or nondisclosure 
pertains to an initial application for DUA--
    (i) The individual making the false statement, misrepresentation, or 
nondisclosure shall be disqualified from the receipt of any DUA with 
respect to that major disaster; and
    (ii) If the false statement, misrepresentation, or nondisclosure was 
made on behalf of another individual, and was known to such other 
individual to be a false statement, misrepresentation, or nondisclosure, 
such other individual shall be disqualified from the receipt of any DUA 
with respect to that major disaster; and
    (2) If the false statement, misrepresentation, or nondisclosure 
pertains to a week for which application for a payment of DUA is made--
    (i) The individual making the false statement, misrepresentation, or 
nondisclosure shall be disqualified from the receipt of DUA for that 
week and the first two compensable weeks in the Disaster Assistance 
Period that immediately follow that week, with respect to which the 
individual is otherwise entitled to a payment of DUA; and
    (ii) If the false statement, misrepresentation, or nondisclosure was 
made on behalf of another individual, and was known to such other 
individual to be a false statement, misrepresentation, or nondisclosure, 
such other individual shall be disqualified from the receipt of DUA for 
that week and the first two compensable weeks in the Disaster Assistance 
Period that immediately follow that week, with respect to which the 
individual is otherwise entitled to a payment of DUA.
    (j) Criminal penalties. The provisions of this section on recovery 
of overpayments and disqualification for fraudulently claiming or 
receiving any DUA to which an individual was not entitled under the Act 
and this part shall be in addition to and shall not preclude any 
applicable criminal prosecution and penalties under State or Federal 
law.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 556, Jan. 5, 1990]



Sec. 625.15  Inviolate rights to DUA.

    Except as specifically provided in this part, the right of 
individuals to DUA shall be protected in the same manner and to the same 
extent as the rights of persons to regular unemployment compensation are 
protected under the applicable State law. Such measures shall include 
protection of applicants for DUA from waiver, release, assignment, 
pledge, encumbrance, levy, execution, attachment, and garnishment, of 
their rights to DUA. In the same manner and to the same extent, 
individuals shall be protected from discrimination and obstruction in 
regard to seeking, applying for and receiving any right to DUA.

[[Page 171]]



Sec. 625.16  Recordkeeping; disclosure of information.

    (a) Recordkeeping. Each State agency will make and maintain records 
pertaining to the administration of the Act as the Secretary requires, 
and will make all such records available for inspection, examination, 
and audit by such Federal officials or employees as the Secretary may 
designate or as may be required by law.
    (b) Disclosure of information. Information in records made and 
maintained by a State agency in administering the Act shall be kept 
confidential, and information in such records may be disclosed only in 
the same manner and to the same extent as information with respect to 
regular compensation and the entitlement of individuals thereto may be 
disclosed under the applicable State law, and consistently with section 
303(a)(1) of the Social Security Act, 42 U.S.C. 503(a)(1). This 
provision on the confidentiality of information obtained in the 
administration of the Act shall not apply, however, to the United States 
Department of Labor, or in the case of information, reports and studies 
requested pursuant to Sec. 625.19, or where the result would be 
inconsistent with the Freedom of Information Act (5 U.S.C. 552), the 
Privacy Act of 1974 (5 U.S.C. 552a), or regulations of the United States 
Department of Labor promulgated thereunder.



Sec. 625.17  Announcement of the beginning of a Disaster Assistance Period.

    Whenever a major disaster is declared in a State, the State agency 
shall promptly announce throughout the major disaster area by all 
appropriate news media that individuals who are unemployed as the result 
of the major disaster may be entitled to DUA; that they should file 
initial applications for DUA as soon as possible, but not later than the 
30th day after the announcement date; the beginning date of the Disaster 
Assistance Period; and where individuals may obtain further information 
and file applications for DUA.



Sec. 625.18  Public access to Agreements.

    The State agency of a State will make available to any individual or 
organization a true copy of the Agreement with the State for inspection 
and copying. Copies of an Agreement may be furnished on request to any 
individual or organization upon payment of the same charges, if any, as 
apply to the furnishing of copies of other rec ords of the State agency.



Sec. 625.19  Information, reports and studies.

    (a) Routine responses. State agencies shall furnish to the Secretary 
such information and reports and make such studies as the Secretary 
decides are necessary or appropriate for carrying out the purposes of 
the Act and this part.
    (b) Final Report. In addition to such other reports as may be 
required by the Secretary, within 60 days after all payments of Disaster 
Unemployment Assistance as the result of a major disaster in the State 
have been made, the State agency shall submit a final report to the 
Secretary. A final report shall contain a narrative summary, a 
chronological list of significant events, pertinent statistics about the 
Disaster Unemployment Assistance provided to disaster victims, brief 
statements of major problems encountered, discussion of lessons learned, 
and suggestions for improvement of the program during future major 
disasters.

(Approved by the Office of Management and Budget under control number 
1205-0051)

(Pub. L. No. 96-511)

[15 FR 5886, Aug. 31, 1950; 23 FR 1267, Mar. 1, 1958, as amended at 49 
FR 18295, Apr. 30, 1984]



Sec. 625.20  Saving clause.

    The regulations in this part do not apply to applications, 
determinations, hearings, or other administrative or judicial 
proceedings, with respect to any major disaster declared prior to 
November 23, 1988, and such applications, determinations, hearings, or 
other administrative or judicial proceeding shall remain subject to the 
Act and the Regulations in this part issued thereunder which were in 
effect prior to that date.

[42 FR 46712, Sept. 16, 1977, as amended at 55 FR 557, Jan. 5, 1990]

[[Page 172]]



Sec. 625.30  Appeal Procedures for Guam, American Samoa, Commonwealth 

of the Northern Mariana Islands, Federated States of Micronesia, 
Republic of the Marshall 
          Islands, and the Trust Territory of the Pacific Islands.

    (a) Designation of referee. The Director of the Unemployment 
Insurance Service shall designate a referee of a State agency to hear 
and decide appeals under this section from determinations and 
redeterminations by the State agencies of the Territory of Guam, 
American Samoa, Commonwealth of the Northern Mariana Islands, Federated 
States of Micronesia, Republic of the Marshall Islands, and the Trust 
Territory of the Pacific Islands.
    (b) Appeals to referee. (1) A DUA applicant may appeal from a 
determination or redetermination issued by the State agency of the 
Territory of Guam, American Samoa, Commonwealth of the Northern Mariana 
Islands, Federated States of Micronesia, Republic of the Marshall 
Islands, or the Trust Territory of the Pacific Islands within 60 days 
after the mailing of notice and a copy of such determination or 
redetermination to such applicant's last known address, or in the 
absence of mailing within 60 days after delivery in person thereof to 
such applicant. The appeal shall be in writing and may be filed with any 
office of the State agency.
    (2) Notice that an appeal has been filed may be given or mailed, in 
the discretion of the referee, to any person who has offered or is 
believed to have evidence with respect to the claim.
    (3) An appeal shall be promptly scheduled and heard, in order that a 
decision on the appeal can be issued within 30 days after receipt of the 
appeal by the State agency. Written notice of hearing, specifying the 
time and place thereof and those questions known to be in dispute, shall 
be given or mailed to the applicant, the State agency, and any person 
who has offered or is believed to have evidence with respect to the 
claim 7 days or more before the hearing, except that a shorter notice 
period may be used with the consent of the applicant.
    (c) Conduct of hearings. Hearings before the referee shall be 
informal, fair, and impartial, and shall be conducted in such manner as 
may be best suited to determine the DUA applicants' right to 
compensation. Hearings shall be open to the public unless sufficient 
cause for a closed hearing is shown. The referee shall open a hearing by 
ascertaining and summarizing the issue or issues involved in the appeal. 
The applicant may examine and cross-examine witnesses, inspect 
documents, and explain or rebut any evidence. An opportunity to present 
argument shall be afforded such applicant, and such argument shall be 
made part of the record. The referee shall give such applicant, if not 
represented by counsel or other representative, every assistance that 
does not interfere with the impartial discharge of the referee's duties. 
The referee may examine such applicant and other witnesses to such 
extent as the referee deems necessary. Any issue involved in the claim 
shall be considered and passed upon even though such issue was not set 
forth as a ground of appeal.
    (d) Evidence. Oral or written evidence of any nature, whether or not 
conforming to the legal rules of evidence, may be accepted. Any official 
record of the State agency, including reports submitted in connection 
with administration of the DUA program, may be included in the record if 
the applicant is given an opportunity to examine and rebut the same. A 
written statement under oath or affirmation may be accepted when it 
appears impossible or unduly burdensome to require the attendance of a 
witness, but a DUA applicant adversely affected by such a statement must 
be given the opportunity to examine such statement, to comment on or 
rebut any or all portions thereof, and whenever possible to cross-
examine a witness whose testimony has been introduced in written form by 
submitting written questions to be answered in writing.
    (e) Record. All oral testimony before the referee shall be taken 
under oath or affirmation and a transcript thereof

[[Page 173]]

shall be made and kept. Such transcript together with all exhibits, 
papers, and requests filed in the proceeding shall constitute the record 
for decision.
    (f) Withdrawal of appeal. A DUA applicant who has filed an appeal 
may withdraw such appeal with the approval of the referee.
    (g) Nonappearance of DUA applicant. Failure of a DUA applicant to 
appear at a hearing shall not result in a decision being automatically 
rendered against such applicant. The referee shall render a decision on 
the basis of whatever evidence is properly before him/her unless there 
appears to be a good reason for continuing the hearing. An applicant who 
fails to appear at a hearing with respect to his/her appeal may within 
seven days thereafter petition for a reopening of the hearing. Such 
petition shall be granted if it appears to the referee that such 
applicant has shown good cause for his/her failure to attend.
    (h) Notice of referee's decision and further review--(1) Decision. A 
copy of the referee's decision, which shall include findings and 
conclusions, shall promptly be given or mailed to the applicant, the 
State agency, and to the Regional Administrator, Employment and Training 
Administration, for Region IX (San Francisco). The decision of the 
referee shall be accompanied by an explanation of the right of such 
applicant or State agency to request review by the Regional 
Administrator and the time and manner in which such review may be 
instituted, as provided in paragraph (a)(2) of Sec. 625.10.
    (2) Time limit for decision. A decision on an appeal to a referee 
under this section shall be made and issued by the referee not later 
than 30 days after receipt of the appeal by the State agency.
    (3) Further review. Further review by the Regional Administrator or 
the Assistant Secretary with respect to an appeal under this section 
shall be in accordance with paragraphs (c) and (d) of Sec. 625.10.
    (i) Consolidation of appeals. The referee may consolidate appeals 
and conduct joint hearings thereon where the same or substantially 
similar evidence is relevant and material to the matters in issue. 
Reasonable notice of consolidation and the time and place of hearing 
shall be given or mailed to the applicants or their representatives, the 
State agency, and to persons who have offered or are believed to have 
evidence with respect to the DUA claims.
    (j) Representation. A DUA applicant may be represented by counsel or 
other representative in any proceedings before the referee or the 
Regional Administrator. Any such representative may appear at any 
hearing or take any other action which such applicant may take under 
this part. The referee, for cause, may bar any person from representing 
an applicant, in which event such action shall be set forth in the 
record. No representative shall charge an applicant more than an amount 
fixed by the referee for representing the applicant in any proceeding 
under this section.
    (k) Postponement, continuance, and adjournment of hearings. A 
hearing before the referee shall be postponed, continued, or adjourned 
when such action is necessary to afford a DUA applicant reasonable 
opportunity for a fair hearing. In such case notice of the subsequent 
hearing shall be given to any person who received notice of the prior 
hearing.
    (l) Information from agency records. Information shall be available 
to a DUA applicant, either from the records of the State agency or as 
obtained in any proceeding herein provided for, to the extent necessary 
for proper presentation of his/her case. All requests for information 
shall state the nature of the information desired as clearly as possible 
and shall be in writing unless made at a hearing.
    (m) Filing of decisions. Copies of all decisions of the referee 
shall be kept on file at his/her office or agency for at least 3 years.

[55 FR 557, Jan. 5, 1990, as amended at 56 FR 22805, May 16, 1991]

[[Page 174]]

 Appendix A to Part 625--Standard for Claim Filing, Claimant Reporting, 
                  Job Finding, and Employment Services

         Employment Security Manual (Part V, Sections 5000-5004)

  5000 Standard for Claim Filing, Claimant Reporting, Job Finding, and 
                           Employment Services

    A. Federal law requirements. Section 3304(a)(1) of the Federal 
Unemployment Tax Act and section 303(a)(2) of the Social Security Act 
require that a State law provide for: ``Payment of unemployment 
compensation solely through public employment offices or such other 
agencies as the Secretary may approve.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law provide 
for: ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * *''
    Section 303(a)(1) of the Social Security Act requires that the State 
law provide for: ``Such methods of administration . . . as are found by 
the Secretary to be reasonably calculated to insure full payment of 
unemployment compensation when due.''
    B. Secretary's interpretation of federal law requirements: 1. The 
Secretary interprets section 3304(a)(1) of the Federal Unemployment Tax 
Act and section 303(a)(2) of the Social Security Act to require that a 
State law provide for payment of unemployment compensation solely 
through public employment offices or claims offices administered by the 
State employment security agency if such agency provides for such 
coordination in the operations of its public employment offices and 
claims offices as will insure (a) the payment of benefits only to 
individuals who are unemployed and who are able to work and available 
for work, and (b) that individuals claiming unemployment compensation 
(claimants) are afforded such placement and other employment services as 
are necessary and appropriate to return them to suitable work as soon as 
possible.
    2. The Secretary interprets all the above sections to require that a 
State law provide for: a. Such contact by claimants with public 
employment offices or claims offices or both, (1) as will reasonably 
insure the payment of unemployment compensation only to individuals who 
are unemployed and who are able to work and available for work, and (2) 
that claimants are afforded such placement and other employment services 
as are necessary and appropriate to facilitate their return to suitable 
work as soon as possible; and b. Methods of administration which do not 
unreasonably limit the opportunity of individuals to establish their 
right to unemployment compensation due under such State law.

   5001 Claim Filing and Claimant Reporting Requirements Designed to 
                   Satisfy Secretary's Interpretation

    A. Claim filing--total or part-total unemployment: 1. Individuals 
claiming unemployment compensation for total or part-total unemployment 
are required to file a claim weekly or biweekly, in person or by mail, 
at a public employment office or a claims office (these terms include 
offices at itinerant points) as set forth below.
    2. Except as provided in paragraph 3, a claimant is required to file 
in person: a. His new claim with respect to a benefit year, or his 
continued claim for a waiting week or for his first compensable week of 
unemployment in such year; and b. Any other claim, when requested to do 
so by the claims personnel at the office at which he files his claim(s) 
because questions about his right to benefits are raised by 
circumstances such as the following:
    (1) The conditions or circumstances of his separation from 
employment;
    (2) The claimant's answers to questions on mail claim(s) indicate 
that he may be unable to work or that there may be undue restrictions on 
his availability for work or that his search for work may be inadequate 
or that he may be disqualified;
    (3) The claimant's answers to questions on mail claims create 
uncertainty about his credibility or indicate a lack of understanding of 
the applicable requirements; or
    (4) The claimant's record shows that he has previously filed a 
fraudulent claim.
    In such circumstances, the claimant is required to continue to file 
claims in person each week (or biweekly) until the State agency 
determines that filing claims in person is no longer required for the 
resolution of such questions.
    3. A claimant must be permitted to file a claim by mail in any of 
the following circumstances: a. He is located in an area requiring the 
expenditure of an unreasonable amount of time or money in traveling to 
the nearest facility established by the State agency for filing claims 
in person; b. Conditions make it impracticable for the agency to take 
claims in person; c. He has returned to full-time work on or before the 
scheduled date for his filing a claim, unless the agency makes provision 
for in-person filing at a time and place that does not interfere with 
his employment; d. The agency finds that he has good cause for failing 
to file a claim in person.
    4. A claimant who has been receiving benefits for partial 
unemployment may continue to file claims as if he were a partially 
unemployed worker for the first four consecutive weeks of total or part-
total unemployment

[[Page 175]]

immediately following his period of partial unemployment so long as he 
remains attached to his regular employer.
    B. Claim filing--partial unemployment. Each individual claiming 
unemployment compensation for a week (or other claim period) during 
which, because of lack of work, he is working less than his normal 
customary full-time hours for his regular employer and is earning less 
than the earnings limit provided in the State law, shall not be required 
to file a claim for such week or other claim period earlier than 2 weeks 
from the date that wages are paid for such claim period or, if a low 
earnings report is required by the State law, from the date the employer 
furnished such report to the individual. State agencies may permit 
claims for partial unemployment to be filed either in person or by mail, 
except that in the circumstances set forth in section A 3, filing by 
mail must be permitted, and in the circumstances set forth in section A 
2 b, filing in person may be required.

   5002 Requirement for Job Finding, Placement, and other Employment 
         Services Designed to Satisfy Secretary's Interpretation

    A. Claims personnel are required to assure that each claimant is 
doing what a reasonable individual in his circumstances would do to 
obtain suitable work.
    B. In the discretion of the State agency: 1. The claims personnel 
are required to give each claimant such necessary and appropriate 
assistance as they reasonably can in finding suitable work and at their 
discretion determine when more complete placement and employment 
services are necessary and appropriate for a claimant; and if they 
determine more complete services are necessary and appropriate, the 
claims personnel are to refer him to employment service personnel in the 
public employment office in which he has been filing claim(s), or, if he 
has been filing in a claims office, in the public employment office most 
accessible to him; or
    2. All placement and employment services are required to be afforded 
to each claimant by employment service personnel in the public 
employment office most accessible to him in which case the claims 
personnel in the office in which the claimant files his claim are to 
refer him to the employment service personnel when placement or other 
employment services are necessary and appropriate for him.
    C. The personnel to whom the State agency assigns the 
responsibilities outlined in paragraph B above are required to give 
claimants such job-finding assistance, placement, and other employment 
services as are necessary and appropriate to facilitate their return to 
suitable work as soon as possible.
    In some circumstances, no such services or only limited services may 
be required. For example, if a claimant is on a short-term temporary 
layoff with a fixed return date, the only service necessary and 
appropriate to be given to him during the period of the layoff is a 
referral to suitable temporary work if such work is being performed in 
the labor market area.
    Similarly, claimants whose unemployment is caused by a labor dispute 
presumably will return to work with their employer as soon as the labor 
dispute is settled. They generally do not need services, nor do 
individuals in occupations where placement customarily is made by other 
nonfee charging placement facilities such as unions and professional 
associations.
    Claimants who fall within the classes which ordinarily would require 
limited services or no services shall, if they request placement and 
employment services, be afforded such services as are necessary and 
appropriate for them to obtain suitable work or to achieve their 
reasonable employment goals.
    On the other hand, a claimant who is permanently separated from his 
job is likely to require some services. He may need only some direction 
in how to get a job; he may need placement services if he is in an 
occupation for which there is some demand in the labor market area; if 
his occupation is outdated, he may require counseling and referral to a 
suitable training course. The extent and character of the services to be 
given any particular claimant may change with the length of his 
unemployment and depend not only on his own circumstances and 
conditions, but also on the condition of the labor market in the area.
    D. Claimants are required to report to employment service personnel, 
as directed, but such personnel and the claims personnel are required to 
so arrange and coordinate the contracts required of a claimant as not to 
place an unreasonable burden on him or unreasonably limit his 
opportunity to establish his rights to compensation. As a general rule, 
a claimant is not required to contact in person claims personnel or 
employment service personnel more frequently than once a week, unless he 
is directed to report more frequently for a specific service such as 
referral to a job or a training course or counseling which cannot be 
completed in one visit.
    E. Employment service personnel are required to report promptly to 
claims personnel in the office in which the claimant files his claim(s): 
(1) his failure to apply for or accept work to which he was referred by 
such personnel or when known, by any other nonfee-charging placement 
facility such as a union or a professional association; and (2) any 
information which becomes available to it that may have a bearing on the 
claimant's ability to work or availability for work, or on the 
suitability of work to which he was referred or which was offered to 
him.

[[Page 176]]

             5004 Evaluation of Alternative State Provisions

    If the State law provisions do not conform to the ``suggested State 
law requirements'' set forth in sections 5001 and 5002, but the State 
law contains alternative provisions, the Manpower Administrator, in 
collaboration with the State agency, will study the actual or 
anticipated affect of the alternative provisions. If the Manpower 
Administrator concludes that the alternative provisions satisfy the 
requirements of the Federal law as construed by the Secretary (see 
section 5000 B) he will so notify the State agency. If he does not so 
conclude, he will submit the matter to the Secretary. If the Secretary 
concludes that the alternative provisions satisfy such requirements, the 
State agency will be so notified. If the Secretary concludes that there 
is a question as to whether the alternative provisions satisfy such 
requirements, the State agency will be advised that unless the State law 
provisions are appropriately revised, a notice of hearing will be issued 
as required by the Code of Federal Regulations, title 20, section 601.5.

[55 FR 558, Jan. 5, 1990]

 Appendix B to Part 625--Standard for Claim Determinations--Separation 
                               Information

         Employment Security Manual (Part V, Sections 6010-6015)

   6010-6019 Standard for Claim Determinations--Separation Information

    6010 Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for: ``Such 
methods of administration . . . as are found by the Secretary to be 
reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 303(a)(3) of the Social Security Act requires that a State 
law include provision for: ``Opportunity for a fair hearing before an 
impartial tribunal, for all individuals whose claims for unemployment 
compensation are denied.''
    Section 3304(a)(4) of the Federal Unemployment Tax Act and section 
303(a)(5) of the Social Security Act require that a State law include 
provision for: ``Expenditure of all money withdrawn from an unemployment 
fund of such State, in the payment of unemployment compensation . . . 
.''
    Section 3306(h) of the Federal Unemployment Tax Act defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''
    6011 Secretary's Interpretation of Federal Law Requirements. The 
Secretary interprets the above sections to require that a State law 
include provisions which will insure that: A. Individuals who may be 
entitled to unemployment compensation are furnished such information as 
will reasonably afford them an opportunity to know, establish, and 
protect their rights under the unemployment compensation law of such 
State, and
    B. The State agency obtains and records in time for the prompt 
determination and review of benefit claims such information as will 
reasonably insure the payment of benefits to individuals to whom 
benefits are due.
    6012 Criteria for Review of State Law Conformity with Federal 
Requirements. In determining the conformity of a State law with the 
above requirements of the Federal Unemployment Tax Act and the Social 
Security Act as interpreted by the Secretary, the following criteria 
will be applied:
    A. Is it required that individuals who may be entitled to 
unemployment compensation be furnished such information of their 
potential rights to benefits, including the manner and places of filing 
claims, the reasons for determinations, and their rights of appeal, as 
will insure them a reasonable opportunity to know, establish, and 
protect their rights under the law of the State?
    B. Is the State agency required to obtain, in time for prompt 
determination of rights to benefits such information as will reasonably 
insure the payment of benefits to individuals to whom benefits are due?
    C. Is the State agency required to keep records of the facts 
considered in reaching determinations of rights to benefits?

 6013 Claim Determinations Requirements Designed To Meet Department of 
                             Labor Criteria.

    A. Investigation of claims. The State agency is required to obtain 
promptly and prior to a determination of an individual's right to 
benefits, such facts pertaining thereto as will be sufficient reasonably 
to insure the payment of benefits when due.
    This requirement embraces five separate elements:
    1. It is the responsibility of the agency to take the initiative in 
the discovery of information. This responsibility may not be passed on 
to the claimant or the employer. In addition to the agency's own 
records, this information may be obtained from the worker, the employer, 
or other sources. If the information obtained in the first instance 
discloses no essential disagreement and provides a sufficient basis for 
a fair determination, no further investigation is necessary. If the 
information obtained from other sources differs essentially from that 
furnished by the claimant, the agency, in order to meet its 
responsibility, is required to inform the claimant of such information 
from other sources and to afford the claimant an opportunity to furnish 
any further facts he may have.
    2. Evidentiary facts must be obtained as distinguished from ultimate 
facts or conclusions. That a worker was discharged for misconduct is an 
ultimate fact or conclusion; that he destroyed a machine upon which he

[[Page 177]]

was working is a primary or evidentiary fact, and the sort of fact that 
the requirement refers to.
    3. The information obtained must be sufficient reasonably to insure 
the payment of benefits when due. In general, the investigation made by 
the agency must be complete enough to provide information upon which the 
agency may act with reasonable assurance that its decision is consistent 
with the unemployment compensation law. On the other hand, the 
investigation should not be so exhaustive and time-consuming as unduly 
to delay the payment of benefits and to result in excessive costs.
    4. Information must be obtained promptly so that the payment of 
benefits is not unduly delayed.
    5. If the State agency requires any particular evidence from the 
worker, it must give him a reasonable opportunity to obtain such 
evidence.
    B. Recording of facts. The agency must keep a written record of the 
facts considered in reaching its determinations.
    C. Determination notices
    1. The agency must give each claimant a written notice of:
    a. Any monetary determination with respect to his benefit year;
    b. Any determination with respect to purging a disqualification if, 
under the State law, a condition or qualification must be satisfied with 
respect to each week of disqualification; but in lieu of giving written 
notice of each determination for each week in which it is determined 
that the claimant has met the requirements for purging, the agency may 
inform the claimant that he has purged the disqualification for a week 
by notation on his application identification card or otherwise in 
writing.
    c. Any other determination which adversely affects \1\ his rights to 
benefits, except that written notice of determination need not be given 
with respect to:
---------------------------------------------------------------------------

    \1\ A determination ``adversely affects'' claimant's right to 
benefits if it (1) results in a denial to him of benefits (including a 
cancellation of benefits or wage credits or any reduction in whole or in 
part below the weekly or maximum amount established by his monetary 
determination) for any week or other period; or (2) denies credit for a 
waiting week; or (3) applies any disqualification or penalty; or (4) 
determines that he has not satisfied a condition of eligibility, 
requalification for benefits, or purging a disqualification; or (5) 
determines that an overpayment has been made or orders repayment or 
recoupment of any sum paid to him; or (6) applies a previously 
determined overpayment, penalty, or order for repayment or recoupment; 
or (7) in any other way denies claimant a right to benefits under the 
State law.
---------------------------------------------------------------------------

    (1) A week in a benefit year for which the claimant's weekly benefit 
amount is reduced in whole or in part by earnings if, the first time in 
the benefit year that there is such a reduction, he is required to be 
furnished a booklet or leaflet containing the information set forth 
below in paragraph 2 f (1). However, a written notice of determination 
is required if: (a) there is a dispute concerning the reduction with 
respect to any week (e.g., as to the amount computed as the appropriate 
reduction, etc.); or (b) there is a change in the State law (or in the 
application thereof) affecting the reduction; or
    (2) Any week in a benefit year subsequent to the first week in such 
benefit year in which benefits were denied, or reduced in whole or in 
part for reasons other than earnings, if denial or reduction for such 
subsequent week is based on the same reason and the same facts as for 
the first week, and if written notice of determination is required to be 
given to the claimant with respect to such first week, and with such 
notice of determination, he is required to be given a booklet or 
pamphlet containing the information set forth below in paragraphs 2 f 
(2) and 2 h. However, a written notice of determination is required if: 
(a) there is a dispute concerning the denial or reduction of benefits 
with respect to such week; or (b) there is a change in the State law (or 
in the application thereof) affecting the denial or reduction; or (c) 
there is a change in the amount of the reduction except as to the 
balance covered by the last reduction in a series of reductions.
    Note: This procedure may be applied to determinations made with 
respect to any subsequent weeks for the same reason and on the basis of 
the same facts: (a) that claimant is unable to work, unavailable for 
work, or is disqualified under the labor dispute provision; and (b) 
reducing claimant's weekly benefit amount because of income other than 
earnings or offset by reason of overpayment.
    2. The agency must include in written notices of determinations 
furnished to claimants sufficient information to enable them to 
understand the determinations, the reasons therefor, and their rights to 
protest, request reconsideration, or appeal.
    The written notice of monetary determination must contain the 
information specified in the following items (except h) unless an item 
is specifically not applicable. A written notice of any other 
determination must contain the information specified in as many of the 
following items as are necessary to enable the claimant to understand 
the determination and to inform him of his appeal rights. Information 
specifically applicable to the individual claimant must be contained in 
the written notice of determination. Information of general application 
such as (but

[[Page 178]]

not limited to) the explanation of benefits for partial unemployment, 
information as to deductions, seasonality factors, and information as to 
the manner and place of taking an appeal, extension of the appeal 
period, and where to obtain information and assistance may be contained 
in a booklet or leaflet which is given the claimant with his monetary 
determination.
    a. Base period wages. The statement concerning base-period wages 
must be in sufficient detail to show the basis of computation of 
eligibility and weekly and maximum benefit amounts. (If maximum benefits 
are allowed, it may not be necessay to show details of earnings.)
    b. Employer name. The name of the employer who reported the wages is 
necessary so that the worker may check the wage transcript and know 
whether it is correct. If the worker is given only the employer number, 
he may not be able to check the accuracy of the wage transcript.
    c. Explanation of benefit formula--weekly and maximum benefit 
amounts. Sufficient information must be given the worker so that he will 
understand how his weekly benefit amount, including allowances for 
dependents, and his maximum benefit amount were figured. If benefits are 
computed by means of a table contained in the law, the table must be 
furnished with the notice of determination whether benefits are granted 
or denied.
    The written notice of determination must show clearly the weekly 
benefit amount and the maximum potential benefits to which the claimant 
is entitled.
    The notice to a claimant found ineligible by reason of insufficient 
earnings in the base period must inform him clearly of the reason for 
ineligibility. An explanation of the benefit formula contained in a 
booklet or pamphlet should be given to each claimant at or prior to the 
time he receives written notice of a monetary determination.
    d. Benefit year. An explanation of what is meant by the benefit year 
and identification of the claimant's benefit year must be included in 
the notice of determination.
    e. Information as to benefits for partial unemployment. There must 
be included either in the written notice of determination or in a 
booklet or pamphlet accompanying the notice an explanation of the 
claimant's rights to partial benefits for any week with respect to which 
he is working less than his normal customary full-time workweek because 
of lack of work and for which he earns less than his weekly benefit 
amount or weekly benefit amount plus earnings, whichever is provided by 
the State law. If the explanation is contained in the notice of 
determination, reference to the item in the notice in which his weekly 
benefit amount is entered should be made.
    f. Deductions from weekly benefits
    (1) Earnings. Although written notice of determinations deducting 
earnings from a claimant's weekly benefit amount is generally not 
required (see paragraph 1 c(1) above), where written notice of 
determination is required (or given) it shall set forth the amount of 
earnings, the method of computing the deduction in sufficient detail to 
enable the claimant to verify the accuracy of the deduction, and his 
right to protest, request redetermination, and appeal. Where a written 
notice of determination is given to the claimant because there has been 
a change in the State law or in the application of the law, an 
explanation of the change shall be included.
    Where claimant is not required to receive a written notice of 
determination, he must be given a booklet or pamphlet the first time in 
his benefit year that there is a deduction for earnings which shall 
include the following information:
    (a) The method of computing deductions for earnings in sufficient 
detail to enable the claimant to verify the accuracy of the deduction;
    (b) That he will not automatically be given a written notice of 
determination for a week with respect to which there is a deduction for 
earnings (unless there is a dispute concerning the reduction with 
respect to a week or there has been a change in the State law or in the 
application of the law affecting the deduction) but that he may obtain 
such a written notice upon request; and
    (c) A clear statement of his right to protest, request a 
redetermination, and appeal from any determination deducting earnings 
from his weekly benefit amount even though he does not automatically 
receive a written notice of determination; and if the State law requires 
written notice of determination in order to effectuate a protest, 
redetermination, or appeal, he must be so advised and advised also that 
he must request a written notice of determination before he takes any 
such action.
    (2) Other deductions
    (a) A written notice of determination is required with respect to 
the first week in claimant's benefit year in which there is a reduction 
from his benefits for a reason other than earnings. This notice must 
describe the deduction made from claimaint's weekly benefit amount, the 
reason for the deduction, the method of computing it in sufficient 
detail to enable him to verify the accuracy of such deduction, and his 
right to protest, request redetermination, or appeal.
    (b) A written notice of determination is not required for subsequent 
weeks that a deduction is made for the same reason and on the basis of 
the same facts, if the notice of determination pursuant to (2)(a), or a 
booklet or pamphlet given him with such notice explains (i) the several 
kinds of deductions which may be made under the State law

[[Page 179]]

(e.g., retirement pensions, vacation pay, and overpayments); (ii) the 
method of computing each kind of deduction in sufficient detail that 
claimant will be able to verify the accuracy of deductions made from his 
weekly benefit payments; (iii) any limitation on the amount of any 
deduction or the time in which any deduction may be made; (iv) that he 
will not automatically be given a written notice of determination for 
subsequent weeks with respect to which there is a deduction for the same 
reason and on the basis of the same facts, but that he may obtain a 
written notice of determination upon request; (v) his right to protest, 
request redetermination, or appeal with respect to subsequent weeks for 
which there is a reduction from his benefits for the same reason, and on 
the basis of the same facts even though he does not automatically 
receive a written notice of determination; and (vi) that if the State 
law requires written notice of determination in order to effectuate a 
protest, redetermination, or appeal, he must be so advised and advised 
also that he must request a written notice of determination before he 
takes any such action.
    g. Seasonality factors. If the individual's determination is 
affected by seasonality factors under the State law, an adequate 
explanation must be made. General explanations of seasonality factors 
which may affect determinations for subsequent weeks may be included in 
a booklet or pamphlet given claimant with his notice of monetary 
determination.
    h. Disqualification or ineligibility. If a disqualification is 
imposed, or if the claimant is declared ineligible for one or more 
weeks, he must be given not only a statement of the period of 
disqualification or ineligibility and the amount of wage-credit 
reductions, if any, but also an explanation of the reason for the 
ineligibility or disqualification. This explanation must be sufficiently 
detailed so that he will understand why he is ineligibile or why he has 
been disqualified, and what he must do in order to requalify for 
benefits or purge the disqualification. The statement must be 
individualized to indicate the facts upon which the determination was 
based, e.g., state, ``It is found that you left your work with Blank 
Company because you were tired of working; the separation was voluntary, 
and the reason does not constitute good cause,'' rather than merely the 
phrase ``voluntary quit.'' Checking a box as to the reason for the 
disqualification is not a sufficiently detailed explanation. However, 
this statement of the reason for the disqualification need not be a 
restatement of all facts considered in arriving at the determination.
    1. Appeal rights. The claimant must be given information with 
respect to his appeal rights.
    (1) The following information shall be included in the notice of 
determination:
    (a) A statement that he may appeal or, if the State law requires or 
permits a protest or redetermination before an appeal, that he may 
protest or request a redetermination.
    (b) The period within which an appeal, protest, or request for 
redetermination must be filed. The number of days provided by statute 
must be shown as well as either the beginning date or ending date of the 
period. (It is recommended that the ending date of the appeal period be 
shown, as this is the more understandable of the alternatives.)
    (2) The following information must be included either in the notice 
of determination or in separate informational material referred to in 
the notice:
    (a) The manner in which the appeal, protest, or request for 
redetermination must be filed, e.g., by signed letter, written 
statement, or on a prescribed form, and the place or places to which the 
appeal, protest, or request for redetermination may be mailed or hand-
delivered.
    (b) An explanation of any circumstances (such as nonworkdays, good 
cause, etc.) which will extend the period for the appeal, protest, or 
request for redetermination beyond the date stated or identified in the 
notice of determination.
    (c) That any further information claimant may need or desire can be 
obtained together with assistance in filing his appeal, protest, or 
request for redetermination from the local office.
    If the information is given in separate material, the notice of 
determination would adequately refer to such material if it said, for 
example, ``For other information about your (appeal), (protest), 
(redetermination) rights, see pages------ to------ of the------ (name of 
pamphlet or booklet) heretofore furnished to you.''

6014 Separation Information Requirements Designed To Meet Department of 
                             Labor Criteria

    A. Information to agency. Where workers are separated, employers are 
required to furnish the agency promptly, either upon agency request or 
upon such separation, a notice describing the reasons for and the 
circumstances of the separation and any additional information which 
might affect a claimant's right to benefits. Where workers are working 
less than full time, employers are required to furnish the agency 
promptly, upon agency request, information concerning a claimant's hours 
of work and his wages during the claim periods involved, and other facts 
which might affect a claimant's eligibility for benefits during such 
periods.
    When workers are separated and the notices are obtained on a request 
basis, or when workers are working less than full time and the agency 
requests information, it is essential to the prompt processing of claims 
that the request be sent out promptly after the claim is filed and the 
employer be

[[Page 180]]

given a specific period within which to return the notice, preferably 
within 2 working days.
    When workers are separated and notices are obtained upon separation, 
it is essential that the employer be required to send the notice to the 
agency with sufficient promptness to insure that, if a claim is filed, 
it may be processed promptly. Normally, it is desirable that such a 
notice be sent to the central office of the agency, since the employer 
may not know in which local office the worker will file his claim. The 
usual procedure is for the employer to give the worker a copy of the 
notice sent by the employer to the agency.
    B. Information of worker. 1. Information required to be given. 
Employers are required to give their employees information and 
instructions concerning the employees' potential rights to benefits and 
concerning registration for work and filing claims for benefits.
    The information furnished to employees under such a requirement need 
not be elaborate; it need only be adequate to insure that the worker who 
is separated or who is working less than full time knows he is 
potentially eligible for benefits and is informed as to what he is to do 
or where he is to go to file his claim and register for work. When he 
files his claim, he can obtain more detailed information.
    In States that do not require employers to furnish periodically to 
the State agency detailed reports of the wages paid to their employees, 
each employer is required to furnish to his employees information as to 
(a) the name under which he is registered by the State agency, (b) the 
address where he maintains his payroll records, and (c) the workers' 
need for this information if and when they file claims for benefits.
    2. Methods for giving information. The information and instructions 
required above may be given in any of the following ways:
    a. Posters prominently displayed in the employer's establishment. 
The State agency should supply employers with a sufficient number of 
posters for distribution throughout their places of business and should 
see that the posters are conspicuously displayed at all times.
    b. Leaflets. Leaflets distributed either periodically or at the time 
of separation or reduction of hours. The State agency should supply 
employers with a sufficient number of leaflets.
    c. Individual notices. Individual notices given to each employee at 
the time of separation or reduction in hours.
    It is recommended that the State agency's publicity program be used 
to supplement the employer-information requirements. Such a program 
should stress the availability and location of claim-filing offices and 
the importance of visiting those offices whenever the worker is 
unemployed, wishes to apply for benefits, and to seek a job.
    6015 Evaluation of Alternative State Provisions with Respect to 
Claim Determinations and Separation Information. If the State law 
provisions do not conform to the suggested requirements set forth in 
sections 6013 and 6014, but the State law contains alternative 
provisions, the Bureau of Employment Security, in collaboration with the 
State agency, will study the actual or anticipated effects of the 
alternative provisions. If the Administrator of the Bureau concludes 
that the alternative provisions satisfy the criteria in section 6012, he 
will so notify the State agency. If the Administrator of the Bureau does 
not so conclude, he will submit the matter to the Secretary. If the 
Secretary concludes that the alternative provisions satisfy the criteria 
in section 6012, the State agency will be so notified. If the Secretary 
concludes that there is a question as to whether the alternative 
provisions satisfy the criteria, the State agency will be advised that 
unless the State law provisions are appropriately revised, a notice of 
hearing will be issued as required by the Code of Federal Regulations, 
title 20, section 601.5.

[55 FR 559, Jan. 5, 1990]

  Appendix C to Part 625--Standard for Fraud and Overpayment Detection

         Employment Security Manual (Part V, Sections 7510-7515)

         7510-7519 Standard for Fraud and Overpayment Detection

    7510 Federal Law Requirements. Section 303(a)(1) of the Social 
Security Act requires that a State law include provision for:
    ``Such methods of administration * * * as are found by the Secretary 
to be reasonably calculated to insure full payment of unemployment 
compensation when due.''
    Section 1603(a)(4) of the Internal Revenue Code and section 
3030(a)(5) of the Social Security Act require that a State law include 
provision for:
    ``Expenditure of all money withdrawn from an unemployment fund of 
such State, in the payment of unemployment compensation * * *''
    Section 1607(h) of the Internal Revenue Code defines 
``compensation'' as ``cash benefits payable to individuals with respect 
to their unemployment.''
    7511 The Secretary's Interpretation of Federal Law Requirements. The 
Secretary of Labor interprets the above sections to require that a State 
law include provision for such methods of administration as are, within 
reason, calculated (1) to detect benefits paid through error by the 
agency or through willful misrepresentation or error by the

[[Page 181]]

claimant or others, and (2) to deter claimants from obtaining benefits 
through willful misrepresentation.
    7513 Criteria for Review of State Conformity With Federal 
Requirements. In determining State conformity with the above 
requirements of the Internal Revenue Code and the Social Security Act, 
as interpreted by the Secretary of Labor, the following criteria will be 
applied:
    A. Are investigations required to be made after the payment of 
benefits, (or, in the case of interstate claims, are investigations made 
by the agent State after the processing of claims) as to claimants' 
entitlement to benefits paid to them in a sufficient proportion of cases 
to test the effectiveness of the agency's procedures for the prevention 
of payments which are not due? To carry out investigations, has the 
agency assigned to some individual or unit, as a basic function, the 
responsibility of making or functionally directing such investigations?
    Explanation: It is not feasible to prescribe the extent to which the 
above activities are required; however, they should always be carried on 
to such an extent that they will show whether or not error or willful 
misrepresentation is increasing or decreasing, and will reveal problem 
areas. The extent and nature of the above activities should be varied 
according to the seriousness of the problem in the State. The 
responsible individual or unit should:
    1. Check paid claims for overpayment and investigate for willful 
misrepresentation or, alternatively, advise and assist the operating 
units in the performance of such functions, or both;
    2. Perform consultative services with respect to methods and 
procedures for the prevention and detection of fraud; and
    3. Perform other services which are closely related to the above.
    Although a State agency is expected to make a full-time assignment 
of responsibility to a unit or individual to carry on the functions 
described above, a small State agency might make these functions a part-
time responsibility of one individual. In connection with the detection 
of overpayments, such a unit or individual might, for example:
    (a) Investigate information on suspected benefit fraud received from 
any agency personnel, and from sources outside the agency, including 
anonymous complaints;
    (b) Investigate information secured from comparisons of benefit 
payments with employment records to detect cases of concurrent working 
(whether in covered or noncovered work) and claiming of benefits 
(including benefit payments in which the agency acted as agency for 
another State).
    The benefit fraud referred to herein may involve employers, agency 
employees, and witnesses, as well as claimants.
    Comparisons of benefit payments with employment records are commonly 
made either by post-audit or by industry surveys. The so-called ``post-
audit'' is a matching of central office wage-record files against 
benefit payments for the same period. ``Industry surveys'' or ``mass 
audits'' are done in some States by going directly to employers for pay-
roll information to be checked against concurrent benefit lists. A plan
    A. of investigation based on a sample post-audit will be considered 
as partial fulfillment of the investigation program; it would need to be 
supplemented by other methods capable of detecting overpayments to 
persons who have moved into noncovered occupations or are claiming 
interstate benefits.
    B. Are adequate records maintained by which the results of 
investigations may be evaluated?
    Explanation: To meet this criterion, the State agency will be 
expected to maintain records of all its activities in the detection of 
overpayments, showing whether attributable to error or willful 
misrepresentation, measuring the results obtained through various 
methods, and noting the remedial action taken in each case. The adequacy 
and effectiveness of various methods of checking for willful 
misrepresentation can be evaluated only if records are kept of the 
results obtained. Internal reports on fraudulent and erroneous 
overpayments are needed by State agencies for self-evaluation. Detailed 
records should be maintained in order that the State agency may 
determine, for example, which of several methods of checking currently 
used are the most productive. Such records also will provide the basis 
for drawing a clear distinction between fraud and error.
    C. Does the agency take adequate action with respect to publicity 
concerning willful misrepresentation and its legal consequences to deter 
fraud by claimants?
    Explanation: To meet this criterion, the State agency must issue 
adequate material on claimant eligibility requirements and must take 
necessary action to obtain publicity on the legal consequences of 
willful misrepresentation or willful nondisclosure of facts.
    Public announcements on convictions and resulting penalties for 
fraud are generally considered necessary as a deterrent to other 
persons, and to inform the public that the agency is carrying on an 
effective program to prevent fraud. This alone is not considered 
adequate publicity. It is important that information be circulated which 
will explain clearly and understandably the claimant's rights, and the 
obligations which he must fulfill to be eligible for benefits. Leaflets 
for distribution and posters placed in local offices are appropriate 
media for such information.
    7515 Evaluation of Alternative State Provisions with Respect to 
Erroneous and Illegal Payments. If the methods of administration 
provided for by the State law do not conform

[[Page 182]]

to the suggested methods of meeting the requirements set forth in 
section 7511, but a State law does provide for alternative methods of 
administration designed to accomplish the same results, the Bureau of 
Employment Security, in collaboration with the State agency, will study 
the actual or anticipated effect of the alternative methods of 
administration. If the Bureau concludes that the alternative methods 
satisfy the criteria in section 7513, it will so notify the State 
agency. If the Bureau does not so conclude, it will submit to the 
Secretary the results of the study for his determination of whether the 
State's alternative methods of administration meet the criteria.

[55 FR 562, Jan. 5, 1990]



PART 626_INTRODUCTION TO THE REGULATIONS UNDER THE JOB TRAINING 
PARTNERSHIP ACT--Table of Contents




Sec.
626.1 Scope and purpose of the Job Training Partnership Act.
626.2 Format of the Job Training Partnership Act regulations.
626.3 Purpose, scope, and applicability of the Job Training Partnership 
          Act regulations.
626.4 Table of contents for the Job Training Partnership Act 
          regulations.
626.5 Definitions.

    Authority: 29 U.S.C. 1579(a).

    Source: 59 FR 45815, Sept. 2, 1994, unless otherwise noted.



Sec. 626.1  Scope and purpose of the Job Training Partnership Act.

    It is the purpose of the Job Training Partnership Act (JTPA or the 
Act) to establish programs to prepare youth and adults facing serious 
barriers to employment for participation in the labor force by providing 
job training and other services that will result in increased employment 
and earnings, increased educational and occupational skills, and 
decreased welfare dependency, thereby improving the quality of the work 
force and enhancing the productivity and competitiveness of the Nation 
(section 2).



Sec. 626.2  Format of the Job Training Partnership Act regulations.

    (a) Regulations promulgated by the Department of Labor to implement 
the provisions of the Act are set forth in parts 626 through 638 of 
title 20, chapter V, of the Code of Federal Regulations, with the 
exception of the veterans' employment program's chapter IX regulations 
of the Office of the Assistant Secretary for Veterans' Employment and 
Training, which are set forth at part 1005 of title 20.
    (b) Nondiscrimination and equal opportunity requirements and 
procedures, including complaint processing and compliance reviews, will 
be governed by the provisions of 29 CFR part 34 and will be administered 
by the Department of Labor (Department or DOL) Directorate of Civil 
Rights.
    (c) General authority for the JTPA regulations is found at section 
169 of the Act. Specific statutory authorities other than section 169 
are noted throughout the JTPA regulations.



Sec. 626.3  Purpose, scope, and applicability of the Job Training 
Partnership Act regulations.

    (a) Parts 626 through 638 of this chapter and part 1005 of chapter 
IX (Veterans' employment programs under title IV, part C of the Job 
Training Partnership Act) establish the Federal programmatic and 
administrative requirements for JTPA grants awarded by the Department of 
Labor to eligible grant recipients.
    (b) Parts 626 through 638 of this chapter and part 1005 of chapter 
IX apply to recipients and subrecipients of JTPA funds.



Sec. 626.4  Table of contents for the Job Training Partnership Act 
regulations.

    The table of contents for the regulations under the Job Training 
Partnership Act, 20 CFR parts 626-638 and 1005,\1\ is as follows:
---------------------------------------------------------------------------

    \1\ Part 1005 was removed at 59 FR 26601, May 23, 1994.
---------------------------------------------------------------------------

    PART 626--INTRODUCTION TO THE REGULATIONS UNDER THE JOB TRAINING 
                             PARTNERSHIP ACT

Sec.
626.1 Scope and purpose of the Job Training Partnership Act.
626.2 Format of the Job Training Partnership Act regulations.
626.3 Purpose, scope and applicability of the Job Training Partnership 
          Act regulations.
626.4 Table of contents for the Job Training Partnership Act 
          regulations.

[[Page 183]]

626.5 Definitions.

      PART 627--GENERAL PROVISIONS GOVERNING PROGRAMS UNDER THE ACT

                      Subpart A--Scope and Purpose

627.100 Scope and Purpose of Part 627.

                     Subpart B--Program Requirements

627.200 Governor/Secretary agreement.
627.205 Public service employment prohibition.
627.210 Nondiscrimination and nonsectarian activities.
627.215 Relocation.
627.220 Coordination with programs under title IV of the Higher 
          Education Act including the Pell grant program.
627.225 Employment generating activities.
627.230 Displacement.
627.235 General program requirements.
627.240 On-the-job training.
627.245 Work experience.
627.250 Interstate agreements.

   Subpart C--Payments, Supportive Services and Benefits and Working 
                               Conditions

627.300 Scope and purpose.
627.305 Payments.
627.310 Supportive Services.
627.315 Benefits and working conditions.

                   Subpart D--Administrative Standards

627.400 Scope and purpose.
627.405 Grant agreement and funding.
627.410 Reallotment and reallocation.
627.415 Insurance.
627.420 Procurement.
627.422 Selection of service providers.
627.423 Funding restrictions for ``high-risk'' recipients and 
          subrecipients.
627.424 Prohibition of subawards to debarred and suspended parties.
627.425 Standards for financial management and participant data systems.
627.430 Grant payments.
627.435 Cost principles and allowable costs.
627.440 Classification of costs.
627.445 Limitations on certain costs.
627.450 Program income.
627.455 Reports required.
627.460 Requirements for records.
627.463 Public access to records.
627.465 Property management standards.
627.470 Performance standards.
627.471 Reorganization plan appeals.
627.475 Oversight and monitoring.
627.477 Governor's determination of substantial violation.
627.480 Audits.
627.481 Audit resolution.
627.485 Closeout.
627.490 Later disallowances and adjustments after closeout.
627.495 Collection of amounts due.

      Subpart E--Grievances Procedures at the State and Local Level

627.500 Scope and purpose.
627.501 State grievance and hearing procedures for noncriminal 
          complaints at the recipient level.
627.502 Grievance and hearing procedures for noncriminal complaints at 
          the SDA and SSG levels.
627.503 Recipient-level review.
627.504 Noncriminal grievance procedure at employer level.

    Subpart F--Federal Handling of Noncriminal Complaints and other 
                               Allegations

627.600 Scope and purpose.
627.601 Complaints and allegations at the Federal level.
627.602 Resolution of investigative findings.
627.603 Special handling of labor standards violations under section 143 
          of the Act.
627.604 Alternative procedure for handling labor standards violations 
          under section 143--Binding arbitration.
627.605 Special Federal review of SDA and SSG-level complaints without 
          decision.
627.606 Grant officer resolution.
627.607 Grant Officer resolution of Governor's failure to promptly take 
          action.

             Subpart G--Sanctions for Violations of the Act

627.700 Scope and purpose.
627.702 Sanctions and corrective actions.
627.703 Failure to comply with procurement provisions.
627.704 Process for waiver of State liability.
627.706 Process for advance approval of a recipient's contemplated 
          corrective actions.
627.708 Offset process.

     Subpart H--Hearings by the Office of Administrative Law Judges

627.800 Scope and purpose.
627.801 Procedures for filing request for hearing.
627.802 Rules of procedure.
627.803 Relief.
627.804 Timing of decisions.
627.805 Alternative dispute resolution.
627.806 Other authority.

                    Subpart I--Transition Provisions

627.900 Scope and purpose.
627.901 Transition period.
627.902 Governor's actions.
627.903 Actions which are at the discretion of the Governor.
627.904 Transition and implementation.
627.905 Guidance on contracts and other agreements.
627.906 Determinations on State and SDA implementation.

[[Page 184]]

  PART 628--PROGRAMS UNDER TITLE II OF THE JOB TRAINING PARTNERSHIP ACT

                      Subpart A--Scope and Purpose

628.100 Scope and purpose of part 628.

                        Subpart B--State Planning

628.200 Scope and purpose.
628.205 Governor's coordination and special services plan.
628.210 State Job Training Coordinating Council.
628.215 State Human Resource Investment Council.

                        Subpart C--State Programs

628.300 Scope and purpose.
628.305 State distribution of funds.
628.310 Administration.
628.315 Education coordination and grants.
628.320 Services for older individuals.
628.325 Incentive grants, capacity building and technical assistance.

                Subpart D--Local Service Delivery System

628.400 Scope and purpose.
628.405 Service delivery areas.
628.410 Private Industry Council.
628.415 Selection of SDA grant recipient and administrative entity.
628.420 Job training plan.
628.425 Review and approval.
628.426 Disapproval or revocation of the plan.
628.430 State SDA submission.

 Subpart E--Program Design Requirements for Programs Under Title II of 
                    the Job Training Partnership Act

628.500 Scope and purpose.
628.505 Eligibility.
628.510 Intake, referrals, and targeting.
628.515 Objective assessment.
628.520 Individual service strategy.
628.525 Limitations.
628.530 Referrals of participants to non-title II programs.
628.535 Limitations on job search assistance.
628.540 Volunteer program.
628.545 Linkages and coordination.
628.550 Transfer of funds.

                      Subpart F--The Adult Program

628.600 Scope and purpose.
628.605 Eligibility.
628.610 Authorized services.

       Subpart G--The Summer Youth Employment and Training Program

628.700 Scope and purpose.
628.701 Program goals and objectives.
628.702 Enriched Educational Component.
638.703 Private Sector Summer Jobs.
628.704 Eligibility.
628.705 SYETP authorized services.
628.710 Period of program operation.

                    Subpart H--Youth Training Program

628.800 Scope and purpose.
628.803 Eligibility.
628.804 Authorized services.

                        PARTS 629-630 [Reserved]

 PART 631--PROGRAMS UNDER TITLE III OF THE JOB TRAINING PARTNERSHIP ACT



                      Subpart A--General Provisions

631.1 Scope and purpose.
631.2 Definitions.
631.3 Participant eligibility.
631.4 Approved training rule.

 Subpart B--Additional Title III Administrative Standards and Procedures

631.11 Allotment and obligation of funds by the Secretary.
631.12 Reallotment of funds by the Secretary.
631.13 Classification of costs at State and substate levels.
631.14 Limitations on certain costs.
631.15 Federal reporting requirements.
631.16 Complaints, investigations, and penalties.
631.17 Federal monitoring and oversight.
631.18 Federal by-pass authority.
631.19 Appeals.

                    Subpart C--Needs-Related Payments

631.20 Needs-related payments.

                     Subpart D--State Administration

631.30 Designation or creation and functions of a State dislocated 
          worker unit or office and rapid response assistance.
631.31 Monitoring and oversight.
631.32 Allocation of funds by the Governor.
631.33 State procedures for identifying funds subject to mandatory 
          Federal reallotment.
631.34 Designation of substate areas.
631.35 Designation of substate grantees.
631.36 Biennial State plan.
631.37 Coordination activities.
631.38 State by-pass authority.

                        Subpart E--State Programs

631.40 State program operational plan.
631.41 Allowable State activities.

                      Subpart F--Substate Programs

631.50 Substate plan.
631.51 Allowable substate program activities.
631.52 Selection of service providers.

[[Page 185]]

631.53 Certificate of continuing eligibility.

   Subpart G--Federal Delivery of Dislocated Worker Services Through 
                     National Reserve Account Funds

631.60 General.
631.61 Application for funding and selection criteria.
631.62 Cost limitations.
631.63 Reporting.
631.64 General Administrative Requirements.
631.65 Special Provisions for CAETA and DDP.

                          Subpart H [Reserved]

            Subpart I--Disaster Relief Employment Assistance

631.80 Scope and Purpose.
631.81 Availability of funds.
631.82 Substate allocation.
631.83 Coordination.
631.84 Allowable projects.
631.85 Participant eligibility.
631.86 Limitations on disaster relief employment.
631.87 Definitions.

  PART 632--INDIAN AND NATIVE AMERICAN EMPLOYMENT AND TRAINING PROGRAMS

                         Subpart A--Introduction

632.1 [Reserved]
632.2 Scope and purpose.
632.3 Format for these regulations.
632.4 Definitions.

   Subpart B--Designation Procedures for the Native American Grantees

632.10 Eligibility requirements for designation as a Native American 
          grantee.
632.11 Designation of Native American grantees.
632.12 Alternative arrangements for the provision of services, 
          nondesignation.
632.13 Review of denial of designation as a Native American grantee, or 
          rejection of a comprehensive annual plan.

  Subpart C--Program Planning, Application and Modification Procedures

632.17 Planning process.
632.18 Regional and national planning meetings.
632.19 Grant application content.
632.20 Submission of grant applications.
632.21 Application disapproval.
632.22 Modification of a Comprehensive Annual Plan (CAP) and/or Master 
          Plan.
632.23 Termination and corrective action of a CAP and/or Master Plan.

           Subpart D--Administrative Standards and Procedures

632.31 General.
632.32 Financial management systems.
632.33 Audits.
632.34 Program income.
632.35 Native American grantee contracts and subgrants.
632.36 Procurement standards.
632.37 Allowable costs.
632.38 Classification of costs.
632.39 Administrative cost plan.
632.40 Administrative staff and personnel standards.
632.41 Reporting requirements.
632.42 Grant closeout procedures.
632.43 Reallocation of funds.
632.44 Sanctions for violation of the Act.

                Subpart E--Program Design and Management

632.70 Waiver of regulations under parts 632 and 636.
632.75 General responsibilities of Native American grantees.
632.76 Program management systems.
632.77 Participant eligibility determination.
632.78 Training activities.
632.79 Employment activities.
632.80 Other activities.
632.81 Payments to participants.
632.82 Benefits and working conditions for participants.
632.83 FICA.
632.84 Non-Federal status of participants.
632.85 Participant limitations.
632.86 Nondiscrimination and nonsectarian activities.
632.87 Equitable provision of services to the eligible population and 
          significant segments.
632.88 General responsibilities of the Department.
632.89 Performance standards.

            Subpart F--Prevention of Fraud and Program Abuse

632.115 General.
632.116 Conflict of interest.
632.117 Kickbacks.
632.118 Nepotism.
632.119 Political patronage.
632.120 Political activities.
632.121 Lobbying activities.
632.122 Unionization and antiunionization activities; work stoppages.
632.123 Maintenance of effort.
632.124 Theft or embezzlement from employment and training funds; 
          improper inducement; obstruction of investigations and other 
          criminal provisions.
632.125 Responsibilities of Native American grantees, subgrantees and 
          contractors for preventing fraud and program abuse and for 
          general program management.

[[Page 186]]

                          Subpart G [Reserved]

Subpart H--Job Training Partnership Act Programs Under Title IV, Section 
                                   401

632.170 Eligibility for funds.
632.171 Allocation of funds.
632.172 Eligibility for participation in Title IV, Section 401.
632.173 Allowable program activities.
632.174 Administrative costs.

        Subpart I--Summer Youth Employment and Training Programs

632.250 General.
632.251 Eligibility for funds.
632.252 Allocation of funds.
632.253 Special operating provision.
632.254 Program startup.
632.255 Program planning.
632.256 Submission of applications.
632.257 Eligibility for participation.
632.258 Allowable activities.
632.259 Vocational exploration program.
632.260 Worksite standards.
632.261 Reporting requirements.
632.262 Termination date for the summer program.
632.263 Administrative costs.

           PART 633--MIGRANT AND SEASONAL FARMWORKER PROGRAMS

                   Subpart A--Introductory Provisions

633.102 Scope and purpose of Title IV, Section 402 programs.
633.103 Format for these regulations.
633.104 Definitions.
633.105 Allocation of funds.
633.106 Eligibility for allocable funds.
633.107 Eligibility for participation in Section 402 programs.

          Subpart B--Grant Planning and Application Procedures

633.201 Grant planning and application procedures in general.
633.202 Announcement of State planning estimates and invitation to 
          submit a grant application.
633.203 Review of funding request.
633.204 Responsibility review.
633.205 Notification of selection.

         Subpart C--Program Design and Administrative Procedures

633.301 General responsibilities.
633.302 Training activities and services.
633.303 Allowable costs.
633.304 Section 402 cost allocation.
633.305 General benefits and working conditions for program 
          participants.
633.306 Retirement benefits.
633.307 Packages of benefits.
633.308 Non-Federal status of participants.
633.309 Recordkeeping requirements.
633.310 Bonding.
633.311 Management information systems.
633.312 Grantee contracts and subgrants.
633.313 Administrative staff and personnel standards.
633.314 Reports required.
633.315 Replacement, corrective action, termination.
633.316 Closeout procedures.
633.317 Reallocation of funds.
633.318 Nondiscrimination and nonsectarian activities.
633.319 Lobbying, political activities and unionization.
633.320 Nepotism.
633.321 Performance standards for Section 402 programs.
633.322 Sanctions for violation of the Act.

 PART 634--LABOR MARKET INFORMATION PROGRAMS UNDER TITLE IV, PART E OF 
                    THE JOB TRAINING PARTNERSHIP ACT

              Comprehensive Labor Market Information System

634.1 General.
634.2 Availability of funds.
634.3 Eligible recipients.
634.4 Statistical standards.
634.5 Federal oversight.

                           PART 635 [RESERVED]

           PART 636--COMPLAINTS, INVESTIGATIONS, AND HEARINGS

636.1 Scope and purpose.
636.2 Protection of informants.
636.3 Complaint and hearing procedures at the grantee level.
636.4 Grievance procedures at the employer level.
636.5 Exhaustion of grantee level procedure.
636.6 Complaints and investigations at the Federal level.
636.7 Subpoenas.
636.8 Initial and final determination; request for hearing at the 
          Federal level.
636.9 Opportunity for informal review.
636.10 Hearings before the Office of Administrative Law Judges.
636.11 Final action.

  PART 637--PROGRAMS UNDER TITLE V OF THE JOB TRAINING PARTNERSHIP ACT

                      Subpart A--General Provisions

Sec.
637.100 Scope and purpose.
637.105 Definitions.

                Subpart B--Program Planning and Operation

637.200 Allotments to States.
637.205 Notice of intent to participate.
637.210 Incentive bonus program applications.

[[Page 187]]

637.215 Review and approval of applications for incentive bonus 
          payments.
637.220 Eligibility criteria for individuals to be counted in 
          determining incentive bonuses.
637.225 Determination of incentive bonus.
637.230 Use of incentive bonuses.

  Subpart C--Additional Title V Administrative Standards and Procedures

637.300 Management systems, reporting and recordkeeping.
637.305 Federal monitoring and oversight.
637.310 Audits.

                  Subpart D--Data Collection [Reserved]

    PART 638--JOB CORPS PROGRAM UNDER TITLE IV-B OF THE JOB TRAINING 
                             PARTNERSHIP ACT

                      Subpart A--Purpose and Scope

638.100 General.

                         Subpart B--Definitions

638.200 Definitions.

      Subpart C--Funding, Site Selection, and Facilities Management

638.300 Eligibility for funds and eligible deliverers.
638.301 Funding procedures.
638.302 Center performance measurement.
638.303 Site selection and facilities management.
638.304 Historical preservation.
638.305 Capital improvements.
638.306 Protection and maintenance of contract center facilities owned 
          or leased by Job Corps.
638.307 Facilities surveys.

 Subpart D--Enrollment, Transfers, Terminations, and Placements in the 
                                Job Corps

638.400 Eligibility for participation.
638.401 Outreach and screening of participants.
638.402 Enrollment by readmission.
638.403 Selective service.
638.404 Transfers.
638.405 Extensions of enrollment.
638.406 Federal status of students.
638.407 Terminations.
638.408 Transportation.
638.409 Placement and job development.

                      Subpart E--Center Operations

638.500 Orientation program.
694.501 Student handbook.
638.502 Job Corps basic education program.
638.503 Vocational training.
638.504 Occupational exploration programs.
638.505 Scheduling of training.
638.506 Purchase of vocational supplies and equipment.
638.507 Work experience.
638.508 Sale of services or objects.
638.509 Leisure-time employment.
638.510 Health care and services.
638.511 Drug use and abuse.
638.512 Sexual behavior and harassment.
638.513 Death.
638.514 Residential support services.
638.515 Recreation/avocational program.
638.516 Laundry, mail, and telephone service.
638.517 Counseling.
638.518 Intergroup relations program.
638.519 Incentives system.
638.520 Student government and leadership program.
638.521 Student welfare associations.
638.522 Evaluation of student progress.
638.523 Food service.
638.524 Allowances and allotments.
638.525 Clothing.
638.526 Tort and other claims.
638.527 Federal employees' compensation.
638.528 Social Security.
638.529 Income taxes.
638.530 Emergency use of personnel, equipment, and facilities.
638.531 Limitations on the use of students in emergency projects.
638.532 Annual leave.
638.533 Other student absences.
638.534 Legal services to corpsmembers.
638.535 Voting rights.
638.536 Religious rights.
638.537 Disclosure of information.
694.538 Disciplinary procedures and appeals.
638.539 Complaints and disputes.
638.540 Cooperation with agencies and institutions.
638.541 Job Corps training opportunities.
638.542 Child care services.
638.543 Community relations program.

           Subpart F--Applied Vocational Skills Training (VST)

638.600 Applied vocational skills training (VST) through work projects.
638.601 Applied VST budgeting.

      Subpart G--Experimental, Research, and Demonstration Projects

638.710 Experimental, research, and demonstration projects.

                  Subpart H--Administrative Provisions

638.800 Program management.
638.801 Staff training.
638.802 Student records management.
638.803 Safety.
638.804 Environmental health.
638.805 Security and law enforcement.
638.806 Property management and procurement.
638.807 Imprest and petty cash funds.
638.808 Center financial management and reporting.
638.809 Audit.

[[Page 188]]

638.810 Reporting requirements.
638.811 Review and evaluation.
638.812 State and local taxation of Job Corps deliverers.
638.813 Nondiscrimination, nonsectarian activities.
638.814 Lobbying; political activities; unionization.
638.815 Charging fees.

[59 FR 45815, Sept. 2, 1994, as amended at 60 FR 58229, Nov. 27, 1995]



Sec. 626.5  Definitions.

    In addition to the definitions contained in section 4 of the Act, 
the following definitions of terms used in the Act or parts 626-631 of 
this chapter apply as appropriate to programs under titles I, II, and 
III of the Act:
    Accrued expenditures means charges made to the JTPA program. 
Expenditures are the sum of actual cash disbursements, the amount of 
indirect expense incurred, and the net increase (or decrease) in the 
amounts owed by the recipient for the goods and other property received, 
for services performed by employees, contractors, subgrantees, 
subcontractors, and other payees, and other amounts becoming owed under 
programs for which no current services or performance are required, such 
as annuities, insurance claims, and other benefit payments.
    Act means the Job Training Partnership Act.
    ALJ means an administrative law judge in the Office of 
Administrative Law Judges of the U.S. Department of Labor.
    Awarding agency means: (1) With respect to a grant, the Department 
of Labor; and (2) with respect to a subgrant or contract, the party that 
awarded the subgrant or contract.
    Capacity building means the systematic improvement of job functions, 
skills, knowledge, and expertise of the personnel who staff and 
administer employment and training and other closely related human 
service systems. Capacity building is designed to enhance the 
effectiveness, to strengthen the caliber of customer services provided 
under the Act and other Federal, State, and local employment and 
training programs, and improve coordination among them. Capacity 
building includes curriculum development, appropriate training, 
technical assistance, staff development, and other related activities.
    Chief elected official (CEO) means the official or officials, or 
their representatives, of the jurisdiction or jurisdictions which 
requested designation by the Governor as a service delivery area.
    Commercial organizations means private for-profit entities.
    Commercially available off-the-shelf training package means a 
training package sold or traded to the general public in the course of 
normal business operations, at prices based on established catalog or 
market prices. To be considered as ``sold to the general public,'' the 
package must be regularly sold in sufficient quantities to constitute a 
real commercial market to buyers that must include other than JTPA 
programs. The package must include performance criteria pertaining to 
the delivery of the package which may include participant attainment of 
knowledge, skills or a job.
    Contractor means the organization, entity, or individual that is 
awarded a procurement contract under the recipient's or subrecipient's 
procurement standards and procedures.
    Cost means accrued expenditure.
    Department means the U.S. Department of Labor.
    DOL means the U.S. Department of Labor.
    ETA means the Employment and Training Administration of the U.S. 
Department of Labor.
    Family is defined at section 4(34) of the Act. An ``individual with 
a disability'' shall, for the purposes of income eligibility 
determination, be considered to be an unrelated individual who is a 
family unit of one, consistent with the definition of ``economically 
disadvantaged'' at section 4(8) of the Act. The Governor may provide 
interpretations of the term ``family'' related to how ``dependent 
children'' are defined for programs within a State, consistent with the 
Act, and all applicable rules and regulations, and State or local law. 
Such interpretations by the Governor may address the treatment of 
certain individuals who may need to be viewed discretely in the income 
eligibility determination process, such as runaways, emancipated youth, 
and

[[Page 189]]

court adjudicated youth separated from the family.
    The phrase ``living in a single residence'' with other family 
members includes temporary, voluntary residence elsewhere (e.g., 
attending school or college, or visiting relatives). It does not include 
involuntary temporary residence elsewhere (e.g., incarceration, or 
placement as a result of a court order).
    Family income means ``income'' as defined by the Department of 
Health and Human Services in connection with the annual poverty 
guidelines. Such income shall not include unemployment compensation, 
child support and public assistance (including Aid to Families with 
Dependent Children, Supplemental Security Income, Emergency Assistance 
money payments, and non-federally funded General Assistance or General 
Relief money payments), as provided for at section 4(8) of the Act. In 
addition, such income shall also exclude foster child care payments, 
educational financial assistance received under title IV of the Higher 
Education Act (20 U.S.C. 1087), as amended by section 479(B) of the 
Higher Education Act Amendments of 1992), needs-based scholarship 
assistance, and income earned while on active military duty and other 
benefit payments specified at 38 U.S.C. 4213, items (1) and (3). The 
Governor may, for the purposes of determining income eligibility for 
services to older individuals under section 204(d)(5) of the Act, 
exclude up to 25 percent of Social Security and Old Age Survivors' 
Insurance benefit payments under title II of the Social Security Act, 
(42 U.S.C., section 401, et seq.) from the definition of family income. 
In addition, when a Federal statute specifically provides that income or 
payments received under such statute shall be excluded in determining 
eligibility for and the level of benefits received under any other 
federal statute, such income or payments shall be excluded in JTPA 
eligibility determinations.
    Funding period means the period of time when JTPA funds are 
available for expenditure. Unless a shorter period of time is specified 
in a title III discretionary award, the JTPA funding period is the 3-
year period specified in JTPA section 161(b); the program year in which 
Federal funds are obligated to the recipient, and the two succeeding 
program years.
    Governor means, in addition to the definition at section 4(9) of the 
Act, the recipient of JTPA funds awarded to the State under titles I 
through III.
    Grant means an award of JTPA financial assistance by the U.S. 
Department of Labor to an eligible JTPA recipient. (Also, see Sec. Sec. 
627.405 and 627.430 of these regulations).
    Grantee means the recipient.
    Individual service strategy (ISS) is defined in Sec. 628.520 of 
this chapter.
    Job search assistance (also including job search skills training and 
job club activities) means the provision of instruction and support to a 
participant to give the participant skills in acquiring full time 
employment. The services provided may include, but are not limited to, 
resume writing, interviewing skills, labor market guidance, telephone 
techniques, information on job openings, and job acquisition strategies, 
as well as the provision of office space and supplies for the job 
search.
    Job Training Partnership Act means Public Law (Pub. L.) 97-300, as 
amended, 29 U.S.C. 1501, et seq.
    JTPA means the Job Training Partnership Act.
    Nontraditional employment, as applied to women, means occupations or 
fields of work where women comprise less than 25 percent of the 
individuals employed in such occupation or field of work as provided 
periodically by the Department in the Federal Register. (Pub. L. 102-
235, Nontraditional Employment for Women Act).
    OALJ means the Office of Administrative Law Judges of the U.S. 
Department of Labor.
    Obligations means the amounts of orders placed, contracts and 
subgrants awarded, goods and services received, and similar transactions 
during a funding period that will require payment by the recipient or 
subrecipient during the same or a future period.
    OIG means the Office of Inspector General of the U.S. Department of 
Labor.
    PIC means a private industry council.
    Participant means an individual who has been determined to be 
eligible to

[[Page 190]]

participate in and who is receiving services (except post-termination 
services authorized under sections 204(c)(4) and 264(d)(5) and followup 
services authorized under section 253(d)) under a program authorized by 
the JTPA. Participation shall be deemed to commence on the first day, 
following determination of eligibility, on which the participant began 
receiving subsidized employment, training, or other services provided 
under the JTPA. (section 4(37)).
    Program year means the 12-month period beginning July 1 of the 
indicated year.
    Recipient means the entity to which a JTPA grant is awarded directly 
from the Department of Labor to carry out the JTPA program. The 
recipient is the entire legal entity that received the award and is 
legally responsible for carrying out the JTPA program, even if only a 
particular component of the entity is designated in the grant award 
document. For JTPA grants under titles I, II and III, except for certain 
discretionary grants awarded under title III, part B, the State is the 
recipient.
    SDA means a service delivery area designated by the Governor 
pursuant to section 101(a)(4) of the Act. As used in these regulations, 
SDA may also refer to the entity that administers the JTPA program 
within the designated area.
    SDA grant recipient means the entity that receives JTPA funds for a 
service delivery area directly from the recipient.
    Secretary means the Secretary of Labor, U.S. Department of Labor, or 
his or her designee.
    Section, as used in this chapter, means a section of the Act unless 
the text specifically indicates otherwise.
    Service provider means a public agency, private nonprofit 
organization, or private-for-profit entity that delivers educational, 
training, employment or supportive services to JTPA participants. Awards 
to service providers may be made by subgrant, contract, subcontract, or 
other legal agreement.
    Stand-in costs means costs paid from non-Federal sources that a 
recipient proposes to substitute for Federal costs that have been 
disallowed as a result of an audit or other review. In order to be 
considered as valid substitutions, the costs (1) shall have been 
reported by the grantee as uncharged program costs under the same title 
and in the same program year in which the disallowed costs were incurred 
(2) shall have been incurred in compliance with laws, regulations, and 
contractual provisions governing JTPA, and (3) shall not result in a 
violation of the applicable cost limitations.
    State is defined at section 4(22) of the Act. For cash payment 
purposes, the definition of ``State'' contained in the Department of the 
Treasury regulations at 31 CFR 205.3 shall apply to JTPA programs.
    State council means the State Job Training Coordinating Council 
(SJTCC) or, in a State with a Human Resource Investment Council (HRIC) 
pursuant to Sec. 628.215 of this chapter, the HRIC.
    Subgrant means an award of JTPA financial assistance in the form of 
money, or property in lieu of money, made under a grant by a recipient 
to an eligible subrecipient. It also means a subgrant award of JTPA 
financial assistance by a subrecipient to a lower tier subrecipient. The 
term includes financial assistance when provided by any legal agreement, 
even if the agreement is called a contract, but does not include 
procurement purchases from vendors nor does it include any form of 
assistance received by program participants.
    Subgrantee means a subrecipient.
    Subrecipient means the legal entity to which a subgrant is awarded 
and which is accountable to the recipient (or higher tier subrecipient) 
for the use of the funds provided. For JTPA purposes, distinguishing 
characteristics of a subrecipient include items such as determining 
eligibility of applicants, enrollment of participants, performance 
measured against meeting the objectives of the program, responsibility 
for programmatic decisionmaking, responsibility for compliance with 
program requirements, and use of the funds awarded to carry out a JTPA 
program or project, as compared to providing goods or services for a 
JTPA program or project (vendor). Depending on local circumstances, the 
PIC, local elected official, or administrative entity may

[[Page 191]]

be a subrecipient. SDA grant recipients and JTPA title III substate 
grantees are particular types of subrecipients.
    Substate grantee (SSG) means that agency or organization selected to 
administer programs pursuant to section 312(b) of the Act. The substate 
grantee is the entity that receives JTPA title III funds for a substate 
area directly from the Governor.
    Technical assistance is a facet of capacity building which may 
include but is not limited to information sharing, dissemination and 
training on program models and job functions; peer-to-peer networking 
and problem solving; guides; and interactive communication technologies.
    Title, as used in this chapter, means a title of the Act, unless the 
text of the regulation specifically indicates otherwise.
    Vendor means an entity responsible for providing generally required 
goods or services to be used in the JTPA program. These goods or 
services may be for the recipient's or subrecipient's own use or for the 
use of participants in the program. Distinguishing characteristics of a 
vendor include items such as: Providing the goods and services within 
normal business operations; providing similar goods or services to many 
different purchasers, including purchasers outside the JTPA program; and 
operating in a competitive environment. A vendor is not a subrecipient 
and does not exhibit the distinguishing characteristics attributable to 
a subrecipient, as defined above. Any entity directly involved in the 
delivery of program services not available to the general public, with 
the exception of an employer providing on-the-job training, shall be 
considered a subrecipient rather than a vendor.
    Wagner-Peyser Act means 29 U.S.C. 49, et seq.

[59 FR 45815, Sept. 2, 1994, as amended at 61 FR 19983, May 3, 1996]



PART 627_GENERAL PROVISIONS GOVERNING PROGRAMS UNDER TITLES I, II, 
AND III OF THE ACT--Table of Contents




                       Subpart A_Scope and Purpose

Sec.
627.100 Scope and purpose of this part 627.

                     Subpart B_Program Requirements

627.200 Governor/Secretary agreement.
627.201 Waivers.
627.205 Public service employment prohibition.
627.210 Nondiscrimination and nonsectarian activities.
627.215 Relocation.
627.220 Coordination with programs under title IV of the Higher 
          Education Act including the Pell grant program.
627.225 Employment generating activities.
627.230 Displacement.
627.235 General program requirements.
627.240 On-the-job training.
627.245 Work experience.
627.250 Interstate agreements.

   Subpart C_Payments, Supportive Services, and Benefits and Working 
                               Conditions

627.300 Scope and purpose.
627.305 Payments.
627.310 Supportive services.
627.315 Benefits and working conditions.

                   Subpart D_Administrative Standards

627.400 Scope and purpose.
627.405 Grant agreement and funding.
627.410 Reallotment and reallocation.
627.415 Insurance.
627.420 Procurement.
627.422 Selection of service providers.
627.423 Funding restrictions for ``high-risk'' recipients and 
          subrecipients.
627.424 Prohibition of subawards to debarred and suspended parties.
627.425 Standards for financial management and participant data systems.
627.430 Grant payments.
627.435 Cost principles and allowable costs.
627.440 Classification of costs.
627.445 Limitations on certain costs.
627.450 Program income.
627.455 Reports required.
627.460 Requirements for records.
627.463 Public access to records.
627.465 Property management standards.
627.470 Performance standards.
627.471 Reorganization plan appeals.
627.475 Oversight and monitoring.
627.477 Governor's determination of substantial violation.
627.480 Audits.
627.481 Audit resolution.
627.485 Closeout.
627.490 Later disallowances and adjustments after closeout.
627.495 Collection of amounts due.

      Subpart E_Grievances Procedures at the State and Local Level

627.500 Scope and purpose.

[[Page 192]]

627.501 State grievance and hearing procedures for noncriminal 
          complaints at the recipient level.
627.502 Grievance and hearing procedures for noncriminal complaints at 
          the SDA and SSG levels.
627.503 Recipient-level review.
627.504 Noncriminal grievance procedure at employer level.

     Subpart F_Federal Handling of Noncriminal Complaints and Other 
                               Allegations

627.600 Scope and purpose.
627.601 Complaints and allegations at the Federal level.
627.602 Resolution of investigative findings.
627.603 Special handling of labor standards violations under section 143 
          of the Act.
627.604 Alternative procedure for handling labor standards violations 
          under section 143--binding arbitration.
627.605 Special Federal review of SDA- and SSG-level complaints without 
          decision.
627.606 Grant Officer resolution.
627.607 Grant Officer resolution of Governor's failure to promptly take 
          action.

              Subpart G_Sanctions for Violations of the Act

627.700 Purpose and scope.
627.702 Sanctions and corrective actions.
627.703 Failure to comply with procurement provisions.
627.704 Process for waiver of State liability.
627.706 Process for advance approval of a recipient's contemplated 
          corrective actions.
627.708 Offset process.

      Subpart H_Hearings by the Office of Administrative Law Judges

627.800 Scope and purpose.
627.801 Procedures for filing request for hearing.
627.802 Rules of procedure.
627.803 Relief.
627.804 Timing of decisions.
627.805 Alternative dispute resolution.
627.806 Other authority.

                     Subpart I_Transition Provisions

627.900 Scope and purpose.
627.901 Transition period.
627.902 Governor's actions.
627.903 Actions which are at the discretion of the Governor.
627.904 Transition and implementation.
627.905 Guidance on contracts and other agreements.
627.906 Determinations on State and SDA implementation.

    Authority: 29 U.S.C. 1579(a); Sec. 6305(f), Pub. L. 100-418, 102 
Stat. 1107; 29 U.S.C. 1791i(e).

    Source: 59 FR 45821, Sept. 2, 1994, unless otherwise noted.



                       Subpart A_Scope and Purpose



Sec. 627.100  Scope and purpose of this part 627.

    (a) This part sets forth requirements for implementation of programs 
under titles I, II, and III of the Job Training Partnership Act.
    (b) Subpart B provides general program requirements that apply to 
all programs under the titles I, II, and III of the Act, except as 
provided elsewhere in the Act or this chapter. These requirements 
include the Governor/Secretary agreement, the nondiscrimination and 
nonsectarian activity provisions, coordination provisions with Higher 
Education Act programs, and the prohibitions on public service 
employment, relocation assistance, displacement, and employment 
generating activities. This subpart also sets forth comprehensive rules 
for on-the-job training for JTPA participants as well as for work 
experience.
    (c) Subpart C sets forth requirements for allowable payments to JTPA 
participants.
    (d) Subpart D establishes the administrative and financial standards 
and requirements that apply to funds received under the Act.
    (e) Subpart E establishes the procedures that apply to the handling 
of noncriminal complaints under the Act at the Governor, the SDA, and 
title III SSG levels.
    (f) Subpart F establishes the procedures that apply to the filing, 
handling, and review of complaints at the Federal level.
    (g) Subpart G sets forth the provisions that apply to the sanctions 
and corrective actions that may be imposed by the Secretary for 
violations of the Act, regulations, or grant terms and conditions.
    (h) Subpart H sets forth procedures that apply to hearing by the 
Office of the Administrative Law Judges.

[[Page 193]]



                     Subpart B_Program Requirements



Sec. 627.200  Governor/Secretary agreement.

    (a)(1) To establish a continuing relationship under the Act, the 
Governor and the Secretary shall enter into a Governor/Secretary 
agreement. The agreement shall consist of a statement assuring that the 
State shall comply with (i) the Job Training Partnership Act and all 
applicable rules and regulations and (ii) the Wagner-Peyser Act and all 
applicable rules and regulations. The agreement shall specify that 
guidelines, interpretations, and definitions, adopted and issued by the 
Governor and identified pursuant to section 124 of the Act, shall, to 
the extent that they are consistent with the Act and applicable rules 
and regulations, be accepted by the Secretary.
    (2) Either the Governor or the Secretary may seek a modification, 
revision, or termination of the agreement at any time, to be effective 
at the end of a program year.
    (b) Except as provided at part B of title III of the Act and part 
631, subpart G, of this chapter, the State shall be the grant recipient 
of JTPA funds awarded under titles I, II, and III.



Sec. 627.201  Waivers.

    (a)(1) The Governor may request, and the Secretary may grant, a 
waiver of specific provisions of these regulations to the extent that 
such request is consistent with the provisions of the Act.
    (2) In requesting a waiver under paragraph (a)(1) of this section, 
the Governor shall demonstrate how it will either improve the targeting 
of services to the hard to serve, increase the level of basic and 
occupational skills training provided by the JTPA program in the State, 
contribute to the provision of academic enrichment services to youth, 
promote coordination of JTPA programs with other human resource 
programs, or substantially improve the job placement outcomes of the 
JTPA program.
    (3) Waivers granted by the Secretary shall be effective for no more 
than four years from the date the waiver is granted.



Sec. 627.205  Public service employment prohibition.

    No funds available under titles I, II-A, II-C, or III-A of the Act 
may be used for public service employment (sections 141(p) and 
314(d)(2)).



Sec. 627.210  Nondiscrimination and nonsectarian activities.

    (a)(1) Recipients, SDA grant recipients, title III substate 
grantees, and other subrecipients shall comply with the 
nondiscrimination provisions of section 167 of the Act.
    (2) Nondiscrimination and equal opportunity requirements and 
procedures, including complaint processing and compliance reviews, are 
governed by the provisions of 29 CFR part 34 and are administered and 
enforced by the DOL Directorate of Civil Rights.
    (3) Funds may be used to meet a recipient's or subrecipient's 
obligation to provide physical and programmatic accessibility and 
reasonable accommodation in regard to the JTPA program as required by 
Section 504 of the Rehabilitation Act of 1973, as amended, and the 
Americans with Disabilities Act of 1990.
    (b) The employment or training of participants in sectarian 
activities is prohibited.



Sec. 627.215  Relocation.

    (a) No funds provided under the Act shall be used, or proposed for 
use, to encourage or to induce the relocation of an establishment, or 
part thereof, that result in the loss of employment for any employee or 
such establishment at the original location.
    (b) For 120 days after the commencement or the expansion of 
commercial operations of a relocating establishment, no funds provided 
under this Act shall be used for customized or skill training, on-the-
job training, or company-specific assessments of job applicants or 
employees, for any relocating establishment or part thereof at a new, or 
expanded location, if the relocation of such establishment or part 
thereof results in a loss of employment for any employee of such 
establishment at the original location.
    (c) For the purposes of this section, relocating establishment means 
a business entity, including a successor-in-

[[Page 194]]

interest, which is moving any operations from a facility in one labor 
market area within the United States and its territories to a new or 
expanding facility in another labor market area. For the purposes of 
this section, a labor market area is an area within which individuals 
can readily change employment without changing their place of residence.
    (d) Pre-award review. To verify that an establishment which is new 
or expanding is not, in fact, relocating employment from another area, 
standardized pre-award review procedures developed by the State shall be 
completed and documented jointly by the service delivery area or 
substate grantee and the establishment as a prerequisite to JTPA 
assistance. The review should include names under which the 
establishment does business, including successors-in-interest; the name, 
title, and address of the company official certifying the information; 
the name and address of the facility in the other geographic location 
which is being closed or from which business is being transferred; a 
statement from the employer about job losses at that location; the 
nature of the products or business being transferred; the date the 
facility will commence or expand operations, and whether JTPA assistance 
is sought in connection with past or impending job losses at other 
facilities.
    (e) Violations and sanctions. The Department will promptly review 
and take appropriate action with regard to alleged violations of the 
provisions of paragraphs (a) and (b) of this section. Procedures for the 
investigation and resolution of the violations are provided for under 
subpart F of this part. Sanctions and remedies are provided for under 
subpart G of this part.



Sec. 627.220  Coordination with programs under title IV of the Higher 
Education Act including the Pell grant program.

    (a) Coordination. Financial assistance programs under title IV of 
the Higher Education Act of 1965, as amended (HEA) (the Pell Grant 
program, the Supplemental Education Opportunity Grant program, the Work-
study program, and Federal loan programs such as Federal Perkins Loans. 
Federal Stafford Loans and Federal Direct Stafford Loans) provide 
student financial aid and are available to JTPA participants enrolling 
in postsecondary level education programs. SDA's and title III SSG's 
shall establish coordination procedures and contractual safeguards to 
ensure that JTPA funds are used in addition to funds otherwise available 
in the area and are coordinated with these funding sources.
    (b) Affordable programs. (1) The SDA shall assist the participant 
early in the objective assessment, as appropriate, to establish 
eligibility for Pell Grants, student loans and other forms of financial 
aid.
    (2) The SDA or SSA shall record in the ISS or participant record the 
participant's training-related financial assistance needs and the mix of 
JTPA and other funds, including Pell Grant funds (sections 141(b), 
107(b), 205(b) and 265(b)).
    (3) The SDA shall ensure, to the extent practicable, that available 
Federal, State, and local resources are coordinated sufficiently to meet 
the training and education-related costs of services, so that the 
participant can afford to complete the agreed-upon program successfully.
    (4) Participants shall not be required to apply for or access 
student loans, or incur personal debt as a condition of JTPA 
participation.
    (c) Information sharing. To prevent duplication of funding and to 
streamline the tracking of the participant's financial needs and use of 
funds when HEA, title IV programs are involved, contracts and agreements 
with educational institutions shall require the educational 
institution's financial aid officer to inform the SDA's/SSG's of the 
amounts and disposition of any HEA, title IV awards and other types of 
financial aid to each JTPA participant awarded after the enrollment of 
the participant, as part of a continuing, regular information sharing 
process (section 141(b)).

[[Page 195]]



Sec. 627.225  Employment generating activities.

    (a)(1) No funds available under the Act shall be used for employment 
generating activities, economic development activities, investment in 
revolving loan funds, capitalization of businesses, investment in 
contract bidding resource centers, or similar activities.
    (2) No funds available under titles I, II, or III of the Act shall 
be used for foreign travel for employment generating activities, 
economic development activities, or similar activities.
    (b) JTPA funds may be used for normal employer outreach and job 
development activities including, but not limited to: contacts with 
potential employers for the purpose of placement of JTPA participants; 
participation in business associations (such as chambers of commerce); 
JTPA staff participation on economic development boards and commissions, 
and work with economic development agencies, to provide information 
about JTPA and to assist in making informed decisions about community 
job training needs; subscriptions to relevant publications; general 
dissemination of information on JTPA programs and activities; labor 
market surveys; and development of on-the-job training (OJT) 
opportunities, as defined in Sec. 627.240; and other allowable JTPA 
activities in the private sector.



Sec. 627.230  Displacement.

    (a) No currently employed worker shall be displaced by any 
participant (including partial displacement such as a reduction in the 
hours of nonovertime work, wages, or employment benefits).
    (b) No participant shall be employed or job opening filled: (1) When 
any other individual is on layoff from the same or any substantially 
equivalent job, or
    (2) When the employer has terminated any regular employee without 
cause or otherwise reduced its workforce with the intention of filling 
the vacancy so created by hiring a participant whose wages are 
subsidized under the Act.
    (c) Violations and sanctions. The Department will promptly review 
and take appropriate action with regard to alleged violations of the 
provisions of paragraphs (a) and (b) of this section. Procedures for the 
investigation and resolution of violations are provided for under 
subpart F of this part. Sanctions and remedies are provided for under 
subpart G of this part.



Sec. 627.235  General program requirements.

    (a) The requirements set forth in sections 141, 142 and 143 of the 
Act apply to all programs under titles I, II, and III of the Act, except 
as provided elsewhere in the Act.
    (b) Recipients shall ensure that an individual enrolled in a JTPA 
program meets the requirements of section 167(a)(5) of the Act, Section 
3 of the Military Selective Service Act (50 U.S.C. App. 453) and other 
requirements applicable to programs funded under the specific section or 
title of the Act under which the participant is enrolling (section 604).
    (c) Recipients shall ensure that individuals are enrolled within 45 
days of the date of eligibility determination or a new eligibility 
determination (including new application, if necessary) shall be made, 
except that eligible summer program applicants under title II-B may be 
enrolled within 45 days into a summer youth enrollee pool, and no 
subsequent eligibility determination need be made prior to participation 
during the period of that summer program. In addition, the 45-day 
enrollment requirement shall not apply for individuals who have a valid 
certificate of continuing eligibility under the title III program, as 
described in Sec. 631.3 and Sec. 631.53 of this chapter.
    (d) Programs operated under titles I, II, and III of the Act are not 
subject to the provisions of 29 CFR part 97, ``Uniform Administrative 
Requirements for Grants and Cooperative Agreements to State and Local 
Governments,'' except as otherwise explicitly provided in this chapter.
    (e) If a recipient or SDA imposes a requirement that is in addition 
to the provisions of the Act and these regulations relating to the 
administration and operation of programs funded by the Act, the 
recipient or SDA shall identify the requirement as a State- or

[[Page 196]]

SDA-imposed requirement (section 124).



Sec. 627.240  On-the-job training.

    (a) General--(1) On-the-job training (OJT) means training by an 
employer in the private or public sector given to a participant who, 
after objective assessment, and in accordance with the ISS, has been 
referred to and hired by the employer following the development of an 
agreement with the employer to provide occupational training in exchange 
for reimbursement of the employer's extraordinary costs. On-the-job 
training occurs while the participant is engaged in productive work 
which provides knowledge and skills essential to the full and adequate 
performance of the job.
    (2) This does not preclude a participant who has been trained by one 
employer from ultimately being placed in a comparable training-related 
position with another employer.
    (3) On-the-job training may be sequenced with or accompanied by 
other types of training such as classroom training or literacy training.
    (b) Duration of OJT. (1) OJT authorized for a participant shall be 
limited to a period not in excess of that required for the participant 
to acquire the skills needed for the OJT position. Except as described 
in paragraph (b) (3) of this section, the period of reimbursement to the 
employer under an OJT agreement shall not exceed 6 months of training.
    (2) The 6-month duration of OJT may be expressed as a number of 
hours, days, or weeks the participant is expected to work in a 6-month 
period if the participant works full-time.
    (3) In the event that a participant's regular employment is less 
than full-time and less than 500 hours of OJT has occurred by the end of 
6 months, that participant may remain in OJT until 499 hours OJT hours 
have occurred.
    (4)(i) Recipients shall develop policies and procedures for 
determining the average training duration for occupations including to 
reflect an individual participant's need for additional training time, 
or reduction in training time to reflect the individual participant's 
partial acquisition of needed skills. (In no case should an individual 
who is fully skilled in an occupation be placed in OJT in that 
occupation.)
    (ii) In determining the average training time, consideration should 
be given to recognized reference materials, such as the ``Dictionary of 
Occupational Titles'' (DOT) and employer training plans. Such materials 
need not be limited to the DOT, however.
    (5) On-the-job training is encouraged, but not required, in all 
occupations with significant training content, particularly in higher-
skill occupations appropriate to the participant's needs. Training plans 
may be developed that recognize the full duration of the OJT period 
necessary for the full and adequate performance of the job, but the 
period of reimbursement may not exceed the duration in paragraph (a)(1) 
or (a)(2) of this section.
    (6) When the OJT period in a given occupation for a participant for 
whom the ISS identifies OJT as appropriate varies from the average for 
that occupation, the basis for the variation shall be recorded in the 
ISS.
    (c) On-the-job training payments to employers. (1) On-the-job 
training payments to employers are deemed to be in compensation for the 
extraordinary costs associated with training participants and in 
compensation for the costs associated with the lower productivity of 
such participants. Employers shall not be required to document such 
extraordinary costs or lower productivity (section 141(g)(1)).
    (2)(i) On-the-job training payments to employers shall not, during 
the period of such training, average more than 50 percent of the wages 
paid by the employer to OJT participants.
    (ii) On-the-job training payments to employers may be based upon 
scheduled raises or regular pay increases.
    (iii) On-the-job training payments may not be based on overtime, 
shift differential, premium pay and other nonregular wages paid by the 
employer to participants.
    (iv) On-the-job training payments may not be based upon periods of 
time such as illness, holidays, plant downtime or other events in which 
no training occurs.
    (3) Employers which provide classroom or vestibule training to meet 
the

[[Page 197]]

specific training needs of JTPA participants to equip them with 
education and knowledge necessary to the OJT occupation may be 
separately reimbursed for training costs, such as instructors and 
training material.
    (d) On-the-job training agreements. (1) Each OJT agreement shall, at 
a minimum, specify the occupation(s) for which training is to be 
provided, the duration of the training, the number of participants to be 
trained in each occupation, wage rates to be paid, the rate of 
reimbursement, the maximum amount of reimbursement, a job description or 
training outline that reflects what the participant will learn, and any 
other separate classroom training that may be provided.
    (2) The agreement shall provide that the employer will maintain and 
make available time and attendance, payroll and other records to support 
amounts reimbursed under OJT contracts.
    (e) Labor standards. OJT participants shall be compensated by the 
employer at the same rates, including periodic increases, as similarly 
situated employees, but in no event less than the higher of the minimum 
wage specified under the Fair Labor Standards Act of 1938, as amended or 
the applicable State or local minimum wage. Participants must receive 
the same benefits and have the same working conditions as similarly 
situated employees.
    (f) Suitability of participants. (1) Only those participants who 
have been assessed and for whom OJT has been determined as an 
appropriate activity in the participant's ISS may be referred to an 
employer for participation in OJT.
    (2) An individual referred to the JTPA program by an employer may be 
enrolled in an OJT program with such employer only upon completion of 
the objective assessment and individual service strategy in which OJT 
with such employer has been determined to be an appropriate activity and 
only if the employer has not already hired such individual.
    (3) OJT with the participant's previous or current employer in the 
same, a similar, or an upgraded job is not permitted.
    (g) Monitoring. (1) OJT agreements shall be monitored periodically 
on-site by the entity issuing the contract to assure that the validity 
and propriety of amounts claimed for reimbursement are substantiated by 
payroll and time and attendance records and that the training is being 
provided as specified in the agreement.
    (2) Brokering contractors shall conduct on-site monitoring of the 
OJT employers and other subcontractors to verify compliance with 
subcontract terms before making payments.
    (3) Nothing in this paragraph (g) shall relieve recipients and SDA's 
from responsibility for monitoring expenditures under the Act.
    (h) Employer eligibility. (1) OJT agreements shall not be entered 
into with employers which, under previous agreements, have exhibited a 
pattern of failing to provide OJT participants with continued long-term 
employment as regular employees with wages, benefits and working 
conditions at the same level and to the same extent as similarly 
situated employees. This prohibition does not apply to OJT agreements 
for youth in the program under title II-B who are returning to school.
    (2) Governors shall issue procedures and criteria to implement the 
requirement in paragraph (h)(1) of this section, which shall specify the 
duration of the period of loss of eligibility. The procedures and 
criteria shall provide that situations in which OJT participants quit 
voluntarily, are terminated for cause, or are released due to 
unforeseeable changes in business conditions will not necessarily result 
in termination of employer eligibility.
    (i) Brokered OJT. Each agreement with an OJT employer that is 
written by a brokering contractor (not written directly by the SDA/SSA 
or recipient) shall specify and clearly differentiate the services to be 
provided by the brokering contractor (including but not limited to 
outreach, recruitment, training, counseling, assessment, placement, 
monitoring, and followup), the employer and other agencies and 
subcontractors, including services provided with or without cost by 
other agencies or subcontractors.
    (j) Youth OJT. OJT conducted under title II-C shall meet the 
requirements of subpart H of part 628 of this chapter (628.804), as well 
as the requirements of

[[Page 198]]

this section. Where OJT is provided to youth concurrently enrolled under 
titles II-B and II-C, the source of funding for the OJT shall govern 
which requirements apply.
    (k) Employment and employee leasing agencies.
    (1) Definition. The terms employment agency and employee leasing 
agency mean an employer that provides regular, on-going employment 
(i.e., not probationary, temporary, or intermittent employment) in a 
specific occupation and, for a fee, places employees at the worksite of 
another employer to perform work for such employer.
    (2) Employment and employee leasing agencies that meet the other 
requirements of this section may be eligible for OJT agreements when the 
agreement specifies the source of training and specifies that the 
payments are for the extraordinary training costs of the entity 
providing the training.



Sec. 627.245  Work experience.

    (a) Definition.--Work Experience means a short-term or part-time 
training assignment with a public or private nonprofit organization for 
a participant who needs assistance in becoming accustomed to basic work 
requirements. It is prohibited in the private for-profit sector.
    (b) Suitability. Work experience should be designed to promote the 
development of good work habits and basic work skills.
    (c) Duration of work experience. Participation in work experience 
shall be for a reasonable length of time, based on the needs of the 
participant. The duration of work experience shall be recorded in the 
participant's ISS.
    (d) Combination with other services. Work experience under titles 
II-A and C shall be accompanied either concurrently or sequentially by 
other services designed to increase the basic education and/or 
occupational skills of the participant, as recorded in the ISS.
    (e) Work experience is not an allowable activity under title III of 
the Act. (Sections 204(b) and (c), 253(a), and 264 (c) and (d).)



Sec. 627.250  Interstate agreements.

    The Secretary hereby grants authority to the several States to enter 
into interstate agreements and compacts in accordance with section 127 
of the Act and, as specified in Sec. 627.420(g), Procurement.



   Subpart C_Payments, Supportive Services, and Benefits and Working 
                               Conditions



Sec. 627.300  Scope and purpose.

    This subpart sets forth requirements for allowable payments to JTPA 
participants under titles I and II. These include needs-based payments 
under title II, incentive and bonus payments under title II, work-based 
training payments under title II, and payments for combined activities 
under title II. Requirements for supportive services under titles I, II, 
and III, including financial assistance and needs-related payments, are 
also included in this subpart. This subpart also sets forth rules for 
benefits and working conditions for JTPA participants. These include 
requirements for: Compliance with applicable labor laws; workers' 
compensation coverage or medical and accident insurance where there is 
no State workers' compensation coverage; and working conditions which 
are not detrimental to the participant's health and safety.



Sec. 627.305  Payments.

    (a)(1) General. Allowable types of payments which may be made to 
participants are: Needs-based payments for eligible individuals in 
programs under title II; incentive and bonus payments for participants 
in title II programs; work-based training payments for work experience, 
entry employment experience, internships and other work-based training 
activities; payments for participants in title II-B activities; and 
training payments for combined activities in title II programs. These 
payments shall be made in accordance with paragraphs (b) through (f) of 
this section.
    (2) A participant shall receive no payments for training activities 
in which the participant fails to participate without good cause 
(section 142(a)(1)).
    (3) The SDA shall ensure to the extent possible that similarly 
situated participants receive similar payments.

[[Page 199]]

    (4) Payments to participants, broadly defined for this subsection as 
all funds distributed to participants except OJT wages, shall not be 
considered as income for the purposes of determining eligibility for and 
the amount of income transfer and in-kind aid furnished under any 
Federal or federally assisted program based on need, other than as 
provided under the Social Security Act (section 142(b)).
    (5) The SDA is responsible for meeting any applicable Internal 
Revenue Service and Fair Labor Standards Act requirements (section 
142(a)(3)).
    (6) An SDA may set fixed levels for any non-wage payment.
    (b) Needs-based payments. (1) Participants in programs funded under 
title II may receive needs-based payments when such payments are 
necessary to enable the individual to participate in training programs. 
Payments shall be made in accordance with a locally developed policy 
which is included in the job training plan approved by the Governor.
    (2) The individual determination of participants' needs-based 
payments and the amount of such payments shall be based upon the results 
of the continuing objective assessment and determined in accordance with 
a locally developed policy. The provisions and amount of such payments 
shall be recorded in the ISS.
    (c) Incentive and bonus payments. Participants in programs funded 
under title II may receive incentive and bonus payments based on their 
attendance and performance in accordance with a locally developed 
policy. The policy shall be described in the job training plan approved 
by the Governor and shall include a specification of the requirements 
for the receipt of such payments and the level of payments.
    (d) Work-based training payments. Individuals participating in work 
experience, in entry employment experience programs, in limited 
internships for youth in the private sector, or in other work-based 
training activities under title II of the Act may receive work-based 
training payments which may be wages.
    (e) Summer participants may receive training payments for 
participation in activities under title II-B.
    (f) Training payments for combined activities. For title II 
programs, participants in one of the activities described in paragraph 
(d) of this section for which work-based training payments are payable 
for more than 50 percent of the participant's time, including classroom 
training, may also receive training payments for hours of participation 
in classroom training.



Sec. 627.310  Supportive services.

    (a)(1) The SDA or SSG shall develop a policy on supportive services 
in accordance with the definition at section 4(24) of the Act. This 
policy shall be included in the job training plan approved by the 
Governor (section 4(24)). Supportive services may be provided to 
participants through in-kind or cash assistance, or by arrangement with 
another human service agency when necessary to enable an individual who 
is eligible for training under a JTPA assisted program, but who cannot 
afford to pay for such services, to participate in such JTPA-assisted 
program.
    (2) In the event that an SDA or SSG adopts a policy of providing a 
fixed reimbursement for a particular supportive service to all 
participants, it shall, as part of its policy, state the rationale for 
its choice and the fixed amounts it has adopted.
    (b) Limited supportive services may be provided to applicants in 
order to permit them to complete the application process.
    (c) Necessary supportive services shall be recorded in a 
participant's ISS under title II or should be recorded in a 
participant's individual readjustment plan under title III. When 
supportive services are provided in accordance with paragraph (b) of 
this section, information on any supportive service provided may be 
maintained for future inclusion in an ISS.
    (d) The SDA or SSG shall ensure, to the extent possible, that 
similarly situated participants receive similar supportive services.
    (e) For title II participants, necessary supportive services (with 
the exception of financial assistance) may be provided for up to one 
year following termination as post-termination or followup services 
(sections 4(24), 204(b)(2)(J), and 204(c)(4)). For title III

[[Page 200]]

participants, the provisions at section 314(c)(15) of the Act shall 
apply.
    (f) An SDA or SSG may set fixed levels of benefit for any supportive 
service.
    (g)(1) For purposes of title II, financial assistance is defined as 
a general supportive service payment for the purpose of retaining 
participants in training.
    (2) Financial assistance payments may be considered to be necessary 
for participation in training for title II participants, i.e., a 
separate, individual determination of need is not necessary.
    (h) Needs-related payments. The requirements pertaining to needs-
related payments provided for under section 315(b) under title III of 
the Act, are described in part 631 of this chapter.



Sec. 627.315  Benefits and working conditions.

    (a) In the development and conduct of programs funded under the Act, 
SDA's and SSG's shall ensure that participants are not assigned to work 
for employers which do not comply with applicable labor laws, including 
wage and hour, occupational health and safety, and child labor laws (29 
CFR part 570).
    (b) To the extent that a State workers' compensation law is 
applicable, workers' compensation benefits in accordance with such law 
shall be available with respect to injuries suffered by participants. 
Where a State's workers' compensation law is not applicable, recipients 
and subrecipients shall secure insurance coverage for injuries suffered 
by such participants in all JTPA work-related activities. Income 
maintenance coverage (e.g., contributions for unemployment 
compensation), is not required for participants (section 143(a)(3)).
    (c) Where a participant is engaged in activities not covered under 
the Occupational Safety and Health Act of 1970, as amended, the 
participant shall not be required or permitted to work, be trained, or 
receive services in buildings or surroundings or under working 
conditions which are unsanitary, hazardous, or dangerous to the 
participant's health or safety. A participant employed or trained for 
inherently dangerous occupations, e.g., fire or police jobs, shall be 
assigned to work in accordance with reasonable safety practices (section 
143(a)(2)).



                   Subpart D_Administrative Standards



Sec. 627.400  Scope and purpose.

    This subpart establishes the administrative and financial standards 
and requirements that apply to funds received under the Act.



Sec. 627.405  Grant agreement and funding.

    (a)(1) Pursuant to Sec. 627.200 of this part and the Governor/
Secretary agreement, each program year there will be executed a grant 
agreement signed by the Governor or the Governor's designated 
representative and the Secretary or the Secretary's designated 
representative (Grant Officer).
    (2) The grant agreement described in paragraph (a)(1) of this 
section shall be the basis for Federal obligation of funds for the 
program year for programs authorized by titles I, II, and III, including 
any title III discretionary projects awarded to the State, and such 
other funds as the Secretary may award under the grant.
    (b) Funding. The Secretary shall allot funds to the States in 
accordance with sections 162, 202, 252, 262, and 302 of the Act. The 
Secretary shall obligate such allotments through Notices of Obligation.
    (c) Pursuant to instructions issued by the Secretary, additional 
funds may be awarded to States for the purpose of carrying out the 
administrative activities described in section 202(c)(1)(A) when a State 
receives an amount under such section that is less than $500,000 
(section 453(d)).
    (d) Termination. Each grant shall terminate when the period of 
availability for expenditure (funding period), as specified in section 
161(b) of the Act, has expired and shall be closed in accordance with 
Sec. 627.485, of this part, Closeout.



Sec. 627.410  Reallotment and reallocation.

    (a)(1) The Governor shall reallocate title II-A and II-C funds among 
service delivery areas within the State in accordance with the 
provisions of section

[[Page 201]]

109(a) of the Act. The amount to be reallocated, if any, shall be based 
on SDA obligations of the funds allocated separately to each SDA for 
title II-A or II-C programs.
    (2) The Governor shall not establish reallocation requirements that 
are inconsistent with the provisions of section 109(a) of the Act.
    (b) The Secretary shall reallot title II-A and II-C funds among the 
States in accordance with the provisions of section 109(b) of the Act. 
The amounts to be reallotted, if any, shall be based on State 
obligations of the funds allotted separately to each State for title II-
A or II-C programs, excluding funds allotted under section 202(c)(1)(D) 
and the State's obligation of such funds.
    (c) Title III funds shall be reallotted by the Secretary in 
accordance with section 303 of the Act.



Sec. 627.415  Insurance.

    (a) General. Each recipient and subrecipient shall follow its normal 
insurance procedures except as otherwise indicated in this section and 
Sec. 627.465, Property Management Standards.
    (b) DOL assumes no liability with respect to bodily injury, illness, 
or any other damages or losses, or with respect to any claims arising 
out of any activity under a JTPA grant or agreement whether concerning 
persons or property in the recipient's or any subrecipient's 
organization or that of any third party.



Sec. 627.420  Procurement.

    (a) General. (1) For purposes of this section, the term procurement 
means the process which leads to any award of JTPA funds.
    (2) The Governor, in accordance with the minimum requirements 
established in this section, shall prescribe and implement procurement 
standards to ensure fiscal accountability and prevent waste, fraud, and 
abuse in programs administered under this Act.
    (3) When procuring property and services, a State shall follow the 
same policies and procedures it uses for procurements from its non-
Federal funds, provided that the State's procurement procedures also 
comply with the minimum requirements of this section.
    (4) Each subrecipient shall use its own procurement procedures which 
reflect applicable State and local laws and regulations, provided that 
the subrecipient's procurement procedures also comply with the 
requirements of this section and the standards established by the 
Governor, pursuant to paragraph (a)(2) of this section.
    (5) States and subrecipients shall not use funds provided under JTPA 
to duplicate facilities or services available in the area (with or 
without reimbursement) from Federal, State, or local sources, unless it 
is demonstrated that the JTPA-funded alternative services or facilities 
would be more effective or more likely to achieve performance goals 
(sections 107(b) and 141(h)).
    (6) Awards are to be made to responsible organizations possessing 
the demonstrated ability to perform successfully under the terms and 
conditions of a proposed subgrant or contract. A determination of 
demonstrated ability shall be done in accordance with the requirements 
contained in Sec. 627.422 (b) and (d).
    (b) Competition. (1) Each State and subrecipient shall conduct 
procurements in a manner which provides full and open competition. Some 
of the situations considered to be restrictive of competition include, 
but are not limited to:
    (i) Placing unreasonable requirements on firms or organizations in 
order for them to qualify to do business;
    (ii) Requiring unnecessary experience and excessive bonding;
    (iii) Noncompetitive pricing practices between firms or 
organizations or between affiliated companies or organizations;
    (iv) Noncompetitive awards to consultants that are on retainer 
contracts;
    (v) Organizational conflicts of interest;
    (vi) Specifying only a ``brand name'' product instead of allowing 
``an equal'' product to be offered and describing the performance of 
other relevant requirements of the procurement;
    (vii) Overly restrictive specifications; and
    (viii) Any arbitrary action in the procurement process.

[[Page 202]]

    (2) Each State and subrecipient shall have written procedures for 
procurement transactions. These procedures shall ensure that all 
solicitations:
    (i) Incorporate a clear and accurate description of the technical 
requirements for the material, product, or service to be procured 
(including quantities). Such description shall not, in competitive 
procurements, contain features which unduly restrict competition; and
    (ii) Identify all requirements which the offerors must fulfill and 
all other factors to be used in evaluating bids or proposals.
    (3) Each State and subrecipient shall ensure that all prequalified 
lists of persons, firms, or other organizations which are used in 
acquiring goods and services are current and include sufficient numbers 
of qualified sources to ensure maximum open and free competition.
    (c) Conflict of interest. (1) Each recipient and subrecipient shall 
maintain a written code of standards of conduct governing the 
performance of persons engaged in the award and administration of JTPA 
contracts and subgrants. To the extent permitted by State or local law 
or regulation, such standards of conduct will provide for penalties, 
sanctions, or other disciplinary actions for violations of such 
standards by the awarding agency's officers, employees, or agents, or by 
awardees or their agents.
    (2) Staff conflict of interest. Each recipient and subrecipient 
shall ensure that no individual in a decisionmaking capacity shall 
engage in any activity, including participation in the selection, award, 
or administration of a subgrant or contract supported by JTPA funds if a 
conflict of interest, real or apparent, would be involved.
    (3) PIC conflict of interest. (i) A PIC member shall not cast a 
vote, nor participate in any decisionmaking capacity, on the provision 
of services by such member (or any organization which that member 
directly represents), nor on any matter which would provide any direct 
financial benefit to that member.
    (ii) Neither membership on the PIC nor the receipt of JTPA funds to 
provide training and related services shall be construed, by itself, to 
violate provisions of section 141(f) of the Act or Sec. 627.420.
    (4) A conflict of interest under paragraphs (c) (2) and (3) of this 
section would arise when:
    (i) The individual,
    (ii) Any member of the individual's immediate family,
    (iii) The individual's partner, or
    (iv) An organization which employs, or is about to employ, any of 
the above, has a financial or other interest in the firm or organization 
selected for award.
    (5) The officers, employees, or agents of the agency and PIC members 
making the award will neither solicit nor accept gratuities, favors, or 
anything of monetary value from awardees, potential awardees, or parties 
to subagreements. States and subrecipients may set minimum rules where 
the financial interest is not substantial or the gift is an unsolicited 
item of nominal intrinsic value.
    (d) Methods of procurement. (1) Each State and subrecipient shall 
use one of the following methods of procurement, as appropriate for each 
procurement action:
    (i) Small purchase procedures--simple and informal procurement 
methods for securing services, supplies, or other property that do not 
cost more than $25,000 in the aggregate. Recipients and subrecipients 
shall not break down one purchase into several purchases merely to be 
able to use small purchase procedures. The Governor shall establish 
standards for small purchase procedures to ensure that price or rate 
quotations will be documented from an adequate number of qualified 
sources.
    (ii) Sealed bids (formal advertising)--bids are publicly solicited 
procurements for which a firm-fixed-price award (lump sum or unit price) 
or other fixed-price arrangement is awarded to the responsible bidder 
whose bid, conforming with all the material terms and conditions of the 
invitation for bids, is the lowest in price. The Governor shall 
establish standards for sealed bids which include requirements that 
invitations for bids be publicly advertised, and that bids be solicited 
from an adequate number of organizations.

[[Page 203]]

    (iii) Competitive proposals--normally conducted with more than one 
source submitting an offer and either a fixed-price or cost-
reimbursement type award is made. The Governor shall establish standards 
for competitive proposals which include requirements for the 
establishment of a documented methodology for technical evaluations and 
award to the responsible offeror whose proposals are most advantageous 
to the program with price, technical, and other factors considered.
    (iv) Noncompetitive proposals (sole source)--procurement through 
solicitation of a proposal from only one source, the funding of an 
unsolicited proposal, or when, after solicitation of a number of 
sources, competition is determined inadequate. Each State and 
subrecipient shall minimize the use of sole source procurements to the 
extent practicable, but in every case the use of sole source 
procurements shall be justified and documented. On-the-job training 
(OJT) awards (except OJT brokering awards, which shall be selected 
competitively) and the enrollment of individual participants in 
classroom training may be sole sourced. For all other awards, 
procurement by noncompetitive proposals may be used only when the award 
is infeasible under small purchase procedures, sealed bids, or 
competitive proposals and one of the following circumstances applies:
    (A) The item or service is available only from a single source;
    (B) The public exigency or emergency need for the item or service 
does not permit a delay resulting from competitive solicitation;
    (C) For SDAs, SSGs and subrecipients, the awarding agency authorizes 
noncompetitive proposals; for States, the noncompetitive proposal is 
approved through the State's normal sole source approval process;
    (D) After solicitation of a number of sources, competition is 
determined inadequate;
    (2) Pass Throughs--The procurement rules do not apply to pass 
throughs of monies from any unit of State or local government (or SDA or 
SSG administrative entities) to other such units, such as a local 
educational agency or public housing authority. To qualify as a pass 
through, the receiving entity must either further pass through the 
monies to another such entity or procure services in accordance with the 
procurement rules.
    (e) Cost or price analysis. (1) Each recipient, in accordance with 
the minimum requirements established in this section, shall establish 
standards on the performance of cost or price analysis.
    (2) Each recipient and subrecipient shall perform a cost or price 
analysis in connection with every procurement action, including 
modifications (except for modifications where a determination has been 
made that they do not have a monetary impact). The method and degree of 
analysis depends on the facts surrounding the particular procurement and 
pricing situation. At a minimum, the awarding agency shall make 
independent estimates before receiving bids or proposals. A cost 
analysis is necessary when the offeror is required to submit the 
elements of the estimated cost (e.g., as in the case of subrecipient 
relationships), when adequate price competition is lacking, and for sole 
source procurements, including modifications or change orders. A price 
analysis shall be used when price reasonableness can be established on 
the basis of a catalog or market price of a commercial product sold in 
substantial quantities to the general public or based on prices set by 
law or regulation (including situations involving inadequate price 
competition and sole source procurements where a price analysis may be 
used in lieu of a cost analysis). When a cost analysis is necessary and 
there is inadequate price competition, the offeror shall certify that to 
the best of its knowledge and belief, the cost data are accurate, 
complete, and current at the time of agreement on price. Awards or 
modifications negotiated in reliance on such data should provide the 
awarding agency a right to a price adjustment to exclude any significant 
sum by which the price was increased because the awardee had knowingly 
submitted data that were not accurate, complete, or current as 
certified.
    (3) JTPA procurements shall not permit excess program income (for 
nonprofit and governmental entities) or

[[Page 204]]

excess profit (for private for-profit entities). If profit or program 
income is included in the price, the awarding agency shall negotiate 
profit or program income as a separate element of the price for each 
procurement in which there is no price competition and in all cases 
where cost analysis is performed. To establish a fair and reasonable 
profit or program income, consideration shall be given to:
    (i) The complexity of the work to be performed;
    (ii) The risk borne by the awardee;
    (iii) The offeror's investment;
    (iv) The amount of subcontracting/subgranting;
    (v) The quality of the offeror's record of past performance;
    (vi) Industry profit rates in the surrounding geographical area for 
similar work; and
    (vii) Market conditions in the surrounding geographical area.
    (4) Each recipient and subrecipient may charge to the agreement only 
those costs which are consistent with the allowable cost provisions of 
Sec. 627.435 of this part, including the guidelines issued by the 
Governor, as required at Sec. 627.435(i) of this part.
    (5) The cost plus a percentage of cost method shall not be used.
    (f) Oversight. (1) Each recipient and subrecipient shall conduct and 
document oversight to ensure compliance with the procurement standards, 
in accordance with the requirements of Sec. 627.475 of this part, 
Oversight and monitoring.
    (2) Each recipient and subrecipient shall maintain an administration 
system which ensures that vendors and subrecipients perform in 
accordance with the terms, conditions, and specifications of their 
awards.
    (g) Transactions between units of government. (1) Except as provided 
in paragraph (g)(2) of this section, procurement transactions between 
units of State or local governments, or any other entities organized 
principally as the administrative entity for service delivery areas or 
substate areas, shall be conducted on a cost reimbursable basis. Cost 
plus type awards are not allowable.
    (2) In the case of procurement transactions with schools that are a 
part of these entities, such as State universities and secondary 
schools, when tuition charges or entrance fees are not more than the 
educational institution's catalogue price, necessary to receive specific 
training, charged to the general public to receive the same training, 
and for training of participants, the tuition and/ or entrance fee does 
not have to be broken out by items of cost.
    (h) Award provisions. Each recipient and subrecipient agreement 
shall:
    (1) Clearly specify deliverables and the basis for payment; and
    (2) In the case of awards to subrecipients, contain clauses that 
provide for:
    (i) Compliance with the JTPA regulations;
    (ii) Assurance of nondiscrimination and equal opportunity as found 
in 29 CFR 34.20, Assurance required; duration of obligation; covenants.
    (3) In the case of awards to vendors, contain clauses that provide 
for:
    (i) Access by the recipient, the subrecipient, the Department of 
Labor, the Comptroller General of the United States, or any of their 
duly authorized representatives to any books, documents, papers, and 
records (including computer records) of the contractor or subcontractor 
which are directly pertinent to charges to the program, in order to 
conduct audits and examinations and to make excerpts, transcripts, and 
photocopies; this right also includes timely and reasonable access to 
contractor's and subcontractor's personnel for the purpose of interviews 
and discussions related to such documents;
    (4) In the case of awards to both subrecipients and vendors, contain 
clauses that provide for:
    (i) Administrative, contractual, or legal remedies in instances 
where contractors/subgrantees violate or breach agreement terms, which 
shall provide for such sanctions and penalties as may be appropriate;
    (ii) Notice of 29 CFR 97.34 requirements pertaining to copyrights 
(agreements which involve the use of copyrighted materials or the 
development of copyrightable materials);
    (iii) Notice of requirements pertaining to rights to data. 
Specifically,

[[Page 205]]

the awarding agency and the Department of Labor shall have unlimited 
rights to any data first produced or delivered under the agreement 
(agreements which involve the use/development of computer programs/ 
applications, or the maintenance of databases or other computer data 
processing program, including the inputing of data);
    (iv) Termination for cause and for convenience by the awarding 
agency, including the manner by which the termination will be effected 
and the basis for settlement;
    (v) Notice of awarding agency requirements and regulations 
pertaining to reporting;
    (vi) Audit rights and requirements;
    (vii) Payment conditions and delivery terms;
    (viii) Process and authority for agreement changes; and
    (ix) Provision against assignment;
    (5) The Governor may establish additional clauses, as deemed 
appropriate, for State and subrecipient procurements.
    (i) Disputes. (1) The Governor shall ensure that the recipient and 
each subrecipient have protest procedures to handle and resolve disputes 
relating to their procurements. A protester shall exhaust all 
administrative remedies with the subrecipient before pursuing a protest 
at a higher level.
    (2) Violations of law will be handled in accordance with the 
requirements contained in Sec. 627.500(c).
    (j) Each recipient and subrecipient shall maintain records 
sufficient to detail the significant history of a procurement. These 
records shall include, but are not necessarily limited to, the 
following: rationale for the method of procurement, selection of 
agreement type, awardee selection or rejection, and the basis for the 
agreement price.



Sec. 627.422  Selection of service providers.

    (a) Service providers selected under titles I, II, and III of the 
Act shall be selected in accordance with the provisions of section 107 
of the Act, except that section 107(d) shall not apply to training under 
title III.
    (b) Consistent with the requirements of this section, the Governor 
shall establish standards to be followed by recipients and subrecipients 
in making determinations of demonstrated performance, prior to the award 
of all agreements under titles I, II, and III of the Act. These 
standards shall comply with the requirements of this section, Sec. 
627.420, of this part, Procurement, and section 164(a)(3) of the Act. 
The standards shall require that determinations of demonstrated 
performance will be in writing, and completed prior to the award of an 
agreement.
    (c) Each recipient and subrecipient, to the extent practicable, 
shall select service providers on a competitive basis, in accordance 
with the standards established in Sec. 627.420(b) of this part, 
Procurement. When a State, SDA, SSG, or administrative entity determines 
that services other than intake and eligibility determination will be 
provided by its own staff, a determination shall be made of the 
demonstrated performance of the entity to provide the services. This 
determination: Shall be in writing; shall take into consideration the 
matters listed in paragraph (d) of this section; and may, if 
appropriate, be documented and described in the Job Training Plan, 
GCSSP, or EDWAA plan.
    (d) Awards are to be made to organizations possessing the 
demonstrated ability to perform successfully under the terms and 
conditions of a proposed subgrant or contract. Where comparable 
proposals have been received from an offeror which has demonstrated 
performance and a high-risk recipient/subrecipient, and a determination 
has been made that both proposals are fundable, the award should be made 
to the offeror which has demonstrated performance, unless other factors 
dictate a contrary result. Determinations of demonstrated performance 
shall be in writing, and take into consideration such matters as whether 
the organization has:
    (1) Adequate financial resources or the ability to obtain them;
    (2) The ability to meet the program design specifications at a 
reasonable cost, as well as the ability to meet performance goals;
    (3) A satisfactory record of past performance (in job training, 
basic skills training, or related activities), including demonstrated 
quality of training;

[[Page 206]]

reasonable drop-out rates from past programs; where applicable, the 
ability to provide or arrange for appropriate supportive services as 
specified in the ISS, including child care; retention in employment; and 
earning rates of participants;
    (4) For title II programs, the ability to provide services that can 
lead to the achievement of competency standards for participants with 
identified deficiencies;
    (5) A satisfactory record of integrity, business ethics, and fiscal 
accountability;
    (6) The necessary organization, experience, accounting and 
operational controls; and
    (7) The technical skills to perform the work.
    (e) In selecting service providers to deliver services in a service 
delivery area/substate area, proper consideration shall be given to 
community-based organizations (section 107(a)). These community-based 
organizations, including women's organizations with knowledge about or 
experience in nontraditional training for women, shall be organizations 
which are recognized in the community in which they are to provide 
services. Where proposals are evenly rated, and one of these proposals 
has been submitted by a CBO, the tie breaker may go to the CBO.
    (f) Appropriate education agencies in the service delivery area/
substate area shall be provided the opportunity to provide educational 
services, unless the administrative entity demonstrates that alternative 
agency(ies) or organization(s) would be more effective or would have 
greater potential to enhance the participants' continued educational and 
career growth (section 107(c)). Where proposals are evenly rated, and 
one of these proposals has been submitted by an educational institution, 
the tie breaker shall go to the educational institution.
    (g) In determining demonstrated performance of institutions/
organizations which provide training, such performance measures as 
retention in training, training completion, job placement, and rates of 
licensure shall be taken into consideration.
    (h) Service providers under agreements to conduct projects under 
section 123(a)(2) shall be selected in accordance with the requirements 
of this section.
    (i) The requirements of section 204(d)(2)(B) shall be followed in 
entering into agreements to provide services for older individuals 
funded under title II, part A.
    (j) Additional requirements for selection of service providers by 
substate grantees are described at section 313(b)(6) of the Act and 
Sec. 631.52 of this chapter.
    (k) Amounts for service providers. Each SDA/SSG shall ensure that, 
for all services provided to participants through contracts, grants, or 
other agreements with a service provider, such contract, grant, or 
agreement shall include appropriate amounts necessary for administration 
and supportive services (section 108(b)(5)).
    (l) When a State, SDA or SSG has a policy of awarding additional 
points to proposals received from such organizations as minority 
business enterprises and women-owned businesses, and this policy is 
generally applicable to its other funds, the State, SDA or SSG may apply 
this policy to the JTPA funds.



Sec. 627.423  Funding restrictions for ``high-risk'' recipients and 
subrecipients.

    (a) A recipient or subrecipient may be considered ``high-risk'' if 
an awarding agency determines that the recipient or subrecipient is 
otherwise responsible, but:
    (1) Has a history of unsatisfactory performance;
    (2) Is not financially stable;
    (3) Has a management system which does not meet the management 
standards set forth in this part; or
    (4) Has not conformed to terms and conditions of a previously 
awarded grant or subgrant.
    (b) If the awarding agency determines that an award will be made to 
a ``high-risk'' recipient or subrecipient, then special funding 
restrictions that address the ``high-risk'' status may be included in 
the award. Funding restrictions may include, but are not limited to:
    (1) Payment on a reimbursement basis;

[[Page 207]]

    (2) Requiring additional and/or more detailed financial or 
performance reports;
    (3) Additional monitoring;
    (4) Requiring the recipient or subrecipient to obtain specific 
technical or management assistance; and/or
    (5) Establishing additional prior approvals.
    (c) If an awarding agency decides to impose such funding 
restrictions, the awarding official will notify the recipient or 
subrecipient as early as possible, in writing, of:
    (1) The nature of the funding restrictions;
    (2) The reason(s) for imposing them;
    (3) The corrective actions which must be taken before they will be 
removed and the time allowed for completing the corrective actions; and
    (4) The method of requesting reconsideration of the restrictions 
imposed.



Sec. 627.424  Prohibition of subawards to debarred and suspended parties.

    (a) No recipient or subrecipient shall make any awards or permit any 
awards at any tier to any party which is debarred or suspended or is 
otherwise excluded from or ineligible for participation in Federal 
assistance programs in accordance with the Department of Labor 
regulations at 29 CFR part 98.
    (b) Recipients and subrecipients shall comply with the applicable 
requirements of the Department of Labor regulations at 29 CFR part 98.



Sec. 627.425  Standards for financial management and participant data 
systems.

    (a)(1) General. The financial management system and the participant 
data system of each recipient and subrecipient shall provide federally 
required records and reports that are uniform in definition, accessible 
to authorized Federal and State staff, and verifiable for monitoring, 
reporting, audit, program management, and evaluation purposes (sections 
165(a)(1) and (2), and 182).
    (2) An awarding agency may review the adequacy of the financial 
management system and participant data system of any recipient/
subrecipient as part of a preaward review or at any time subsequent to 
award.
    (b) Financial systems. Recipients and subrecipients shall ensure 
that their own financial systems as well as those of their subrecipients 
provide fiscal control and accounting procedures that are:
    (1) In accordance with generally accepted accounting principles 
applicable in each State including:
    (i) Information pertaining to subgrant and contract awards, 
obligations, unobligated balances, assets, liabilities, expenditures, 
and income;
    (ii) Effective internal controls to safeguard assets and assure 
their proper use;
    (iii) A comparison of actual expenditures with budgeted amounts for 
each subgrant and contract;
    (iv) Source documentation to support accounting records; and
    (v) Proper charging of costs and cost allocation; and
    (2) Sufficient to:
    (i) Permit preparation of required reports;
    (ii) Permit the tracing of funds to a level of expenditure adequate 
to establish that funds have not been used in violation of the 
applicable restrictions on the use of such funds;
    (iii) As required by section 165(g), permit the tracing of program 
income, potential stand-in costs and other funds that are allowable 
except for funding limitations, as defined in Sec. 627.480(f) of this 
part, Audits; and
    (iv) Demonstrate compliance with the matching requirement of section 
123(b)(2).
    (c) Applicant and participant data systems. Each recipient and 
subrecipient shall ensure that records are maintained:
    (1) Of each applicant for whom an application has been completed and 
a formal determination of eligibility or ineligibility made;
    (2) Of each participant's enrollment in a JTPA-funded program in 
sufficient detail to demonstrate compliance with the relevant 
eligibility criteria attending a particular activity and with the 
restrictions on the provision and duration of services and specific 
activities imposed by the Act; and

[[Page 208]]

    (3) Of such participant information as may be necessary to develop 
and measure the achievement of performance standards established by the 
Secretary.



Sec. 627.430  Grant payments.

    (a) Except as provided in paragraph (h)(2) of this section, JTPA 
grant payments shall be made to the Governor in accordance with the Cash 
Management Improvement Act of 1990 (31 U.S.C. 6501, et seq.), Department 
of Treasury regulations at 31 CFR part 205, and the State Agreement 
entered into with the Department of the Treasury.
    (b) Basic standard. Except as provided in paragraphs (d) and (e) of 
this section, each recipient and subrecipient shall be paid in advance, 
provided it demonstrates the willingness and ability to limit advanced 
funds to the actual immediate disbursement needs in carrying out the 
JTPA program.
    (c) Advance payments. To the maximum extent feasible, each 
subrecipient shall be provided advance payments via electronic funds 
transfer, following the procedures of the awarding agency.
    (d) Reimbursement. (1) Reimbursement is the preferred method when 
the requirements in paragraph (b) of this section are not met.
    (i) Each recipient shall submit requests for reimbursement in 
accordance with the provisions at 31 CFR part 205.
    (ii) Each subrecipient shall submit requests for reimbursement in 
accordance with requirements established by the awarding agency.
    (2) Each subrecipient shall be paid as promptly as possible after 
receipt of a proper request for reimbursement.
    (e) Working capital advance payments. If a subrecipient cannot meet 
the criteria for advance payments described in paragraph (b) of this 
section, and the awarding agency has determined that reimbursement is 
not feasible because the subrecipient lacks sufficient working capital, 
the awarding agency may provide cash on a working capital advance 
payment basis. Under this procedure, the awarding agency shall advance 
cash to the subrecipient to cover its estimated disbursement needs for 
an initial period, generally geared to the subrecipient's disbursing 
cycle. In no event may such an advance exceed 20 percent of the award 
amount. Thereafter, the awarding agency shall reimburse the subrecipient 
for its actual cash disbursements. The working capital advance method of 
payment shall not be used by recipients or subrecipients if the reason 
for using such method is the unwillingness or inability of the recipient 
or subrecipient to provide timely advances to the subrecipient to meet 
the subrecipient's actual cash disbursements.
    (f) Effect of program income, refunds, and audit recoveries on 
payment. Each recipient and subrecipient shall disburse cash received as 
a result of program income, rebates, refunds, contract settlements, 
audit recoveries, and interest earned on such funds before requesting 
additional cash payments.
    (g) Cash depositories. (1) Consistent with the national goal of 
expanding the opportunities for minority business enterprises, each 
recipient and subrecipient is encouraged to use minority-owned banks (a 
bank which is at least 50 percent owned by minority group members). 
Additional information may be obtained from the Minority Business 
Development Agency, Department of Commerce, Washington, DC 20230.
    (2) A recipient or subrecipient shall not be required to maintain a 
separate bank account but shall separately account for Federal funds on 
deposit.
    (h) Interest earned on advances. (1) An interest liability shall 
accrue on advance payments between Federal agencies and State 
governments, as provided by the Cash Management Improvement Act (31 
U.S.C. 6501, et seq.) and implementing regulations at 31 CFR part 205.
    (2) Each recipient and subrecipient shall account for interest 
earned on advances of Federal funds as program income, as provided at 
Sec. 627.450 of this part, Program income.



Sec. 627.435  Cost principles and allowable costs.

    (a) General. To be allowable, a cost shall be necessary and 
reasonable for the proper and efficient administration of the program, 
be allocable to the program, and, except as provided herein, not be a 
general expense required to

[[Page 209]]

carry out the overall responsibilities of the Governor or a governmental 
subrecipient. Costs charged to the program shall be accorded consistent 
treatment through application of generally accepted accounting 
principles appropriate to the JTPA program, as determined by the 
Governor.
    (b) Whether a cost is charged as a direct cost or as an indirect 
cost shall be determined in accordance with the descriptions of direct 
and indirect costs contained in the OMB Circulars identified in DOL's 
regulations at 29 CFR 97.22(b).
    (c) Costs allocable to another Federal grant, JTPA program, or cost 
category may not be shifted to a JTPA grant, subgrant, program, or cost 
category to overcome fund deficiencies, avoid restrictions imposed by 
law or grant agreements, or for other reasons.
    (d) Applicable credits such as rebates, discounts, refunds, and 
overpayment adjustments, as well as interest earned on any of them, 
shall be credited as a reduction of costs if received during the same 
funding period that the cost was initially charged. Credits received 
after the funding period shall be returned to the Department as provided 
for at Sec. 627.490(b).
    (e) The following costs are not allowable charges to the JTPA 
program:
    (1) Costs of fines and penalties resulting from violations of, or 
failure to comply with, Federal, State, or local laws and regulations;
    (2) Back pay, unless it represents additional pay for JTPA services 
performed for which the individual was underpaid;
    (3) Entertainment costs;
    (4) Bad debts expense;
    (5) Insurance policies offering protection against debts established 
by the Federal Government;
    (6) Contributions to a contingency reserve or any similar provision 
for unforeseen events;
    (7) Costs prohibited by 29 CFR part 93 (Lobbying Restrictions) or 
costs of any salaries or expenses related to any activity designed to 
influence legislation or appropriations pending before the Congress of 
the United States; and
    (8) Costs of activities prohibited in Sec. 627.205, Public service 
employment prohibition; Sec. 627.210, Nondiscrimination and 
nonsectarian activities; Sec. 627.215, Relocation; Sec. 627.225, 
Employment generating activities; and Sec. 627.230, Displacement, of 
this part.
    (f)(1) The cost of legal expenses required in the administration of 
grant programs is allowable. Legal expenses include the expenses 
incurred by the JTPA system in the establishment and maintenance of a 
grievance system, including the costs of hearings and appeals, and 
related expenses such as lawyers' fees. Legal expenses does not include 
costs resulting from, and after, the grievance process such as fines and 
penalties, which are not allowable, and settlement costs, which are 
allowable to the extent that such costs included in the settlement would 
have been allowable if charged to the JTPA program at the time they were 
incurred.
    (2) Legal services furnished by the chief legal officer of a State 
or local government or staff solely for the purpose of discharging 
general responsibilities as a legal officer are unallowable.
    (3) Legal expenses for the prosecution of claims against the Federal 
Government, including appeals to an Administrative Law Judge, are 
unallowable.
    (g) Costs of travel and incidental expenses incurred by volunteers 
are allowable provided such costs are incurred for activities that are 
generally consistent with section 204(c)(6) of the Act.
    (h) Contributions to a reserve for a self-insurance program, to the 
extent that the type and extent of coverage and the rates and premiums 
would have been allowed had insurance been purchased to cover the risks, 
are allowable.
    (i) The Governor shall prescribe and implement guidelines on 
allowable costs for SDA, SSG, and statewide programs that are consistent 
with the cost principles and allowable costs provisions of paragraphs 
(a) through (h) of this section and that include, at a minimum, 
provisions that specify the extent to which the following cost items are 
allowable or unallowable JTPA costs and, if allowable, guidelines on 
conditions or the extent of allowability, documentation requirements, 
and any prior approval requirements applicable to such cost items:

[[Page 210]]

    (1) Compensation for personal services of staff, including wages, 
salaries, supplementary compensation, and fringe benefits;
    (2) Costs incurred by the SJTCC, HRIC, PIC's, and other advisory 
councils or committees;
    (3) Advertising costs;
    (4) Depreciation and/or use allowances;
    (5) Printing and reproduction costs;
    (6) Interest expense;
    (7) Expenditures for transportation and travel;
    (8) Payments to OJT employers, training institutions, and other 
vendors;
    (9) Fees or profits;
    (10) Insurance costs, including insurance coverage for injuries 
suffered by participants who are not covered by existing workers' 
compensation, and personal liability insurance for PIC members;
    (11) Acquisitions of capital assets;
    (12) Building space costs, including rent, repairs, and alterations;
    (13) Pre-agreement costs;
    (14) Fund-raising activities;
    (15) Professional services, including organizational management 
studies conducted by outside individuals or firms; and
    (16) Taxes.



Sec. 627.440  Classification of costs.

    (a) Allowable costs for programs under title II and title III shall 
be charged (allocated) to a particular cost objective/category to the 
extent that benefits are received by such cost objective/category. Joint 
and similar types of costs may be charged initially to a cost pool used 
for the accumulation of such costs pending distribution in due course to 
the ultimate benefitting cost objective/category. The classification of 
costs for programs under title III of the Act are set forth at Sec. 
631.13 of this chapter, Classification of costs at State and substate 
levels.
    (b) For State-administered programs under Title II, the State is 
required to plan, control, and charge expenditures against the following 
cost objectives/categories:
    (1) Titles II-A and II-C (combined)--capacity building and technical 
assistance (sections 202(c)(1)(B) and 262(c)(1)(B) of the Act to carry 
out activities pursuant to sections 202(c)(3)(A) and 262(c)(3)(A) of the 
Act);
    (2) Titles II-A and II-C (combined)--8 percent coordination 
(sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to carry out 
activities pursuant to section 123(d)(2)(A) of the Act);
    (3) Titles II-A and II-C (combined)--8 percent services/direct 
training (sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to carry out 
activities pursuant to section 123(d)(2)(B) of the Act);
    (4) Titles II-A and II-C (combined)--8 percent services/training-
related and supportive services (sections 202(c)(1)(C) and 262(c)(1)(C) 
of the Act to carry out activities pursuant to section 123(d)(2)(B) of 
the Act);
    (5) Titles II-A and II-C (combined)--8 percent services/
administration (sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to 
carry out activities pursuant to section 123(d)(2)(B) of the Act);
    (6) Titles II-A and II-C (combined)--8 percent services to 
disadvantaged (section 202(c)(1)(C) and 262(c)(1)(C) of the Act to carry 
out activities pursuant to section 123(d)(2)(C) of the Act);
    (7) Title II-A--older individuals/direct training (section 
202(c)(1)(D) of the Act to carry out activities pursuant to section 
204(d) of the Act);
    (8) Title II-A--older individuals/training-related and supportive 
services (section 202(c)(1)(D) of the Act to carry out activities 
pursuant to section 204(d) of the Act);
    (9) Title II-A--older individuals/administration (section 
202(c)(1)(D) of the Act to carry out activities pursuant to section 
204(d) of the Act); and
    (10) Title II--administration (sections 202(c)(1)(A) and 
262(c)(1)(A) of the Act to carry out activities pursuant to Title II of 
the Act, including Title II-B).
    (c)(1) SDA grant recipients and their subrecipients shall plan, 
control, and charge expenditures, excluding incentive funds received 
pursuant to sections 202(c)(1)(B) and 262(c)(1)(B) of the Act, against 
the following cost objectives/categories:
    (i) Title II-A--direct training services;
    (ii) Title II-C--direct training services;

[[Page 211]]

    (iii) Title II-A--training-related and supportive services;
    (iv) Title II-C--training-related and supportive services;
    (v) Title II-B--training and supportive services;
    (vi) Title II-A--administration;
    (vii) Title II-B--administration; and
    (viii) Title II-C--administration.
    (2) Incentive funds received pursuant to sections 202(c)(1)(B) and 
262(c)(1)(B) of the Act, may be combined and accounted for in total, 
without regard to cost categories or cost limitations.
    (d) States and subrecipients shall use the following definitions in 
assigning costs to the cost categories contained in paragraphs (b) and 
(c) of this section:
    (1) Direct training services--title II-A. Costs for direct training 
services that may be charged to the title II-A program are:
    (i) The personnel and non-personnel costs directly related to 
providing those services to participants specified in section 204(b)(1) 
of the Act and which can be specifically identified with one or more of 
those services. Generally, such costs are limited to:
    (A) Salaries, fringe benefits, equipment, supplies, space, staff 
training, transportation, and other related costs of personnel directly 
engaged in providing training; and
    (B) Salaries, fringe benefits, and related non-personnel costs of 
program component supervisors and/or coordinators as well as clerical 
staff, provided such staff work exclusively on activities or functions 
specified in section 204(b)(1) of the Act or allocations of such costs 
are made based on actual time worked or other equitable cost allocation 
methods;
    (ii) Books, instructional materials, and other teaching aids used by 
or for participants;
    (iii) Equipment and materials used in providing training to 
participants;
    (iv) Classroom space and utility costs;
    (v) Costs of insurance coverage of participants as specified at 
Sec. 627.315(b) of this part, Benefits and Working Conditions;
    (vi) Payments to vendors for goods or services procured for the use 
or benefit of program participants for direct training services, 
including:
    (A) Payments for commercially available training packages purchased 
competitively pursuant to section 141(d)(3) of the Act;
    (B) Tuition charges, entrance fees, and other usual and customary 
fees of an educational institution when such tuition charges, entrance 
fees, or other fees are not more than the educational institution's 
catalogue price, necessary to receive specific training, charged to the 
general public to receive the same training, and are for training of 
participants; and
    (C) Payments to OJT employers, but not brokering contractors. Costs 
incurred under brokering arrangements shall be allocated to all of the 
benefitting cost categories, and
    (vii) Payments to JTPA participants that represent hours spent in a 
direct training activity (e.g., wages, work-based training payments, 
training payments for combined activities), including work experience, 
vocational exploration, limited internships, and entry employment.
    (2) Direct training services--title II-C. Costs for direct training 
services that may be charged to the title II-C program are the costs 
identified in paragraph (d)(1) of this section as well as costs directly 
related to providing those services to participants specified in section 
264(c)(1) of the Act and which can be specifically identified with one 
or more of those services.
    (3) Training-related and supportive services--title II-A. Costs for 
training-related and supportive services that may be charged to the 
title II-A program are:
    (i) The personnel and non-personnel costs directly related to 
providing outreach, intake, and eligibility determination, as well as 
those services to participants specified in section 204(b)(2) of the 
Act, and which can be specifically identified with one or more of those 
services. Generally, such costs are limited to:
    (A) Salaries, fringe benefits, equipment, supplies, space, staff 
training, transportation, and other related costs of personnel directly 
engaged in providing training-related and/or supportive services; and

[[Page 212]]

    (B) Salaries, fringe benefits, and related non-personnel costs of 
program component supervisors and/or coordinators as well as clerical 
staff, provided such staff work exclusively on activities or functions 
specified in section 204(b)(2) of the Act or allocations of such costs 
are made based on actual time worked or another equitable allocation 
method.
    (ii) Needs-based payments, cash incentives and bonuses, other 
financial assistance and supportive services to participants and 
applicants, where applicable.
    (4) Training-related and supportive services--title II-C. Costs for 
training-related and supportive services that may be charged to the 
title II-C program are the costs identified in paragraph (d)(3) of this 
section, as well as costs directly related to providing those services 
to participants specified in section 264(c)(2) of the Act and which can 
be specifically identified with one or more of those services.
    (5) Administration. The costs of administration are those portions 
of necessary and allowable costs associated with the overall management 
and administration of the JTPA program and which are not directly 
related to the provision of services to participants or otherwise 
allocable to the program cost objectives/categories in paragraphs 
(b)(1)-(8) or (c)(1) (i)-(v) of this section. These costs can be both 
personnel and non-personnel and both direct and indirect. Costs of 
administration shall include:
    (i) Except as provided in paragraph (e)(1) of this section, costs of 
salaries, wages, and related costs of the recipient's or subrecipient's 
staff or PIC staff engaged in:
    (A) Overall program management, program coordination, and general 
administrative functions, including the salaries and related costs of 
the executive director, JTPA director, project director, personnel 
officer, fiscal officer/bookkeeper, purchasing officer, secretary, 
payroll/insurance/property clerk and other costs associated with 
carrying out administrative functions;
    (B) Preparing program plans, budgets, schedules, and amendments 
thereto;
    (C) Monitoring of programs, projects, subrecipients, and related 
systems and processes;
    (D) Procurement activities, including the award of specific 
subgrants, contracts, and purchase orders;
    (E) Providing State or local officials and the general public with 
information about the program (public relations);
    (F) Developing systems and procedures, including management 
information systems, for assuring compliance with program requirements;
    (G) Preparing reports and other documents related to the program 
requirements;
    (H) Coordinating the resolution of audit findings;
    (I) Evaluating program results against stated objectives; and
    (J) Performing such administrative services as general legal 
services, accounting services, audit services; and managing purchasing, 
property, payroll, and personnel;
    (ii) Costs for goods and services required for administration of the 
program, including such goods and services as rental or purchase of 
equipment, utilities, office supplies, postage, and rental and 
maintenance of office space;
    (iii) The costs of organization-wide management functions; and
    (iv) Travel costs incurred for official business in carrying out 
program management or administrative activities, including travel costs 
incurred by PIC members.
    (e) Other cost classification guidance. (1) Personnel and related 
non-personnel costs of the recipient's or subrecipient's staff, 
including project directors, who perform services or activities that 
benefit two or more of the cost objectives/categories identified in this 
section may be allocated to the benefitting cost objectives/categories 
based on documented distributions of actual time worked or other 
equitable cost allocation methods.
    (2) Indirect or overhead costs normally shall be charged to 
administration, except that specific costs charged to an overhead or 
indirect cost pool that can be identified directly with a JTPA cost 
objective/category other than administration may be charged to

[[Page 213]]

the JTPA cost objective/category directly benefitted. Documentation of 
such charges shall be maintained.
    (3) Where an award to a subrecipient is for a ``commercially 
available off-the-shelf training package,'' as defined at Sec. 626.5 of 
this chapter, the subrecipient may charge all costs of such package to 
the direct training services cost category.
    (4) Profits, fees, and other revenues earned by a subrecipient that 
are in excess of actual costs incurred, to the extent allowable and 
consistent with the guidelines on allowable costs prescribed by the 
Governor in accordance with Sec. 627.435(i). Cost principles and 
allowable costs, may be allocated to all three cost categories based on 
the proportionate share of actual costs incurred attributable to each 
category.



Sec. 627.445  Limitations on certain costs.

    (a) State-administered programs--(1) Services for older individuals. 
Of the funds allocated for any program year for section 202(c)(1)(D) of 
the Act to carry out activities pursuant to section 204(d) of the Act--
    (i) Not less than 50 percent shall be expended for the cost of 
direct training services; and
    (ii) Not more than 20 percent shall be expended for the cost of 
administration.
    (2) State education services. Of the funds allocated for any program 
year for sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to carry out 
activities pursuant to section 123(d)(2)(B) of the Act--
    (i) Not less than 50 percent shall be expended for the cost of 
direct training services; and
    (ii) Not more than 20 percent shall be expended for the cost of 
administration.
    (3) The limitations specified in paragraph (a)(2) of this section 
shall apply to the combined total of funds allocated for sections 
202(c)(1)(C) and 262(c)(1)(C) of the Act.
    (b) SDA allocations. (1) In applying the title II-A and II-C cost 
limitations specified in section 108(b)(4) of the Act, the funds 
allocated to a service delivery area shall be net of any:
    (i) Transfers made in accordance with sections 206, 256, and 266 of 
the Act; and
    (ii) Reallocations made by the Governor in accordance with section 
109(a) of the Act.
    (2) The limitations specified in paragraph (b)(1) of this section 
shall apply separately to the funds allocated for title II-A and title 
II-C programs.
    (3) The title II-B administrative cost limitation of 15 percent 
shall be 15 percent of the funds allocated for any program year to a 
service delivery area, excluding any funds transferred to title II-C in 
accordance with section 256 of the Act (section 253(a)(3)).
    (c)(1) The State shall establish a system to regularly assess 
compliance with the cost limitations including periodic review and 
corrective action, as necessary.
    (2) States and service delivery areas shall have the 3-year period 
of fund availability to comply with the cost limitations in section 108 
of the Act and paragraphs (a) and (b) of this section (section 161(b)).
    (d) Administrative costs incurred by a community-based organization 
or non-profit service provider shall not be included in the limitation 
described in section 108(b)(4)(A) of the Act if:
    (1) Such costs are incurred under an agreement that meets the 
requirements of section 141(d)(3)(C) (i) and (ii) of the Act;
    (2) The total administrative expenditures of the service delivery 
area, including the administrative expenditures of such community-based 
organizations or non-profit service providers, do not exceed 25 percent 
of the funds allocated to the service delivery area for the program year 
of allocation; and
    (3) The total direct training expenditures of the service delivery 
area, including the direct training expenditures of such community-based 
organizations or non-profit service providers, is equal to or exceeds 50 
percent of the funds allocated to the service delivery area for the 
program year less one-half of the percentage by which the total 
administrative expenditures of the service delivery area exceeds 20 
percent. For example, if the total administrative expenditures of the 
service delivery area is 24 percent, then the total direct training 
expenditures of the service delivery area must be at least 48 percent.

[[Page 214]]

    (e) The provisions of this section do not apply to any title III 
programs.
    (f) The provisions of this section do not apply to any designated 
SDA which served as a concentrated employment program grantee for a 
rural area under the Comprehensive Employment and Training Act (section 
108(d)).



Sec. 627.450  Program income.

    (a) Definition of program income. (1) Program income means income 
received by the recipient or subrecipient that is directly generated by 
a grant or subgrant supported activity, or earned only as a result of 
the grant or subgrant. Program income includes:
    (i) Income from fees for services performed and from conferences;
    (ii) Income from the use or rental of real or personal property 
acquired with grant or subgrant funds;
    (iii) Income from the sale of commodities or items fabricated under 
a grant or subgrant;
    (iv) Revenues earned by a governmental or non-profit service 
provider under either a fixed-price or reimbursable award that are in 
excess of the actual costs incurred in providing the services; and
    (v) Interest income earned on advances of JTPA funds.
    (2) Program income does not include:
    (i) Rebates, credits, discounts, refunds, etc., or interest earned 
on any of them, which shall be credited in accordance with Sec. 
627.435(d), Cost principles and allowable costs;
    (ii) Taxes, special assessments, levies, fines, and other such 
governmental revenues raised by a recipient or subrecipient; or
    (iii) Income from royalties and license fees for copyrighted 
material, patents, patent applications, trademarks, and inventions 
developed by a recipient or subrecipient.
    (3) Property. Proceeds from the sale of property shall be handled in 
accordance with the requirements of Sec. 627.465 of this part, Property 
management standards.
    (b) Cost of generating program income. Costs incidental to the 
generation of program income may be deducted, if not already charged to 
the grant, from gross income to determine program income.
    (c) Use of program income. (1)(i) A recipient or subrecipient may 
retain any program income earned by the recipient or subrecipient only 
if such income is added to the funds committed to the particular JTPA 
grant or subgrant and title under which it was earned and such income is 
used for that title's purposes and under the terms and conditions 
applicable to the use of the grant funds.
    (ii) A State may use interest it earns on JTPA funds, deposited by 
the United States to the State's account, to satisfy the requirement at 
31 U.S.C. 6503(c) that the State pay interest on such deposits.
    (iii) The classification of costs in Sec. Sec. 627.440 and 631.13 
shall apply to the use of program income.
    (iv) The administrative cost limitation in Sec. Sec. 627.445 and 
631.14 shall apply to the use of program income, except that program 
income used in accordance with paragraph (c)(1)(ii) of this section 
shall be exempt from the administrative cost limitations.
    (2) Program income generated under title II may also be used to 
satisfy the matching requirement of section 123(b) of the Act.
    (3) Program income shall be used prior to the submission of the 
final report for the funding period of the program year of funds to 
which the earnings are attributable.
    (4) If the subrecipient that earned program income cannot use such 
income for JTPA purposes, the recipient may permit another entity to use 
the program income for JTPA purposes.
    (5) Program income not used in accordance with the requirements of 
this section shall be remitted to the Department of Labor.
    (d) Program and other income after the funding period. Rental income 
and user fees on real and personal property acquired with JTPA funds 
shall continue to be JTPA program income in subsequent funding periods. 
There are no Federal requirements governing the disposition of all other 
income that is earned after the end of the funding period.



Sec. 627.455  Reports required.

    (a) General. The Governor shall report to DOL pursuant to 
instructions

[[Page 215]]

issued by DOL. Reports shall be submitted no more frequently than 
quarterly, in accordance with section 165(f) of the Act, and within 45 
calendar days after the end of the report period. Additional reporting 
requirements for title III are set forth at Sec. 631.15 of this 
chapter.
    (b) A recipient may impose different forms or formats, shorter due 
dates, and more frequent reporting requirements on subrecipients, 
however, the recipient is required to meet the reporting requirements 
imposed on it by DOL.
    (c) DOL may provide computer outputs to recipients to expedite or 
contribute to the accuracy of reporting. DOL may accept the required 
information from recipients in electronically reported format or 
computer printouts instead of prescribed forms.
    (d) Financial reports. (1) Financial reports for programs under 
titles I, II, and III shall be submitted to DOL by each State quarterly 
and by program year of appropriation.
    (2) Each recipient shall report program outlays on an accrual basis. 
If the recipient's accounting records are not normally kept on the 
accrual basis, the recipient shall develop such accrual information 
through an analysis of the documentation on hand.
    (3) A final financial report is required 90 days after the 
expiration of a funding period (see Sec. 627.485 of this part, 
Closeout).
    (4) Pursuant to section 104(b)(13) of the Act, the SDA shall 
annually report to the Governor. Among other items, this report shall 
include information on the extent to which the SDA has met the goals for 
the training and training-related placement of women in nontraditional 
employment.



Sec. 627.460  Requirements for records.

    (a) Records, including the records identified in section 165(g) of 
the Act, shall be retained in accordance with section 165(e) of the Act. 
In establishing the time period of record retention requirements for 
records of subrecipients, the State may either:
    (1) Impose the time limitation requirement of section 165(e) of the 
Act; or
    (2) Require that subrecipient records for each funding period be 
retained for 3 years after the subrecipient submits to the awarding 
agency its final expenditure report for that funding period. Records for 
nonexpendable property shall be retained for a period of three years 
after final disposition of the property.
    (b) The Governor shall ensure that the records under this section 
shall be retained beyond the prescribed period if any litigation or 
audit is begun or if a claim is instituted involving the grant or 
agreement covered by the records. In these instances, the Governor shall 
ensure that the records shall be retained until the litigation, audit, 
or claim has been finally resolved.
    (c) In the event of the termination of the relationship with a 
subrecipient, the Governor or SDA or title III SSG shall be responsible 
for the maintenance and retention of the records of any subrecipient 
unable to retain them.
    (d) Record storage. Records shall be retained and stored in a manner 
which will preserve their integrity and admissibility as evidence in any 
audit or other proceeding. The burden of production and authentication 
of the records shall be on the custodian of the records.
    (e) Federal and awarding agencies' access to records--(1) Records of 
recipients and subrecipients. The awarding agency, the Department of 
Labor (including the Department of Labor's Office of Inspector General), 
and the Comptroller General of the United States, or any of their 
authorized representatives, have the right of timely and reasonable 
access to any books, documents, papers, computer records, or other 
records of recipients and subrecipients that are pertinent to the grant, 
in order to conduct audits and examinations, and to make excerpts, 
transcripts, and photocopies of such documents. This right also includes 
timely and reasonable access to recipient and subrecipient personnel for 
the purpose of interview and discussion related to such documents.
    (2) Expiration of right of access. The right of access in this 
section is not

[[Page 216]]

limited to the required retention period but shall last as long as the 
records are retained.



Sec. 627.463  Public access to records.

    (a) Public access. Except as provided in paragraph (b) of this 
section, records maintained by recipients or subrecipients pursuant to 
Sec. 627.460 shall be made available to the public upon request, 
notwithstanding the provisions of State or local law.
    (b) Exceptions. This requirement does not apply to:
    (1) Information, the disclosure of which would constitute a clearly 
unwarranted invasion of personal privacy; or
    (2) Trade secrets, or commercial or financial information, obtained 
from a person and privileged or confidential.
    (c) Fees. For processing of a request for a record under this 
section, a fee may be charged to the extent sufficient to recover the 
cost applicable to processing such request (section 165(a)(4)).



Sec. 627.465  Property management standards.

    (a) States and governmental subrecipients. Real property, equipment, 
supplies, and intangible property acquired or produced after July 1, 
1993, by States and governmental subrecipients with JTPA funds shall be 
governed by the definitions and property requirements in the DOL 
regulations at 29 CFR part 97, except that prior approval by the 
Department of Labor to acquire property is waived.
    (b) Nongovernmental subrecipients. Except as provided in paragraph 
(c) of this section, real and personal property, including intangible 
property, acquired or produced after July 1, 1993, by nongovernmental 
subrecipients with JTPA funds shall be governed by the definitions and 
property management standards of OMB Circular A-110, as codified by 
administrative regulations of the Department of Labor in 29 CFR Part 95, 
except that prior approval by the Department of Labor to acquire 
property is waived.
    (c) Special provisions for property acquired under subgrants to 
commercial organizations--(1) Scope. This paragraph (c) applies to real 
and personal property other than supplies that are acquired or produced 
after July 1, 1993, under a JTPA subgrant to a commercial organization.
    (2) Property acquired by commercial subrecipients. Title to property 
acquired or produced by a subrecipient that is a commercial organization 
shall vest in the awarding agency, provided such agency is a 
governmental entity or nongovernmental organization that is not a 
commercial organization. Property so acquired or produced shall be 
considered to be acquired or produced by the awarding agency and 
paragraph (a) or (b) of this section, as appropriate, shall apply to 
that property. If the awarding agency is also a commercial organization, 
title shall vest in the higher level, non-commercial awarding agency 
that made the subaward to the commercial subrecipient.
    (3) Approval for acquisition. A subrecipient that is a commercial 
organization shall not acquire property subject to this section without 
the prior approval of the awarding agency.
    (d) Notification to the Secretary of real property acquisitions. 
Recipients shall notify the Secretary immediately upon acquisition of 
real property with JTPA funds, including acquisitions by subrecipients. 
Such notification shall include the location of the real property and 
the Federal share percentage.
    (e) Property procured before July 1, 1993. (1) Personal or real 
property procured with JTPA funds or transferred from programs under the 
Comprehensive Employment and Training Act must be used for purposes 
authorized by the Act. Subject to the Secretary's rights to such 
property, the Governor shall maintain accountability for property in 
accordance with State procedures and the records retention requirements 
of Sec. 627.460 of this part.
    (2) The JTPA program must be reimbursed the fair market value of any 
unneeded property retained by the Governor for use in a non-JTPA 
program. The proceeds from the sale of any property or transfer of 
property to a non-JTPA program must be used for purposes authorized 
under the Act.



Sec. 627.470  Performance standards.

    (a) General. The Secretary shall prescribe performance standards for 
adult programs under title II-A, for youth

[[Page 217]]

programs under title II-C, for dislocated worker programs under title 
III, and for older worker programs under section 204(d) of the Act. Any 
performance standards developed for employment competencies shall be 
based on such factors as entry level skills and other hiring 
requirements.
    (b) Pursuant to instructions and time lines issued by the Secretary, 
the Governor shall:
    (1) Collect the data necessary to set performance standards pursuant 
to section 106 of the Act; and
    (2) Maintain records and submit reports required by sections 
106(j)(3), 165(a)(3), (c)(1), and (d) and 121(b)(6) of the Act.
    (c) Title II performance standards. (1) The Governor shall establish 
SDA performance standards for title II within the parameters set by the 
Secretary pursuant to sections 106(b) and (d) of the Act and apply the 
standards in accordance with section 202(c)(1)(B) of the Act.
    (2) The Governor shall establish incentive award policies pursuant 
to section 106(b)(7) of the Act, except for programs operated under 
section 204(d) of the Act. Pursuant to section 106(b)(8) of the Act, 
Governors may not consider standards relating gross program expenditures 
to performance measures in making such incentive awards.
    (3) The Governor shall provide technical assistance to SDA's failing 
to meet performance standards established by the Secretary for a given 
program year (section 106(j)(2)).
    (4)(i) If an SDA fails to meet a prescribed number of the 
Secretary's performance standards for 2 consecutive years, the Governor 
shall notify the Secretary and the service delivery area of the 
continued failure and impose a reorganization plan (section 106(j)(4)).
    (ii) The number of standards deemed to constitute failure shall be 
specified by the Secretary biennially and shall be based on an 
appropriate proportion of the total number established by the Secretary 
for that performance cycle. In determining failure, the specified 
proportion shall be applied separately to each year of the two year 
cycle.
    (iii) A reorganization plan shall not be imposed for a failure to 
meet performance standards other than those established by the 
Secretary.
    (iv) A reorganization plan shall be considered to be imposed when, 
at a minimum:
    (A) The problem or deficiency is identified,
    (B) The problem is communicated to the SDA, and
    (C) The SDA is provided an initial statement of the actions or steps 
required and the timeframe within which they are to be initiated. A 
final statement of required steps and actions is to be issued within 30 
days.
    (d)(1) If the Governor does not impose a reorganization plan, 
required by paragraph (c)(4) of this section, within 90 days of 
notifying the Grant Officer of an SDA's continued failure to meet 
performance standards, the Grant Officer shall develop and impose such a 
plan (section 106(j)(5)).
    (2) Before imposing a reorganization plan, the Grant Officer shall 
notify the Governor and SDA in writing of the intent to impose the plan 
and provide both parties the opportunity to submit comments within 30 
days of receipt of the Grant Officer's notice.
    (e) An SDA subject to a reorganization plan under paragraphs (c)(4) 
or (d) of this section may, within 30 days of receiving notice of such 
action, appeal to the Secretary to revise or rescind the reorganization 
plan under the procedures set forth at Sec. 627.471 of this subpart, 
Reorganization plan appeals (section 106(j)(6)(A)).
    (f) Secretarial action to recapture or withhold funds. (1) The Grant 
Officer shall recapture or withhold an amount not to exceed one-fifth of 
the State administration set-aside allocated under sections 202(c)(1)(A) 
and 262(c)(1)(A) of the Act when:
    (i) The Governor has failed to impose a reorganization plan under 
paragraph (c)(4) of this section, for the purposes of providing 
technical assistance under a reorganization plan imposed by the 
Secretary (section 106(j)(5)(B)); or
    (ii) The Secretary determines in an appeal provided for at paragraph 
(e) of this section, and set forth at Sec. 627.471 of this subpart, 
that the Governor has not provided appropriate technical assistance as 
required at section 106(j)(2) (section 106(j)(6)(B)).

[[Page 218]]

    (2)(i) A Governor of a State that is subject to recapture or 
withholding under paragraph (f)(1) of this section may, within 30 days 
of receipt of such notice, appeal such recapture or withholding to the 
Secretary.
    (ii) The Secretary may consider any comments submitted by the 
Governor and shall make a decision within 45 days after the appeal is 
received.
    (g) Title III performance standards. (1) The Governor shall 
establish SSG performance standards for programs under title III within 
the parameters set annually by the Secretary pursuant to section 106(c) 
and (d) of the Act.
    (2) Any performance standard for programs under title III shall make 
appropriate allowances for the difference in cost resulting from serving 
workers receiving needs-related payments authorized under Sec. 631.20 
of this chapter (section 106(c)(2)).
    (3) The Secretary annually shall certify compliance, if the program 
is in compliance, with the title III performance standards established 
pursuant to paragraph (a) of section 322(a)(4) of the Act.
    (4) The Governor shall not establish standards for the operation of 
programs under title III that are inconsistent with the performance 
standards established by the Secretary under provisions of section 
106(c) of the Act (section 311(b)(8)).
    (5) When an SSG fails to meet performance standards for 2 
consecutive years, the Governor may institute procedures pursuant to the 
Governor's by-pass authority in accordance with Sec. 631.38(b) of this 
chapter or require redesignation of the substate grantee in accordance 
with Sec. 631.35 of this chapter, as appropriate.



Sec. 627.471  Reorganization plan appeals.

    (a) A reorganization plan imposed by the Governor, as provided for 
at Sec. Sec. 627.470(c)(4) or 627.477(b)(2) of this part, or by the 
Secretary, as provided for at Sec. 627.470(d) of this part, may be 
appealed directly to the Secretary without prior exhaustion of local 
remedies.
    (b)(1) Appeals shall be submitted to the Secretary, U.S. Department 
of Labor, Washington, DC 20210, ATTENTION: ASET. A copy of the appeal 
shall be provided simultaneously to the Governor.
    (2) The Secretary shall not accept an appeal dated later than 30 
days after receipt of written notification from the Governor or the 
Secretary.
    (3) The appealing party shall explain why it believes the decision 
to impose the reorganization plan is contrary to the provisions of 
section 106 of the Act.
    (4) The Secretary shall accept the appeal and make a decision only 
with regard to determining whether or not the decision to impose the 
reorganization plan is inconsistent with section 106 of the Act. The 
Secretary may consider any comments submitted by the Governor or the 
SDA, as appropriate. The Secretary shall make a final decision within 60 
days after this appeal is received (section 106(j)).



Sec. 627.475  Oversight and monitoring.

    (a) The Secretary may monitor all recipients and subrecipients of 
financial assistance pursuant to section 163 of the Act.
    (b) The Governor is responsible for oversight of all SDA and SSG 
activities and State-supported programs. The Governor shall develop and 
make available for review a State monitoring plan. The plan shall 
specify the mechanism which:
    (1) Ensures that established policies to achieve program quality and 
outcomes meet the objectives of the Act and regulations promulgated 
thereunder;
    (2) Enables the Governor to determine if SDA's and SSG's have 
demonstrated substantial compliance with the requirements for oversight;
    (3) Determines whether the Job Training Plan shall be disapproved 
consistent with the criteria contained in section 105(b)(1) of the Act;
    (4) Regularly examines expenditures against the cost categories and 
cost limitations specified in the Act and these regulations;
    (5) Ensures that all areas of SDA and SSG operations are monitored 
onsite regularly, but not less than once annually; and
    (6) Provides for corrective action to be imposed if conditions in 
paragraphs (b)(1)-(4) of this section are not met.

[[Page 219]]

    (c) The Governor shall issue instructions to SDA's and title III 
SSG's on the development of a substate monitoring plan. The instructions 
for development of the monitoring plan, at a minimum, shall address the 
monitoring scope and frequency, and the Secretary's emphasis and 
direction. The substate monitoring plan shall be part of the job 
training plan.
    (d) The Governor shall establish general standards for PIC oversight 
responsibilities. The required PIC standards shall be included in the 
Governor's Coordination and Special Services Plan (GCSSP).
    (e)(1) The PIC, pursuant to standards established by the Governor, 
shall establish specific policies for monitoring and oversight of SDA 
performance which shall be described in the job training plan.
    (2) The PIC shall exercise independent oversight over activities 
under the job training plan which shall not be circumscribed by 
agreements with the appropriate chief elected official(s) of the SDA.
    (f) The PIC and chief elected official(s) may conduct such oversight 
as they, individually or jointly, deem necessary or delegate oversight 
responsibilities to an appropriate entity pursuant to their mutual 
agreement.



Sec. 627.477  Governor's determination of substantial violation.

    (a) Except as provided at paragraph (d) of this section, if, as a 
result of financial and compliance audits or otherwise, the Governor 
determines that there is a substantial violation of a specific provision 
of this Act or the regulations under this Act, and corrective action has 
not been taken, the Governor shall
    (1) Issue a notice of intent to revoke approval of all or part of 
the plan affected; or
    (2) Impose a reorganization plan, which may include
    (i) Restructuring the private industry council involved;
    (ii) Prohibiting the use of designated service providers;
    (iii) Selecting an alternative entity to administer the program for 
the service delivery area involved;
    (iv) Merging the service delivery area into 1 or more other existing 
service delivery areas; or
    (v) Other such changes as the Secretary or Governor determines 
necessary to secure compliance (section 164(b)(1)).
    (b)(1) The actions taken by the Governor pursuant to paragraph 
(a)(1) of this section may be appealed to the Secretary as provided at 
Sec. 628.426 of this chapter (section 164(b)(2)(A)).
    (2) The actions taken by the Governor pursuant to paragraph (a)(2) 
of this section may be appealed to the Secretary, as provided at Sec. 
627.471 of this part (section 164(b)(2)(B)).
    (c) Allegations that the Governor failed to promptly take the 
actions required under paragraph (a) of this section shall be handled 
under Sec. 627.607 of this part (section 164(b)(3)).
    (d) This section does not apply to remedial actions for SDA failures 
to meet performance standards, which are provided for at Sec. 627.470 
of this part, and do not apply to remedial actions for the failure to 
comply with procurement standards, which are provided for at Sec. 
627.703 of this part.



Sec. 627.480  Audits.

    (a) Non-Federal Audits--(1) Governments. Each recipient and 
governmental subrecipient is responsible for complying with the Single 
Audit Act of 1984 (31 U.S.C. 7501-7) and 29 CFR part 96, the Department 
of Labor regulations which implement Office of Management and Budget 
(OMB) Circular A-128, ``Audits of State and Local Governments''.
    (2) Non-governmental organizations. Each non-governmental recipient 
or subrecipient shall comply with OMB Circular A-133, ``Audits of 
Institutions of Higher Education and Other Nonprofit Institutions'', as 
implemented by the Department of Labor regulations at 29 CFR part 96. 
The provisions of this paragraph (a)(2) do not apply to any non-
governmental organization that is:
    (i) A commercial organization; or
    (ii) A hospital or an institution of higher education for which 
State or local governments choose to apply OMB Circular A-128.

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    (3) Commercial organizations. A commercial organization which is a 
recipient or subrecipient and which receives $25,000 or more a year in 
Federal financial assistance to operate a JTPA program shall have an 
audit that:
    (i) Is usually performed annually, but not less frequently than 
every two years;
    (ii) Is completed within one year after the end of the period 
covered by the audit and submitted to the awarding agency within one 
month after completion;
    (iii) Is either:
    (A) An independent financial and compliance audit of Federal funds 
that includes coverage of the JTPA program within its scope, and is 
conducted and prepared in accordance with generally accepted government 
auditing standards; or
    (B) An organization-wide audit that includes financial and 
compliance coverage of the JTPA program within its scope.
    (b) Federal audits. The notice of audits conducted or arranged by 
the Office of Inspector General or the Comptroller General shall be 
provided in advance, as required by section 165(b) of the Act.
    (c) Audit reports. (1) Audit reports of recipient-level entities and 
other organizations which receive JTPA funds directly from the U.S. 
Department of Labor shall be submitted to the Office of Inspector 
General.
    (2) Audit reports of organizations other than those described in 
paragraph (c)(1) of this section shall be submitted to the entity which 
provided the JTPA funds.
    (d) Each entity that receives JTPA program funds and awards a 
portion of those funds to one or more subrecipients shall:
    (1) Ensure that each subrecipient complies with the applicable audit 
requirements;
    (2) Resolve all audit findings that impact the JTPA program with its 
subrecipient and ensure that corrective action for all such findings is 
instituted within 6 months after receipt of the audit report (where 
appropriate, corrective action shall include debt collection action for 
all disallowed costs); and
    (3) Maintain an audit resolution file documenting the disposition of 
reported questioned costs and corrective actions taken for all findings. 
The ETA Grant Officer may request that an audit resolution report, as 
specified in paragraph (e)(2) of this section, be submitted for such 
audits or may have the audit resolution reviewed through the compliance 
review process.
    (e)(1) Audits of recipient-level entities and other organizations 
which receive JTPA funds directly from DOL and all audits conducted by 
or under contract for the Office of Inspector General shall be issued by 
the OIG to the Employment and Training Administration after acceptance 
by OIG.
    (2) After receipt of the audit report, the ETA Grant Officer shall 
request that the State submit an audit resolution report documenting the 
disposition of the reported questioned costs, i.e., whether allowed or 
disallowed, the basis for allowing questioned costs, the method of 
repayment planned or required, and corrective actions, including debt 
collection efforts, taken or planned.
    (f) If the recipient intends to propose the use of ``stand-in'' 
costs as substitutes for otherwise unallowable costs, the proposal shall 
be included with the audit resolution report. To be considered, the 
proposed ``stand-in'' costs shall have been reported as uncharged JTPA 
program costs, included within the scope of the audit, and accounted for 
in the auditee's financial system, as required by Sec. 627.425 of this 
part, Standards for financial management and participant data systems. 
To be accepted, stand-in costs shall be from the same title, and program 
year as the costs which they are proposed to replace, and shall not 
result in a violation of the applicable cost limitations.
    (g) After receiving the audit resolution report, the ETA Grant 
Officer shall review the report, the recipient's disposition, and any 
liability waiver request submitted in accordance with Sec. 627.704 of 
this part. If the Grant Officer agrees with all aspects of the 
recipient's disposition of the audit, the Grant Officer shall so notify 
the recipient. If the Grant Officer disagrees with the recipient's 
conclusion on specific points in the audit, the Grant Officer

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shall resolve the audit through the initial and final determination 
process described in Sec. 627.606 of this part.



Sec. 627.481  Audit resolution.

    (a) Federal audit resolution. When the OIG issues an audit report to 
the Employment and Training Administration for resolution, the ETA Grant 
Officer shall provide a copy of the report to the recipient (if it does 
not already have the report), along with a request that the recipient 
submit its audit resolution report as specified in Sec. 627.480(e)(2) 
of this part, unless the Grant Officer chooses to proceed directly 
against the recipient pursuant to Sec. 627.601 of this part.
    (1) For audits of recipient-level entities and other organizations 
which receive JTPA funds directly from DOL, the Grant Officer shall 
request that the audit resolution report be submitted within 60 days 
from the date that the audit report is issued by the OIG.
    (2) For audits of subrecipient organizations, the Grant Officer 
shall provide the recipient with a 180-day period within which to 
resolve the audit with its subrecipient(s), and shall request that the 
audit resolution report be submitted at the end of that 180-day period.
    (b) After receiving the audit resolution report, the ETA Grant 
Officer shall review the report, the recipient's disposition, any 
liability waiver request, and any proposed ``stand-in'' costs. If the 
Grant Officer agrees with all aspects of the recipient's disposition of 
the audit, the Grant Officer shall so notify the recipient, constituting 
final agency action on the audit. If the Grant Officer disagrees with 
the recipient's conclusion on specific points in the audit, or if the 
recipient fails to submit its audit resolution report, the Grant Officer 
shall resolve the audit through the initial and final determination 
process described in Sec. 627.606 of this part. Normally, the Grant 
Officer's notification of agreement (a concurrence letter) or 
disagreement (an initial determination) with the recipient's audit 
resolution report will be provided within 180 days of the Grant 
Officer's receipt of the report.
    (c) Non-Federal audit resolution. (1) To ensure timely and 
appropriate resolution for audits of all subrecipients, including SDA 
grant recipients and title III SSG's, and to ensure recipient-wide 
consistency, the Governor shall prescribe standards for audit resolution 
and debt collection policies and procedures that shall be included in 
each job training plan in accordance with section 104(b)(12) of the Act.
    (2) The Governor shall prescribe an appeals procedure for audit 
resolution disputes which, at a minimum, provides for:
    (i) The period of time, not less than 15 days nor more than 30 days, 
after the issuance of the final determination in which an appeal may be 
filed;
    (ii) The rules of procedure;
    (iii) Timely submission of evidence;
    (iv) The timing of decisions; and
    (v) Further appeal rights, if any.



Sec. 627.485  Closeout.

    (a) General. The Grant Officer shall close out each annual JTPA 
grant agreement within a timely period after the funding period covered 
by the award has expired.
    (b) Revisions to the reported expenditures for a program year of 
funds may be made until 90 days after the time limitation for 
expenditure of JTPA funds, as set forth in section 161(b) of the Act, 
has expired. The Grant Officer may extend this deadline if the recipient 
submits a written request with justification. After that time, the Grant 
Officer shall consider all reports received as final and no additional 
revisions may be made.
    (c) When closing out a JTPA grant, the Grant Officer shall notify 
the recipient, by certified mail, that, since the time limitation for 
expenditure of funds covered by the grant award has expired, it is the 
Department of Labor's intent to close the annual grant as follows:
    (1) Cost adjustment. Based on receipt of reports in paragraph (b) of 
this section, the Grant Officer shall make upward or downward 
adjustments to the allowable costs; and
    (2) Cash adjustment. DOL shall make prompt payment to the recipient 
for allowable reimbursable costs; the recipient shall promptly refund to 
DOL any

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balance of cash advanced that is in excess of allowable costs for the 
grant award being closed.
    (d) The recipient shall have an additional 60 days after the date of 
the notice described in paragraph (c) of this section in which to 
provide the Grant Officer with information as to the reason(s) why 
closeout should not occur.
    (e) At the end of the 60-day period described in paragraph (d) of 
this section, the Grant Officer shall notify the recipient that closeout 
has occurred, unless information provided by the recipient, pursuant to 
paragraph (d) of this section, indicates otherwise.



Sec. 627.490  Later disallowances and adjustments after closeout.

    The closeout of a grant does not affect:
    (a) The Grant Officer's right to disallow costs and recover funds on 
the basis of a later audit or other review;
    (b) The recipient's obligation to return any funds due as a result 
of later refunds, corrections, subrecipient audit disallowances, or 
other transactions;
    (c) Records retention requirements in Sec. 627.460 of this part, 
Requirements for records, and Sec. 627.463 of this part, Public access 
to records;
    (d) Property management requirements in Sec. 627.465 of this part, 
Property management standards; and
    (e) Audit and audit resolution requirements in Sec. 627.480 of this 
part, Audits and Sec. 627.481 of this part, Audit resolution.



Sec. 627.495  Collection of amounts due.

    (a) Any funds paid to a recipient in excess of the amount to which 
the recipient is finally determined to be entitled under the terms of 
the grant constitute a debt to the Federal Government. If not paid 
within a reasonable period after demand, the Secretary may take any 
actions permitted by law to recover the funds.
    (b) The Secretary shall charge interest on an overdue debt in 
accordance with the Federal Claims Collection Standards (4 CFR ch. II).



      Subpart E_Grievances Procedures at the State and Local Level



Sec. 627.500  Scope and purpose.

    (a) General. This subpart establishes the procedures which apply to 
the handling of noncriminal complaints under the Act at the Governor, 
the SDA, and the SSG levels. Nothing contained in this subpart shall be 
deemed to prejudice the separate exercise of other legal rights in 
pursuit of remedies and sanctions available outside the Act.
    (b) Handling of discrimination complaints. Complaints of 
discrimination pursuant to section 167(a) of the Act shall be handled 
under 29 CFR part 34.
    (c) Complaints and reports of criminal fraud, waste, and abuse. 
Information and complaints involving criminal fraud, waste, abuse or 
other criminal activity shall be reported through the Department's 
Incident Reporting System, directly and immediately to the DOL Office of 
Inspector General, Office of Investigations, 200 Constitution Avenue 
NW., Room S5514, Washington, DC 20210, or to the corresponding Regional 
Inspector General for Investigations, with a copy simultaneously 
provided to the Employment and Training Administration. The Hotline 
number is 1-800-347-3756. Other complaints of a noncriminal nature will 
continue to be handled under the procedures set forth in this part, 
subparts E and F, and through the Department's Incident Reporting 
System.
    (d) Non-JTPA remedies. Whenever any person, organization, or agency 
believes that a recipient, an SDA, an SSG, or other subrecipient has 
engaged in conduct that violates the Act and that such conduct also 
violates a Federal statute other than JTPA, or a State or local law, 
that person, organization, or agency may, with respect to the non-JTPA 
cause of action, institute a civil action or pursue other remedies 
authorized under such other Federal, State, or local law against the 
recipient, the SDA, the SSG, or other subrecipient, without first 
exhausting the remedies in this subpart. Nothing in the Act or this 
chapter shall:
    (1) Allow any person or organization to file a suit which alleges a 
violation of JTPA or regulations promulgated

[[Page 223]]

thereunder without first exhausting the administrative remedies 
described in this subpart; or
    (2) Be construed to create a private right of action with respect to 
alleged violations of JTPA or the regulations promulgated thereunder.



Sec. 627.501  State grievance and hearing procedures for noncriminal 
complaints at the recipient level.

    (a)(1) Each recipient shall maintain a recipient-level grievance 
procedure and shall ensure the establishment of procedures at the SDA 
level and the SSG level for resolving any complaint alleging a violation 
of the Act, regulations promulgated thereunder, grants, or other 
agreements under the Act. The procedures shall include procedures for 
handling complaints and grievances arising in connection with JTPA 
programs operated by each SDA, SSG, and subrecipient under the Act 
(section 144(a)).
    (2) The procedures described in paragraph (a)(1) of this section 
shall also provide for resolution of complaints arising from actions 
taken by the recipient with respect to investigations or monitoring 
reports.
    (b) The recipient's grievance hearing procedure shall require 
written notice to interested parties of the date, time, and place of the 
hearing; an opportunity to present evidence; and a written decision. For 
matters under paragraph (a)(2) of this section, the notice of hearing 
shall indicate the nature of the violation(s) which the hearing covers.



Sec. 627.502  Grievance and hearing procedures for noncriminal 
complaints at the SDA and SSG levels.

    (a) Each SDA and SSG, pursuant to guidelines established by the 
recipient, shall establish procedures for resolving complaints and 
grievances arising in connection with JTPA programs operated by the SDA, 
the SSG, and other subrecipients under the Act. The procedures also 
shall provide for resolution of complaints arising from actions taken by 
the SDA or the SSG with respect to investigations or monitoring reports 
of their subgrantees, contractors, and other subrecipients (section 
144(a)).
    (b) Each SDA and SSG grievance hearing procedure shall include 
written notice of the date, time, and place of the hearing; an 
opportunity to present evidence; a written decision; and a notice of 
appeal rights.
    (c) The SDA and SSG procedures shall provide for a decision within 
60 days of the filing of the complaint.



Sec. 627.503  Recipient-level review.

    (a) If a complainant does not receive a decision at the SDA or the 
SSG level within 60 days of filing the complaint or receives a decision 
unsatisfactory to the complainant, the complainant shall have the right 
to request a review of the complaint by the recipient. The recipient 
shall issue a decision within 30 days of receipt of the complaint.
    (b) The recipient shall also provide for an independent review, by a 
reviewer who is independent of the JTPA program, of a complaint 
initially filed at the recipient level on which a decision was not 
issued within 60 days of receipt of a complaint or on which the 
complainant has received an adverse decision. A decision shall be made 
within 30 days of receipt by the recipient.
    (c) A request for review under the provisions of paragraphs (a) or 
(b) of this section shall be filed within 10 days of receipt of the 
adverse decision or, if no timely decision is rendered, within 15 days 
from the date on which the complainant should have received a timely 
decision.
    (d) With the exception of complaints alleging violations of the 
labor standards under section 143 of the Act, the recipient's decision 
is final unless the Secretary exercises the authority for Federal-level 
review in accordance with the provisions at Sec. 627.601 of this part, 
Complaints and grievances at the Federal level. Complaints alleging 
violations of section 143 of the Act shall be handled under the 
procedures set forth at Sec. 627.603 of this part, special handling of 
labor standards violations under section 143.



Sec. 627.504  Noncriminal grievance procedure at employer level.

    (a) Recipients, SDA's, SSG's, and other subrecipients shall assure 
that other employers, including private-for-

[[Page 224]]

profit employers of participants under the Act, have a grievance 
procedure relating to the terms and conditions of employment available 
to their participants (section 144(b)).
    (b)(1) Employers under paragraph (a) of this section may operate 
their own grievance system or may utilize the grievance system 
established by the recipient, the SDA, or the SSG under this subpart, 
except as provided for in paragraph (b)(2) of this section. Employers 
shall inform participants of the grievance procedures they are to follow 
when the participant begins employment.
    (2) If an employer is required to use a certain grievance procedure 
under a covered collective bargaining agreement, then those procedures 
should be followed for the handling of JTPA complaints under this 
section.
    (c) An employer grievance system shall provide for, upon request by 
the complainant, a review of an employer's decision by the SDA, or the 
SSG and the recipient if necessary, in accordance with Sec. Sec. 
627.501 and 627.502 of this part.



     Subpart F_Federal Handling of Noncriminal Complaints and Other 
                               Allegations



Sec. 627.600  Scope and purpose.

    (a) This subpart establishes the procedures which apply to the 
filing, handling, and reviewing of complaints at the Federal level. 
Nothing in the Act or this chapter shall be construed to allow any 
person or organization to join or sue the Secretary with respect to the 
Secretary's responsibilities under JTPA except after exhausting the 
remedies in subpart E of this part and this subpart F.
    (b) Complaints of discrimination pursuant to section 167(a) of the 
Act shall be handled under 29 CFR part 34.



Sec. 627.601  Complaints and allegations at the Federal level.

    (a) The types of complaints and allegations that may be received at 
the Federal level for review include:
    (1) Complaints for which the recipient has failed to issue a timely 
decision as required by Sec. 627.503 of this part;
    (2) Alleged violations of the Act and/or the regulations promulgated 
thereunder resulting from Federal, State, and/or SDA and SSG monitoring 
and oversight reviews;
    (3) Alleged violations of the labor standards provisions at section 
143 of the Act;
    (4) Alleged violations of the relocation provisions in section 
141(c) of the Act; and
    (5) Other allegations of violations of the Act or the regulations 
promulgated thereunder.
    (b) Upon receipt of a complaint or allegation alleging any of the 
violations listed in paragraph (a) of this section, the Secretary may:
    (1) Direct the recipient to handle a complaint through local 
grievance procedures established under Sec. 627.502 of this part; or
    (2) Investigate and determine whether the recipient or 
subrecipient(s) are in compliance with the Act and regulations 
promulgated thereunder (section 163(b) and (c)).
    (3) Allegations of violations of sections 141(c) or 143 of the Act 
and Sec. 627.503 of this part shall be handled under paragraph (b)(2) 
of this section.



Sec. 627.602  Resolution of investigative findings.

    (a)(1) As a result of an investigation or monitoring by the 
Department, or of the actions specified in paragraph (b)(2) of Sec. 
627.601 of this part, the Grant Officer shall notify the recipient of 
the findings of the investigation and shall give the recipient a period 
of time, not to exceed 60 days, depending on the nature of the findings, 
to comment and to take appropriate corrective actions.
    (2) The Grant Officer shall review the complete file of the 
investigation and the recipient's actions. The Grant Officer's review 
shall take into account the sanction provisions of subpart G of this 
part. If the Grant Officer agrees with the recipient's handling of the 
situation, the Grant Officer shall so notify the recipient. This 
notification shall constitute final agency action.
    (3) If the Grant Officer disagrees with the recipient's handling of 
the matter, the Grant Officer shall proceed pursuant to Sec. 627.606 of 
this part, Grant officer resolution.

[[Page 225]]



Sec. 627.603  Special handling of labor standards violations under 
section 143 of the Act.

    (a) A complaint alleging JTPA section 143 violations may be 
submitted to the Secretary by either party to the complaint when:
    (1) The complainant has exhausted the grievance procedures set forth 
at subpart E of this part, or
    (2) The 60-day time period specified for reaching a decision under a 
procedure set forth at subpart E of this part has elapsed without a 
decision (section 144(a) and (d)(1)).
    (b)(1) The Secretary shall investigate the allegations contained in 
a complaint alleging violations of JTPA section 143, make a 
determination whether a violation has occurred, and issue a decision 
within 120 days of receipt by the Secretary of the complaint (section 
144(c) and (d)).
    (2) If the results of the Secretary's investigation indicate that a 
decision by a recipient under a procedure set forth at subpart E of this 
part requires modification or reversal, or that the 60-day time period 
for decision under section 144(a) has elapsed, the Secretary shall 
modify, reverse, or issue such decision.
    (3) If the Secretary modifies or reverses a decision made under a 
procedure set forth at subpart E of this part, or issues a decision 
where the 60-day time period has elapsed without a decision, the 
Secretary shall offer an opportunity for a hearing, in accordance with 
the procedures under section 166 of the Act and subpart H of this part 
(sections 144(d)(2) and 166(a)).
    (4) If the Secretary upholds a recipient's decision, the 
determination is the final decision of the Secretary (section 
144(d)(3)). This decision is not appealable to the Office of 
Administrative Law Judges.
    (c) Except as provided in paragraph (d) of this section, remedies 
available under this section to a grievant for violations of section 143 
of the Act shall be limited to:
    (1) Suspension or termination of payments under the Act;
    (2) Prohibition of placement of a participant, for an appropriate 
period of time, in a program under the Act with an employer that has 
violated section 143 of the Act, as determined under section 144(d) or 
(e) of the Act; and/or
    (3) Appropriate equitable relief (other than back pay) (section 
144(f)(1)).
    (d) Available remedies for violations of section 143(a)(4), (b)(1), 
(b)(3), and (d) of the Act include the remedies listed in paragraph (c) 
of this section, and may include the following:
    (1) Reinstatement of the grievant to the position held prior to 
displacement;
    (2) Payment of lost wages and benefits; and/or
    (3) Reestablishment of other relevant terms, conditions, and 
privileges of employment.
    (e) Nothing in this section shall be construed to prohibit a 
grievant from pursuing a remedy authorized under another Federal, State, 
or local law for a violation of section 143 of the Act (section 144(g)).



Sec. 627.604  Alternative procedure for handling labor standards 
violations under section 143 of the Act--binding arbitration.

    (a) A person alleging a violation of section 143 of the Act, as an 
alternative to processing the grievance under a procedure described at 
section 144 of the Act, may submit the grievance to a binding 
arbitration procedure, if a collective bargaining agreement covering the 
parties to the grievance so provides (section 144(e)(1)).
    (b) A person electing to have her/his complaint on JTPA section 143 
labor standard violations processed under binding arbitration 
provisions--
    (1) Shall choose binding arbitration before, and in lieu of, 
initiating a complaint under other grievance procedures established 
pursuant to section 144 of the Act, and
    (2) May not elect binding arbitration for a complaint that 
previously has been or is subject to any other grievance procedure 
established under the Act.
    (c) Binding arbitration decisions under the provisions of section 
144(e) of the Act are not reviewable by the Secretary.
    (d) The remedies available to a grievant under binding arbitration 
are limited to those set forth at section 144(f)(1)(C) and (f)(2) of the 
Act (section 144(e)(2)).

[[Page 226]]

    (e) Nothing in this section shall be construed to prohibit a 
grievant from pursuing a remedy authorized under another Federal, State, 
or local law for a violation of section 143 of the Act (section 144(g)).



Sec. 627.605  Special Federal review of SDA- and SSG-level complaints 
without decision.

    (a) Should the recipient fail to provide a decision as required in 
Sec. 627.503 of this part, the complainant may then request from the 
Secretary a determination whether reasonable cause exists to believe 
that the Act or regulations promulgated thereunder have been violated.
    (b) The Secretary shall act within 90 days of receipt of a request 
made pursuant to paragraph (a) of this section. Where there is 
reasonable cause to believe the Act or regulations promulgated 
thereunder have been violated, the Secretary shall direct the recipient 
to issue a decision adjudicating the dispute pursuant to recipient and 
local procedures. The Secretary's action does not constitute final 
agency action and is not appealable under the Act (sections 166(a) and 
144(c)). If the recipient does not comply with the Secretary's order 
within 60 days, the Secretary may impose a sanction upon the recipient 
for failing to issue a decision.
    (c) A request pursuant to paragraph (a) of this section shall be 
filed no later than 15 days from the date on which the complainant 
should have received a decision as required in Sec. 627.503 of this 
part. The complaint shall contain the following:
    (1) The full name, telephone number (if any), and address (if any) 
of the person making the complaint;
    (2) The full name and address of the respondent against whom the 
complaint is made;
    (3) A clear and concise statement of the facts, including pertinent 
dates, constituting the alleged violation;
    (4) The provisions of the Act, regulations promulgated thereunder, 
grant, or other agreement under the Act believed to have been violated;
    (5) A statement disclosing whether proceedings involving the subject 
of the request have been commenced or concluded before any Federal, 
State, or local authority, and, if so, the date of such commencement or 
conclusion, the name and address of the authority, and the style of the 
case; and
    (6) A statement of the date the complaint was filed with the 
recipient, the date on which the recipient should have issued decision, 
and an attestation that no decision was issued.
    (d)(1) A request pursuant to paragraph (a) of this section will be 
considered to have been filed when the Secretary receives from the 
complainant a written statement sufficiently precise to evaluate the 
complaint and the grievance procedure used by the recipient, the SDA, or 
the SSG.
    (2) When an imprecise request is received within the 15-day period 
prescribed in paragraph (a) of this section, the Secretary may extend 
the period for submission.



Sec. 627.606  Grant Officer resolution.

    (a) When the Grant Officer is dissatisfied with the State's 
disposition of an audit, as specified in Sec. 627.481 of this part, or 
other resolution of violations (including those arising out of incident 
reports or compliance reviews), with the recipient's response to 
findings resulting from investigations pursuant to Sec. 627.503 of this 
part, or if the recipient fails to comply with the Secretary's decision 
pursuant to Sec. 627.605(b) of this part, the initial and final 
determination process shall be used to resolve the matter.
    (b) Initial determination. The Grant Officer shall make an initial 
determination on the findings for both those matters where there is 
agreement and those where there is disagreement with the recipient's 
resolution, including the allowability of questioned costs or 
activities. Such initial determination shall be based upon the 
requirements of the Act, regulations promulgated thereunder, grants, 
contracts, or other agreements under the Act.
    (c) Informal resolution. The Grant Officer shall not revoke a 
recipient's grant in whole or in part, nor institute corrective actions 
or sanctions, without first providing the recipient with an opportunity 
to present documentation or arguments to resolve informally those 
matters in controversy contained in the initial determination.

[[Page 227]]

The initial determination shall provide for an informal resolution 
period which shall be at least 60 days from issuance of the initial 
determination. If the matters are resolved informally, the Grant Officer 
shall issue a final determination pursuant to paragraph (d) of this 
section which notifies the parties in writing of the nature of the 
resolution and may close the file.
    (d) Grant Officer's final determination. (1) If the matter is not 
fully resolved informally, the Grant Officer shall provide each party 
with a written final determination by certified mail, return receipt 
requested. For audits of recipient-level entities and other recipients 
which receive JTPA funds directly from DOL, ordinarily the final 
determination will be issued not later than 180 days from the date that 
the OIG issues the final approved audit report to the Employment and 
Training Administration. For audits of subrecipients conducted by the 
OIG, ordinarily the final determination will be issued not later than 
360 days from the date the OIG issues the final approved audit report to 
ETA.
    (2) A final determination under this paragraph (d) shall:
    (i) Indicate that efforts to informally resolve matters contained in 
the initial determination have been unsuccessful;
    (ii) List those matters upon which the parties continue to disagree;
    (iii) List any modifications to the factual findings and conclusions 
set forth in the initial determination;
    (iv) Establish a debt, if appropriate;
    (v) Require corrective action when needed;
    (vi) Determine liability, method of restitution of funds and 
sanctions; and
    (vii) Offer an opportunity for a hearing in accordance with subpart 
H of this part.
    (3) Unless a hearing is requested, a final determination under this 
paragraph (d) constitutes final agency action and is not subject to 
further review.
    (e) Nothing in this section shall preclude the Grant Officer from 
issuing an initial determination and/or final determination directly to 
a subrecipient, in accordance with section 164(e)(3) of the Act. In such 
a case, the Grant Officer shall inform the recipient of such action.



Sec. 627.607  Grant Officer resolution of Governor's failure to promptly 
take action.

    (a) An allegation, whether arising from a complaint, from monitoring 
or other information available to the Department, that a Governor failed 
to promptly take remedial action of a substantial violation of the Act 
or the regulations under this Act, as required by Sec. 627.477 of this 
part, shall be promptly investigated by the Department.
    (b) The Grant Officer shall notify the Governor of the findings of 
the investigation or monitoring and shall give the Governor a period of 
time, not to exceed 30 days, to comment on the nature of the findings 
and to take appropriate corrective actions.
    (c) The Grant Officer shall review the complete file of the 
investigation, monitoring, and the Governor's actions.
    (d) If the Grant Officer determines that, (1) as a result financial 
and compliance audits or otherwise, the Governor determined that there 
was a substantial violation of a specific provision of the Act or the 
regulations under this Act, and corrective action had not been taken 
and, (2) the Grant Officer determines that the Governor has not taken 
the actions required by Sec. 627.477(a), the Grant Officer shall take 
such actions required by Sec. 627.477(a).
    (e) The Grant Officer's determination, unless a hearing is 
requested, constitutes final agency action and is not subject to further 
review. (Section 164(b)(3)).



              Subpart G_Sanctions for Violations of the Act



Sec. 627.700  Purpose and scope.

    This subpart describes the sanctions and appropriate corrective 
actions that may be imposed by the Secretary for violations of the Act, 
regulations promulgated thereunder, or grant terms and conditions 
(sections 106(j)(5), 164 (b), (d), (e), (f), (g), and (h)).

[[Page 228]]



Sec. 627.702  Sanctions and corrective actions.

    (a) Except for actions under sections 106(j), 164 (b) and (f), and 
167 of the Act and the funding restrictions specified at Sec. 627.423 
of this part, Funding restrictions for ``high-risk'' recipients and 
subrecipients, the Grant Officer shall utilize initial and final 
determination procedures outlined in Sec. 627.606, Grant Officer 
resolution, of this part to impose a sanction or corrective action.
    (b) To impose a sanction or corrective action regarding a violation 
of section 167 of the Act, the Department shall utilize the procedures 
of 29 CFR part 34.
    (c) To impose a sanction or corrective action for failure to meet 
performance standards, where the recipient has not acted as required at 
section 106(j)(4), the Grant Officer shall utilize the procedures set 
forth at Sec. 627.470 (d) and (f).
    (d) To impose a sanction or corrective action for noncompliance with 
the procurement standards provisions set forth at Sec. Sec. 627.420 and 
627.703 of this part, where the recipient has not acted, the Grant 
Officer may utilize the procedures set forth at section 164(b) of the 
Act.
    (e) To impose a sanction or corrective action for the Governor's 
failure to promptly take remedial action of a substantial violation as 
required by Sec. 627.477 of this part, the Grant Officer shall utilize 
the procedure set forth in Sec. 627.607 of this part.
    (f) The recipient shall be held responsible for all funds under its 
grant(s). The recipient shall hold subrecipients, including SDA's and 
SSG's, responsible for JTPA funds received through the grant, and may 
ultimately hold the units of local government which constitute the SDA 
or the SSG responsible for such funds.
    (g) Nothing in this section shall preclude the Grant Officer from 
imposing a sanction directly against a subrecipient, as authorized in 
section 164(e)(3) of the Act. In such a case, the Grant Officer shall 
inform the recipient of such action.



Sec. 627.703  Failure to comply with procurement provisions.

    (a) If, as part of the recipient's annual on-site monitoring of its 
SDA's/SSG's, the recipient determines that an SDA/SSG is not in 
compliance with the procurement requirements established in accordance 
with the provisions at section 164(a)(3) of the Act and Sec. 627.420, 
of this part, Procurement, and Sec. 627.422 of this part, Selection of 
service providers, the recipient shall:
    (1) Require corrective action to secure prompt compliance; and
    (2) Impose the sanctions provided for under the provisions at 
section 164(b) if the recipient finds that the SDA/SSG has failed to 
take timely corrective action under paragraph (a)(1) of this section 
(section 164(a) (4) and (5)).
    (b) An action by the recipient to impose a sanction against either 
an SDA or SSG, in accordance with this section, may be appealed to the 
Secretary under the same terms and conditions as the disapproval of the 
respective plan, or plan modification, as set forth at Sec. 628.426(e), 
Review and approval (section 164(b)(2)).
    (c) If, upon a determination under paragraph (a)(2) of this section 
to impose a sanction under section 164(b) of the Act, the recipient 
fails to promptly take the actions required under paragraph (a)(2) of 
this section, the Secretary shall take such actions against the 
recipient or the SDA/SSG as appropriate (section 164(b)(3)).



Sec. 627.704  Process for waiver of State liability.

    (a) A recipient may request a waiver of liability as described in 
section 164(e)(2) of the Act.
    (b)(1) When the debt for which a waiver of liability is desired was 
established in a non-Federal resolution, such requests shall be 
accompanied by a resolution report.
    (2) When the ETA Grant Officer is resolving the finding(s) for which 
a waiver of liability is desired, such request shall be made no later 
than the informal resolution period described in Sec. 627.606(c) of 
this part.
    (c) A waiver of the recipient's liability can only be considered by 
the Grant Officer when the misexpenditure of JTPA funds:

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    (1) Occurred at a subrecipient level;
    (2) Was not a violation of section 164(e)(1) of the Act, or did not 
constitute fraud; or
    (3) If fraud did exist, it was perpetrated against the recipient/
subrecipient; and:
    (i) The recipient/subrecipient discovered, investigated, reported, 
and prosecuted the perpetrator of said fraud; and
    (ii) After aggressive debt collection action, it can be documented 
that there is no likelihood of collection from the perpetrator of the 
fraud.
    (4) The recipient has issued a final determination which disallows 
the misexpenditure, the recipient's appeal process has been exhausted, 
and a debt has been established; and
    (5) The recipient requests such a waiver and provides documentation 
to demonstrate that it has substantially complied with the requirements 
of section 164(e)(2)(A), (B), (C), and (D) of the Act.
    (d) The recipient shall not be released from liability for misspent 
funds under the determination required by section 164(e) of the Act 
unless the Grant Officer determines that further collection action, 
either by the recipient or subrecipient, would be inappropriate or would 
prove futile.



Sec. 627.706  Process for advance approval of a recipient's contemplated 
corrective actions.

    (a) The recipient may request advance approval from the Grant 
Officer for contemplated corrective actions, including debt collection 
actions, which the recipient plans to initiate or to forego. The 
recipient's request shall include a description and an assessment of all 
actions taken by the subrecipient to collect the misspent funds.
    (b) Based on the recipient's request, the Grant Officer may 
determine that the recipient may forego certain collection actions 
against a subrecipient where:
    (1) The subrecipient was not at fault with respect to the liability 
criteria set forth in section 164(e)(2)(A), (B), (C), and (D) of the 
Act;
    (2) The misexpenditure of funds:
    (i) Was not made by that subrecipient but by an entity that received 
JTPA funds from that subrecipient;
    (ii) Was not a violation of section 164(e)(1) of the Act, or did not 
constitute fraud; or
    (iii) If fraud did exist, it was perpetrated against the 
subrecipient, and:
    (A) The subrecipient discovered, investigated, reported, and 
prosecuted the perpetrator of said fraud; and
    (B) After aggressive debt collection action, it can be documented 
that there is no likelihood of collection from the perpetrator of the 
fraud.
    (3) A final determination which disallows the misexpenditure and 
establishes a debt has been issued at the appropriate level;
    (4) Final action within the recipient's appeal system has been 
completed; and
    (5) Further debt collection action by that subrecipient or the 
recipient would be either inappropriate or futile.



Sec. 627.708  Offset process.

    (a) In accordance with section 164(d) of the Act, the primary 
sanction for misexpenditure of JTPA funds is repayment.
    (b) A recipient may request that a debt, or a portion thereof, be 
offset against amounts allotted to the recipient, and retained at the 
recipient level for administrative costs, under the current or a future 
JTPA entitlement.
    (1) For title II grants, any offset shall be applied against the 
recipient level 5 percent administrative cost set-aside only and may not 
be distributed by the recipient among its subrecipients.
    (2) For title III grants, any such offset must be applied against 
that portion of funds reserved by the recipient for recipient level 
administration only and may not be distributed by the recipient among 
its subrecipients.
    (c) The Grant Officer may approve an offset request, under section 
164(d) of the Act, if the misexpenditures were not in violation of 
section 164(e)(1) of the Act.
    (d) If offset is granted, the debt shall not be fully satisfied 
until the Grant Officer reduces amounts allotted to the State by the 
amount of the misexpenditure.
    (e) The recipient shall not have the authority to reduce allocations 
to an

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SDA or SSG for misexpenditure of JTPA funds under section 164(d) of the 
Act.



      Subpart H_Hearings by the Office of Administrative Law Judges



Sec. 627.800  Scope and purpose.

    (a) The jurisdiction of the Office of the Administrative Law Judges 
(OALJ) extends only to those complainants identified in sections 141(c), 
144(d), 164(f), and 166(a) of the Act.
    (b) Actions arising under section 167 of the Act shall be handled 
under 29 CFR part 34.
    (c) All other disputes arising under the Act shall be adjudicated 
under the appropriate recipient or subrecipient grievance procedures or 
other applicable law.



Sec. 627.801  Procedures for filing request for hearing.

    (a) Within 21 days of receipt of a final determination imposing a 
sanction or corrective action or denying financial assistance, the 
applicant, the recipient, the SDA, the SSG, or other subrecipient, or a 
vendor against which the Grant Officer has imposed a sanction or 
corrective action may appeal the Grant Officer's determination to the 
OALJ. A request for a hearing shall be transmitted by certified mail, 
return receipt requested, to the Chief Administrative Law Judge, U.S. 
Department of Labor, 800 K Street, NW., Suite 400, Washington, DC 20001, 
with one copy to the departmental official who issued the determination.
    (b) The 21-day filing requirement in paragraph (a) of this section 
is jurisdictional. Failure to timely request a hearing acts as a waiver 
of the right to hearing.
    (c) A request for a hearing under this section shall state 
specifically those issues of the final determination upon which review 
is requested. Those provisions of the final determination not specified 
for review, or the entire final determination when no hearing has been 
requested within the 21 days, shall be considered resolved and not 
subject to further review. Only alleged violations of the Act, 
regulations promulgated thereunder, grant or other agreement under the 
Act fairly raised in the determination and the request for hearing are 
subject to review.
    (d) The procedures set forth in this subpart apply in the case of a 
complainant who has not had a dispute adjudicated under the alternative 
dispute resolution process set forth in Sec. 627.805 of this part 
within 60 days, except that the request for hearing before the OALJ must 
be filed within 15 days of the conclusion of the 60-day period. In 
addition to including the final determination upon which review is 
requested, the complainant shall include a copy of any Stipulation of 
Facts and a brief summary of proceedings.



Sec. 627.802  Rules of procedure.

    (a) The rules of practice and procedure promulgated by the OALJ, at 
subpart A of 29 CFR part 18, shall govern the conduct of hearings under 
this section, except that a request for hearing under this section shall 
not be considered a complaint to which the filing of an answer by DOL or 
a DOL agency or official is required. Technical rules of evidence shall 
not apply to hearings conducted pursuant to this part; however, rules or 
principles designed to assure production of the most credible evidence 
available and to subject testimony to cross-examination shall apply.
    (b) Prehearing procedures. In all cases, the ALJ should encourage 
the use of prehearing procedures to simplify and to clarify facts and 
issues.
    (c) Subpoenas. Subpoenas necessary to secure the attendance of 
witnesses and the production of documents or things at hearings shall be 
obtained from the ALJ and shall be issued pursuant to the authority 
contained in section 163(b) of the Act, incorporating 15 U.S.C. 49.
    (d) Timely submission of evidence. The ALJ shall not permit the 
introduction at the hearing of any documentation if such documentation 
has not been made available for review by the other parties to the 
proceeding either at the time ordered for any prehearing conference, or, 
in the absence of such an order, at least 3 weeks prior to the hearing 
date.
    (e) Burden of production. The Grant Officer shall have the burden of 
production to support her or his decision. To

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this end, the Grant Officer shall prepare and file an administrative 
file in support of the decision which shall be made part of the record. 
Thereafter, the party or parties seeking to overturn the Grant Officer's 
decision shall have the burden of persuasion.



Sec. 627.803  Relief.

    In ordering relief, the ALJ shall have the full authority of the 
Secretary under section 164 of the Act.



Sec. 627.804  Timing of decisions.

    The ALJ should render a written decision not later than 90 days 
after the closing of the record.



Sec. 627.805  Alternative dispute resolution.

    (a) Parties to a complaint under Sec. 627.801 of this part, 
Procedures for filing a request for hearing, may choose to waive their 
rights to an administrative hearing before the OALJ by choosing to 
transfer the settlement of their dispute to an individual acceptable to 
all parties for the purpose of conducting an informal review of the 
stipulated facts and rendering a decision in accordance with applicable 
law. A written decision will be issued within 60 days after the matter 
is submitted for informal review.
    (b) The waiver of the right to request a hearing before the OALJ may 
be revoked if a settlement has not been reached or a decision has not 
been issued within the 60 days provided in paragraph (a) of this 
section.
    (c) The decision rendered under this informal review process shall 
be treated as a final decision of an Administrative Law Judge pursuant 
to section 166(b) of the Act.



Sec. 627.806  Other authority.

    Nothing contained in this subpart shall be deemed to prejudice the 
separate exercise of other legal rights in pursuit of remedies and 
sanctions available outside the Act.



                     Subpart I_Transition Provisions



Sec. 627.900  Scope and purpose.

    (a) Regulations set forth at parts 626, 627, 628, 629, 630, 631, and 
637 of 20 CFR chapter V (1993) were amended, effective December 29, 
1992, and were published as an interim final rule to provide planning 
guidance for States and SDA's on the changes made to the JTPA program as 
a result of the 1992 JTPA amendments (See 57 FR 62004 (December 29, 
1992)). The transition provisions of the regulations were amended on 
June 3, 1992 (see 58 FR 31472, June 3, 1993). Those regulations and the 
statutory amendments were effective for the program year beginning July 
1, 1993 (PY 1993), and succeeding program years. For PY 1992, JTPA 
programs and activities shall continue under the regulations set forth 
at 20 CFR parts 626, 627, 628, 629, 630, 631, and 637 (1992).
    (b) In order to provide for the orderly transition to and 
implementation of the provisions of JTPA, as amended by the 1992 
amendments, this subpart I applies to the use of JTPA title II and title 
III funds allotted by formula to the States. Additional guidance on 
transition matters may be provided in administrative issuances. The 
provisions in this subpart are operational during the transition period 
for implementing the 1992 JTPA amendments.



Sec. 627.901  Transition period.

    The transition period ended June 30, 1993 unless otherwise stated. 
The intent of the transition period is to complete, to the extent 
possible, activity begun on or before June 30, 1993 under current policy 
and regulations and to ensure that all requirements mandated by the 1992 
JTPA amendments have been implemented.



Sec. 627.902  Governor's actions.

    The following are actions required to be taken prior to July 1, 
1993:
    (a) Review current policies, practices, procedures, and delivery 
systems to ensure that they conform to the requirements of the 
amendments;
    (b) Modify the Governor's coordination and special services plan in 
accordance with instructions issued by the Secretary;
    (c) Ensure that SDAs modify job training plans as necessary;
    (d) Execute a new Governor/Secretary agreement and a new grant 
agreement;

[[Page 232]]

    (e) Issue procurement standards that comply with the Act and these 
regulations, as described in Sec. 627.420 of this part, Procurement;
    (f) Issue instructions necessary to implement program year 1993 cost 
categories pursuant to Sec. 627.440 of this part, Classification of 
costs;
    (g) Issue instructions necessary for SDAs to report program 
expenditures by year of appropriation pursuant to Sec. 627.455 of this 
part, Reports required;
    (h) Certify private industry councils pursuant to Sec. 628.410 of 
this chapter, Private Industry Council.



Sec. 627.903  Actions which are at the discretion of the Governor.

    (a) Establish a State Human Resource Investment Council (HRIC);
    (b) Issue instructions to ``grandparent'' participants in JTPA 
programs as of June 30, 1993 for purposes of completing training;
    (c) Issue instructions for use of PY 1992 and prior year 6 percent 
performance standards incentive funds to further develop and implement 
data collection and management information systems to track the program 
experience of participants. PY 1993 and subsequent performance standards 
incentive funds may not to be used for this purpose;
    (d) Of the Title II and Title III unobligated balance of funds 
available as of June 30, 1993, any amount may be reprogrammed into PY 
1993 activity. The Department believes these amounts will be minimal and 
not represent a significant proportion of the funds available. Such 
reprogrammed funds will be subject to requirements contained in JTPA 
regulations effective July 1, 1993.



Sec. 627.904  Transition and implementation.

    (a) Review. The Governor shall conduct a comprehensive review of the 
current policies, procedures, and delivery systems relating to programs 
authorized under the Job Training Partnership Act for the purpose of 
ensuring the effective implementation of the amendments. Such a review 
shall include consideration of the appropriateness of current SDA 
designations, the representation on current State and local councils, 
the adequacy of current administrative systems, the effectiveness of 
current outreach, service delivery, and coordination activities, and 
other relevant matters.
    (b) Governor's Coordination and Special Services Plan (GCSSP). The 
GCSSP requires modification to assure conformance to the requirements of 
the amendments. The plan was to be modified pursuant to instructions 
issued by the Secretary and shall be submitted to the Secretary for 
review by May 15, 1993.
    (c) Job training plans. Service delivery area job training plans 
will require modification to comply with Sec. 628.420 of this chapter, 
Job training plan.
    (d) Governor/Secretary agreement and grant agreement. A new 
Governor/Secretary agreement is required to assure that the State shall 
comply with JTPA, as amended, and the applicable rules and regulations; 
the Wagner-Peyser Act, as amended, and the applicable rules and 
regulations. A new grant agreement is needed to provide the basis for 
Federal obligation of funds for programs authorized by Titles I, II, and 
III, and such other funds as the Secretary may award under the grant.
    (e) Procurement standards. In order to ensure fiscal accountability 
and prevent waste, fraud, and abuse in programs administered under JTPA, 
as amended, the Governor shall prescribe and implement procurement 
standards meeting the requirements of Sec. 627.420 of this part, 
Procurement. All procurements initiated on or after July 1, 1993 shall 
be governed by and follow the requirements in Sec. 627.420 of this 
part. Initiation of procurement means any sole source or small purchase 
awarded on or after July 1, 1993 and any Invitation for Bid or Request 
for Proposal issued on or after July 1, 1993.
    (f) Participants. In order to have the least possible disruption to 
program participants, during PY 1993, Governors and SDAs have the 
flexibility to grandfather participants already enrolled in JTPA 
programs up to and including June 30, 1993 under existing rules and 
regulations. All participants in programs on June 30, 1993, will be 
eligible for transfer to programs operated under the new provisions at 
any time

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beginning on July 1, 1993. ``Hard to serve'' barriers to participation, 
assessment and Individual Service Strategy provisions of the amendments 
will not apply to participants enrolled prior to July 1, 1993 or to 1993 
Title II-B participants.
    (g) Cost categories. (1) Cost categories applicable to PY 1992 and 
earlier funds will be subject to prior regulations either until the 
funds have been exhausted or program activity has been completed. In 
order to assist the orderly transition to and implementation of the new 
requirements of the 1992 JTPA amendments, an increase is allowed in the 
administrative cost limitation for PY 1992 funds from 15 percent to 20 
percent, with a corresponding adjustment to cost limitations for 
training and participant support. Specifically, not less than 80 percent 
of the title II-A funds shall be expended for training and participant 
support, and not less than 65 percent shall be expended for training.
    (2) Any prior year's carryover funds made available for use in PY 
1993 will be subject to the reporting requirements and cost categories 
applicable to PY 1993 funds.
    (3) In determining compliance with the JTPA cost limitations for PY 
1992, Governors may either:
    (i) Determine cost limitation compliance separately for funds 
expended in accordance with paragraphs (g)(1) and (g)(2) of this 
section; or
    (ii) Determine compliance for each cost category against the total 
PY 1992 funds, whether expended in accordance with the Act and 
regulations in effect prior to the 1992 amendments to JTPA or in 
accordance with the amended Act and these regulations. Using this 
option, the total combined funds expended for training and direct 
training should be at least 65 percent of PY 1992 SDA allocations.
    (4) In addition to the institutions specified in Sec. 
627.440(d)(1)(vi)(B), the costs of tuition and entrance fees of a 
postsecondary vocational institution specified at section 481(c) of the 
Higher Education Act (20 U.S.C. 1088(c)) may be charged to direct 
training services through June 30, 1995, when such tuition charges or 
entrance fees are not more than the educational institution's catalog 
price, are necessary to receive specific training, are charged to the 
general public to receive such training, and are for the training of 
participants.
    (h) Financial reporting. Notwithstanding reprogramming, expenditures 
must be recorded separately by year of appropriation.
    (i) Private Industry Council. The private industry councils shall be 
certified pursuant to Sec. 628.410 of this chapter, Private Industry 
Council.
    (j) Grievances, investigations, and hearings. Generally, all 
grievances, investigations and hearings pending on or before June 30, 
1993 should be resolved and settled under prior rules and procedures. 
Grievances, investigations, and hearings occurring on or after July 1, 
1993 will be governed by the procedures described in subparts E, F, and 
H of this part 627.
    (k) Summer program. (1) The Title II-B Summer Youth Employment 
Program for 1993 shall be governed by the Act and regulations in effect 
prior to the Amendments (prior to September 7, 1992).
    (2) Up to 10 percent of the 1993 title II-B funds available may be 
transferred to the title II-C program.
    (l) SDA designation. At the Governor's discretion, SDA's designated 
prior to July 1, 1992 need not be subject to the provisions of Sec. 
628.405, Service delivery areas.
    (m) Program implementation. The implementation by the States and 
SDA's of certain new program design requirements, particularly objective 
assessment and development of individual service strategies (ISS), may 
require additional time to fully implement beyond July 1, 1993. 
Reasonable efforts to implement the provisions of Sec. Sec. 628.515, 
628.520, and 628.530. as soon as possible after July 1, 1993, are 
expected to be made. However, it is not expected that every new 
participant will initially receive objective assessment, ISS, and 
referral to non-title II services for a period of 6 months, or until 
January 1, 1994.
    (n) Out-of-school youth ratio. The 50-percent out-of-school 
participants requirement for title II-C will be phased in during PY 1993 
and will not be the subject of compliance review until PY

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1994, beginning July 1, 1994. During PY 1993, however, SDA's must show 
significant improvement in the proportion of out-of-school youth being 
served and performance in increasing the service ratio will be monitored 
by the States and DOL during this implementation period.
    (o) Administrative issuances. Other implementation issues may be 
handled by administrative issuance. ETA will transmit such guidance 
directly to all Governors via a Training and Employment Guidance Letter 
(TEGL). Such TEGL's will be published as Notices in the Federal Register 
(section 701(i)).



Sec. 627.905  Guidance on contracts and other agreements.

    The Department does not intend for contracts, agreements, inter-
agency agreements, retainers, and similar arrangements to be negotiated 
and/or entered into for the sole purpose of applying previously existing 
rules and regulations. The 1992 JTPA amendments were effective July 1, 
1993. The Department intends that contracts, awards and agreements 
entered into on or before June 30, 1993 are to be used to serve and/or 
train participants enrolled on or before June 30, 1993, unless the 
contracts and agreements are modified to comply with the new amendments 
and regulations.



Sec. 627.906  Determinations on State and SDA implementation.

    (a) The Department expects that the States and SDA's will fully 
implement the provisions of the Act and these regulations regarding 
procurement, cost principles, cost categories, cost limitations, 
participant service requirements and eligibility beginning July 1, 1993.
    (b) The Department expects that the implementation by the States and 
SDA's of the program design features in these regulations, particularly 
objective assessment and development of the ISS, may require additional 
time beyond July 1, 1993 to fully implement.
    (c) In deciding to allow or disallow questioned costs related to the 
implementation of the provisions described in paragraph (b) of this 
section, the Grant Officer will consider the extent to which the State's 
and SDA's have made good faith efforts in properly implementing such 
provisions in the period July 1, 1993 through June 30, 1994.



PART 628_PROGRAMS UNDER TITLE II OF THE JOB TRAINING PARTNERSHIP ACT
--Table of Contents




                       Subpart A_Scope and Purpose

Sec.
628.100 Scope and purpose of part 628.

                        Subpart B_State Planning

628.200 Scope and purpose.
628.205 Governor's coordination and special services plan.
628.210 State Job Training Coordinating Council.
628.215 State Human Resource Investment Council.

                        Subpart C_State Programs

628.300 Scope and purpose.
628.305 State distribution of funds.
628.310 Administration.
628.315 Education coordination and grants.
628.320 Services for older individuals.
628.325 Incentive grants, capacity building and technical assistance.

                 Subpart D_Local Service Delivery System

628.400 Scope and purpose.
628.405 Service delivery areas.
628.410 Private Industry Council.
628.415 Selection of SDA grant recipient and administrative entity.
628.420 Job training plan.
628.425 Review and approval.
628.426 Disapproval or revocation of the plan.
628.430 State SDA submission.

Subpart E_Program Design Requirements for Programs Under Title II of the 
                      Job Training Partnership Act

628.500 Scope and purpose.
628.505 Eligibility.
628.510 Intake, referrals, and targeting.
628.515 Objective assessment.
628.520 Individual service strategy.
628.525 Limitations.
628.530 Referrals of participants to non-title II programs.
628.535 Limitations on job search assistance.
628.540 Volunteer program.
628.545 Linkages and coordination.
628.550 Transfer of funds.

                       Subpart F_The Adult Program

628.600 Scope and purpose.
628.605 Eligibility.

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628.610 Authorized services.

       Subpart G_The Summer Youth Employment and Training Program

628.700 Scope and purpose.
628.701 Program goals and objectives.
628.702 Eligibility.
628.705 SYETP authorized services.
628.710 Period of program operation.

                    Subpart H_Youth Training Program

628.800 Scope and purpose.
628.803 Eligibility.
628.804 Authorized services.

    Authority: 29 U.S.C. 1579(a).

    Source: 59 FR 45845, Sept. 2, 1994, unless otherwise noted.



                       Subpart A_Scope and Purpose



Sec. 628.100  Scope and purpose of part 628.

    (a) This part sets forth requirements for implementation of programs 
under title II of the Job Training Partnership Act, and includes the 
councils described in subpart B that have responsibilities under titles 
I, II, and III. In this part, the provisions generally pertaining to 
title II are covered in subparts B, C, D, and E. Matters specific to 
titles IIA, II-B, or II-C are addressed in subparts F, G, or H, 
respectively.
    (b) Title II-A Adult Training programs are to prepare adults for 
participation in the labor force by providing job training and other 
services that will result in increased employment and earnings, 
increased occupational and educational skills, reduced welfare 
dependency, and result in improved long-term employability.
    (c) Title II-B Summer Youth Employment and Training programs are to 
provide eligible youth with exposure to the world of work, to enhance 
the basic education skills of youth, to encourage school completion or 
enrollment in supplemental or alternative school programs and to enhance 
the citizenship skills of youth.
    (d) Title II-C Youth Training programs are to improve the long-term 
employability of youth; to enhance the educational, occupational and 
citizenship skills of youth; to encourage school completion or 
enrollment in alternative school programs; to increase the employment 
and earnings of youth; to reduce welfare dependency; and to assist youth 
in addressing problems that impair their ability to make successful 
transition from school to work, to apprenticeship, to the military or to 
postsecondary education and training.



                        Subpart B_State Planning



Sec. 628.200  Scope and purpose.

    This subpart provides requirements for the submission of the 
Governor's Coordination and Special Services Plan, as well as the 
procedures for plan review. This subpart also contains requirements for 
the composition and responsibilities of the State Job Training 
Coordinating Council and the State Human Resource Investment Council.



Sec. 628.205  Governor's coordination and special services plan.

    (a)(1) Submittal. By a date established by the Secretary, each State 
seeking financial assistance under the Act shall submit to the 
Secretary, biennially, the Governor's coordination and special services 
plan (GCSSP) encompassing two program years (section 121(a)).
    (2) The GCSSP shall address the requirements of section 121(b) of 
the Act, including a description of the Governor's coordination 
criteria; the measures taken by the State to ensure coordination and 
prevent duplication with the Job Opportunities and Basic Skills (JOBS) 
program; the certification of the implementation of the procurement 
system, as required at section 164(a)(6) of the Act; the technical 
assistance and training plan; goals, and the efforts to accomplish such 
goals, for the training and placement of women in nontraditional 
employment and apprenticeship; the projected use of resources, including 
oversight of program performance; program administration; program 
financial management and audit resolution procedures; capacity building; 
priorities and criteria for State incentive grants; and performance 
goals for State supported programs (section 121(b)).
    (b) GCSSP review. The Secretary shall review the GCSSP for overall 
compliance with the provisions of the Act. If the GCSSP is disapproved, 
the Secretary shall notify the Governor, in

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writing, within 45 days of submission of the reasons for disapproval so 
that the Governor may modify the plan to bring it into compliance with 
the Act (section 121(d)).
    (c) Information to SDA's. (1) In the year preceding the program 
years for which the plan is developed, the State shall make available to 
the SDA's in the State information on its plans to undertake State 
activities in program areas including education coordination grants, 
services to older workers, and capacity building.
    (2) The information described in paragraph (c)(1) of this section 
shall be provided to SDA's in sufficient time for SDA's to take it into 
consideration in developing local job training plans.



Sec. 628.210  State Job Training Coordinating Council.

    (a) The Governor shall appoint a State Job Training Coordinating 
Council (SJTCC) pursuant to section 122 of the Act. In lieu of a SJTCC, 
the Governor may establish and utilize a State Human Resource Investment 
Council (HRIC) pursuant to section 701 of the Act and in accordance with 
Sec. 628.215 of this part.
    (b) Consistent with section 122(a)(3) of the Act, the SJTCC shall be 
composed as follows: 30 percent, business and industry representatives; 
30 percent, State and local government and local education agency 
representatives; 30 percent, organized labor and community-based 
organization representatives; and 10 percent, representatives from the 
general public. The SJTCC shall have the specific functions and 
responsibilities outlined in sections 122, 317, and 501 of the Act.
    (c) Funding for the SJTCC shall be provided pursuant to sections 
202(c)(1)(A) and 262(c)(1)(A) of the Act.
    (d) The SJTCC shall:
    (1) Analyze the SDAs' reports made pursuant to section 104(b)(13) of 
the Act and make recommendations for technical assistance and corrective 
action, and
    (2) Prepare a summary of such reports and disseminate them to SDA's 
and service providers in the State and to the Secretary (section 
122(a)(5) and (6)).



Sec. 628.215  State Human Resource Investment Council.

    (a) Establishment and responsibilities. The State may, in accordance 
with sections 701, 702, and 703 of the Act, establish a State Human 
Resource Investment Council (HRIC). The HRIC's responsibilities are 
described at section 701(a) of the Act. The HRIC shall carry out the 
following responsibilities:
    (1) Review the provision of services and the use of funds and 
resources under applicable Federal human resource programs and advise 
the Governor on methods of coordinating such provision of services and 
use of funds and resources consistent with the laws and regulations 
governing such programs;
    (2) Advise the Governor on the development and implementation of 
State and local standards and measures relating to applicable Federal 
human resource programs and coordination of such standards and measures; 
and
    (3) Carry out the duties and functions prescribed for existing State 
councils described under the laws relating to the applicable Federal 
human resource programs, including the responsibilities of the State 
Council on Vocational Education (SCOVE) under Section 112 of the Carl D. 
Perkins Vocational and Applied Technology Education Act.
    (4) Perform other functions as specified by the Governor (section 
701).
    (b) Applicable Programs. For the purposes of this section, the 
programs included are those listed at section 701(b)(2) of the Act. A 
program shall be included only if the Governor and the head of the State 
agency responsible for the administration of the program jointly agree 
to include such program. In addition, programs under the Carl Perkins 
Vocational and Applied Technology Act shall require the agreement of the 
State council on vocational education (section 701(b)(1)(B)).
    (c) Composition. (1) The Governor shall establish procedures to 
ensure appropriate representation on the HRIC from among the categories 
of representation specified in section 702 of the Act.
    (2) In addition, when the functions and responsibilities of the 
SCOVE are included on the HRIC, the Governor is

[[Page 237]]

encouraged to consider appointing the State Director for Vocational 
Education as a representative on the HRIC.
    (d) Funding. (1) Funding to carry out the functions of the HRIC 
shall be available pursuant to section 703(a) of the Act.
    (i) The costs associated with the operation of the HRIC should be 
allocated among the various funding sources based on the relationship of 
each funding source or program to total spending of all applicable 
funding sources and programs (section 703(d)).
    (ii) Costs of the HRIC that are in excess of costs paid by funds 
from participating State agencies are, subject to the availability of 
funds from applicable JTPA sources, allowable JTPA costs (section 703(a) 
and (d)).
    (2) A HRIC which meets the requirements of title VII and includes 
each of the programs listed at section 701(b)(2)(A) of the Act shall be 
authorized to use JTPA State Education Coordination and Grants funds 
(section 123(a)(2)(D)(ii)).
    (e) Replacement of other councils. A HRIC meeting the requirements 
of title VII of the Act shall replace the councils of the participating 
programs listed at section 701(b)(2)(A) of the Act.
    (f) Expertise. The Governor shall ensure that in the composition of 
the HRIC and the staff of the HRIC there exists the proper expertise to 
carry out the functions of the HRIC and the council(s) it replaces 
(sections 702(c)(2) and 703(b)).
    (g) Certification. Each State, as part of the certification process 
to the Secretary, shall ensure that the council meets the requirements 
of sections 701, 702, and 703. This certification shall be made in 
writing and submitted to the Secretary, with a copy provided to the 
Secretary of Education, at least 90 days before the beginning of each 
period of 2 program years for which a job training plan is submitted 
under the Act.



                        Subpart C_State Programs



Sec. 628.300  Scope and purpose.

    This subpart provides requirements for the State-operated programs 
including the education coordination and grants, services to older 
workers, and incentive grants to SDA's and grants to SDA's for capacity 
building and technical assistance.



Sec. 628.305  State distribution of funds.

    (a) The funds made available to the Governor under sections 202(c) 
and 262(c) of the Act shall be used to carry out activities and services 
under this subpart.



Sec. 628.310  Administration.

    Funds provided to the Governor under sections 202(c)(1)(A) and 
262(c)(1)(A) of the Act may be used for overall administration, 
management, oversight of program performance; technical assistance to 
SDA's failing to meet performance standards, as described in section 
106(j)(1) of the Act; auditing; and activities under sections 121 and 
122 of the Act.



Sec. 628.315  Education coordination and grants.

    (a) Governor's responsibilities. The Governor shall allocate funds 
available pursuant to sections 202(c)(1)(C) and 262(c)(1)(C) of the Act 
to any State education agency. For the purposes of this section, ``State 
education agency'' shall not include the State agency which administers 
the JTPA program within the State or other agencies which do not have 
education as a primary and operational function, such as correctional 
agencies, although this limitation shall not preclude such an agency 
from being an ultimate subrecipient of funds (section 123(a)(1)).
    (b) Agreements. (1) The State education agency to be allocated funds 
under section 123(a)(1) of the Act shall participate in joint planning 
activities with the Governor in order to develop a plan which shall be 
submitted in the GCSSP (section 123(c)).
    (2) The Governor and the State education agency shall jointly agree 
on the plan required in paragraph (b)(1) of this section, which shall 
include a description of the agreements described in paragraph (b)(3) of 
this section (section 123(c)).
    (3) Projects to undertake the activities set forth in section 
123(a)(2) shall be conducted in accordance with agreements between the 
State education agency(ies) and administrative entities

[[Page 238]]

in service delivery areas in the State. The agreements may include other 
entities such as State agencies, local education agencies and 
alternative service providers (section 123(b)(1)(B)).
    (4)(i) When there is a failure by the State education agency and the 
Governor to develop the joint plan described in paragraph (b)(2) of this 
section, the Governor shall not allocate funds under section 123(a)(1) 
to such education agency nor shall such funds be available for 
expenditure by the Governor (section 123(c)).
    (ii) When no State education agency accepts the allocation of funds 
under section 123(a)(1), or when there is a failure to reach the 
agreement(s) specified in paragraph (b)(3) of this section, the funds 
may only be used by the Governor pursuant to section 123(e) and in 
accordance with the GCSSP (section 123(e)).
    (c) Allowable activities. (1) Funds made available for education 
coordination and grants under section 123 of the Act shall be used to 
pay the Federal share of education coordination and grants projects 
(section 123(a)(2)).
    (2) Projects, as defined at section 123(a)(2)(A), (B), and (C) of 
the Act shall be conducted for eligible individuals and should include 
those which:
    (i) Provide school-to-work services of demonstrated effectiveness, 
including youth apprenticeship programs;
    (ii) Provide literacy and lifelong learning opportunities and 
services of demonstrated effectiveness, including basic education and 
occupational skills training; and
    (iii) Provide statewide coordinated approaches to education and 
training services, including model programs, designed to train, place, 
and retain women in nontraditional employment (section 123(a)).
    (3) Projects for coordination of education and training may also be 
conducted which may include support activities pertaining to the HRIC 
which meets the requirements of title VII.
    (d) Expenditure requirements. (1)(i) At least 80 percent of the 
funds allocated under section 202(c)(1)(C) and section 262(c)(1)(C) of 
the Act shall be expended to pay for the Federal share of projects 
described in paragraph (c)(2) of this section (section 123(d)(2)(B)).
    (ii) The Governor shall assure that not less than 75 percent of the 
funds expended for such projects are expended for projects for eligible 
economically disadvantaged participants who experience barriers to 
employment. For purposes of meeting this requirement, participants 
meeting the conditions of section 263(a)(2)(B) and (C) and (g) of the 
Act may be considered economically disadvantaged (section 123(d)(2)(C)).
    (iii) Priority for funds not expended for the economically 
disadvantaged shall be given to title III participants and persons with 
barriers to employment.
    (iv) The Governor may assure compliance with the requirement to 
serve participants with barriers to employment by targeting projects to 
particular barrier groups (e.g., school dropouts).
    (2) Not more than 20 percent of funds allocated under section 
202(c)(1)(C) of the Act may be expended to:
    (i) Facilitate coordination of education and training services for 
participants in the projects described in section 123(a)(2)(A), (B) and 
(C), or
    (ii)(A) Support activities pertaining to a HRIC that meets the 
requirements of Sec. 628.215 of this part, or
    (B) Support activities pertaining to a State council which carries 
out functions similar to those of a HRIC if such council was established 
prior to July 1, 1992.
    (e) Contribution. (1) Except as provided in paragraph (e)(3) of this 
section, the State shall provide for the contribution of funds, other 
than the funds made available under this Act, of a total amount equal to 
the amounts allotted under Section 123;
    (2) The Governor shall define and assure the provision of adequate 
resources by the State to meet the requirements of paragraph (e)(1) of 
this section. Such amount may include the direct cost of employment and 
training services provided by other Federal programs or agencies if such 
use for matching is in accordance with the applicable Federal law 
governing the use of such funds.
    (3) When there is a failure to reach agreement between the State 
education agency and the administrative

[[Page 239]]

entity in the service delivery area, as set forth in paragraph (b)(3) of 
this section, the requirement for the contribution of funds shall not 
apply.
    (f) Eligible youth, age 14 through 15, may be served in the program 
under this section to the extent set forth in the agreements under 
paragraph (b)(3) of this section.



Sec. 628.320  Services for older individuals.

    (a) Consultation. (1) The Governor shall consult with the 
appropriate PIC's and chief elected official(s) prior to entering into 
agreements to provide services under section 204(d) and to assure that 
services provided to participants under section 204(d) are consistent 
with the programs and activities provided in the SDA to eligible older 
participants.
    (2) The GCSSP shall specify the process for accomplishing the 
consultation required by paragraph (a)(2) of this section.
    (b) Funds available under section 204(d) shall be used by the 
Governor to provide services on an equitable basis throughout the State, 
taking into account the relative share of the population of eligible 
older individuals residing in each SDA and the participation of such 
older individuals in the labor force.
    (c) Delivery of services. (1) Services to participants eligible 
under section 204(d) shall be delivered through agreements with SDA's, 
private industry councils, public agencies, private nonprofit 
organizations (including veterans organizations) and private-for-profit 
organizations.
    (2) Priority for delivery of services under this section shall be 
given to agencies and organizations which have a demonstrated 
effectiveness in providing training and employment services to such 
older individuals.
    (d) Eligibility. (1) Individuals provided services under section 
204(d) of the Act shall be economically disadvantaged, based on criteria 
applicable in the SDA in which they reside, and shall be age 55 or 
older. However, each program year not more than 10 percent of 
participants enrolled under section 204(d) may be individuals who are 
not economically disadvantaged but have serious barriers to employment 
as identified by the Governor and have been determined within the last 
12 months to meet the income eligibility requirements for title V of the 
Older Americans Act of 1965 (section 204(d)(5)(B)(i)).
    (2) The following criteria shall apply to joint programs for older 
workers.
    (i) In order to carry out a joint program with operators of programs 
under title V of the Older Americans Act, there shall be a written 
financial or non-financial agreement, or written joint program 
description when the entity which operates the JTPA and title V program 
are the same.
    (ii) Joint programs under this paragraph (d)(2) may include 
referrals between programs, co-enrollment and provision of services.
    (iii) Under agreements pursuant to this paragraph (d)(2), 
individuals eligible under title V of the Older Americans Act shall be 
deemed to satisfy the requirements of section 203(a)(2) of the Act 
(Older Americans Act, Pub. L. 103-171, section 510).
    (e) Applicable requirements. Except as provided in the Act, the 
provisions of title II-A shall apply to programs conducted under section 
204(d) (section 204(d)(6)).
    (f) The Governor shall make efforts to coordinate the delivery of 
services under section 204(d) with the delivery of services under title 
V of the Older Americans Act of 1965. Such coordination may include 
coenrollment, coordination of a continuum of services between this 
section and title V of the Older Americans Act and other appropriate 
linkages.
    (g) The Governor shall give consideration to assisting programs 
involving training for jobs in growth industries and jobs reflecting the 
use of new technological skills (section 204(d)(3)).



Sec. 628.325  Incentive grants, capacity building, and technical 
assistance.

    (a) Funds available to the Governor under sections 202(c)(1)(B) and 
262(c)(1)(B) of the Act shall be used to provide incentive grants to 
SDA's and for capacity building and technical assistance.
    (b) Incentive grants. (1) Not less than 67 percent of the funds 
available under sections 202(c)(1)(B) and 262(c)(1)(B) of

[[Page 240]]

the Act shall be used by the Governor to provide incentive grants for 
programs, except programs under section 204(d) of the Act, exceeding 
title II performance standards (section 106(b)(7)).
    (2) Incentive grant funds under this section shall be distributed by 
the Governor among SDA's within the State pursuant to section 106(b)(7) 
of the Act.
    (3) The Governor shall, as part of the annual statement of goals and 
objectives required by section 121(a)(1) of the Act, provide SDA's with 
the specific policies and procedures to implement section 106(b)(7) of 
the Act.
    (4) In a State which is the service delivery area, incentive grant 
funds shall be distributed in a manner determined by the Governor and 
described in the GCSSP. The Governor shall give consideration to 
recognizing the performance of service providers within the State.
    (5) SDA's should use incentive grant funds for capacity building and 
technical assistance activities and/or for the conduct of allowable 
Title II activities for eligible youth, eligible adults, or both, at the 
discretion of the SDA.
    (c) Capacity building and technical assistance. (1) Up to 33 percent 
of the funds available under sections 202(c)(1)(B) and 262(c)(1)(B) of 
the Act may be used by the Governor to provide capacity building and 
technical assistance efforts aimed at improving the competencies of the 
personnel who staff and administer JTPA including SDA's, service 
providers, State staff, private industry councils, other job training 
councils and related human service systems provided for in section 
205(a) of the Act.
    (2) In providing capacity building and technical assistance 
activities, the Governor shall:
    (i) Consult with SDA's concerning capacity building and technical 
assistance activities consistent with the process specified in the 
GCSSP;
    (ii) Ensure that the use of funds will assist front line staff 
providing services to participants by directing resources to SDA and 
service provider staff for capacity building efforts, building a 
statewide capacity building strategy based on an assessment of local 
capacity building needs developed in cooperation with the SDA's, and/or 
delivering training and technical assistance directly to the local 
level;
    (iii) Ensure that expenditures for the purchase of hardware/software 
are only for the development of Statewide communications and training 
mechanisms involving computer-based communication technologies that 
directly facilitate interaction with the National Capacity Building and 
Information Dissemination Network (National Network) described in 
section 453 of the Act and that facilitate the use of computer-based 
training techniques in capacity building and technical assistance 
activities;
    (iv) Ensure that State and local capacity building efforts are 
coordinated and integrated with the National Network, pursuant to 
sections 202(c)(3)(B) and 262(c)(3)(B) of the Act, and that materials 
developed with funds under this section are made available to be shared 
with other States, SDA's and the National Network. States and SDA's 
retain the flexibility to tailor Network products to their own needs 
and/or to produce and train on similar or related products when local 
circumstances so dictate and;
    (v) Provide technical assistance to service delivery areas failing 
to meet performance standards pursuant to section 106(j)(2) of the Act.
    (d) Cost sharing. (1) Cost sharing approaches are encouraged among 
States, SDA's and/or among other Federal, State, and local human service 
programs, including those listed in section 205(a) of the Act, in 
developing electronic communications, training mechanisms and/or 
contributing to the National Network.
    (2) All shared costs shall be allocated among the contributing 
funding sources on the basis of benefits received.



                 Subpart D_Local Service Delivery System



Sec. 628.400  Scope and purpose.

    This subpart sets forth requirements for the selection of service 
delivery areas, the establishment and responsibilities of the private 
industry council, and the selection of the SDA grant recipient and 
administrative entity.

[[Page 241]]

This subpart also contains the requirements for the local job training 
plan as well as the procedures for its review and approval by the State.



Sec. 628.405  Service delivery areas.

    (a)(1) The Governor, after receiving recommendations from the SJTCC, 
shall designate SDA's within the State in accordance with the provisions 
of section 101 of the Act.
    (2) SDA's may not be designated by the Governor more frequently than 
once every two years, and such designations shall be made to coincide 
with the two-year plan cycle for the GCSSP and local job training plans 
(i.e., the designation cannot be made for an off-year in this cycle).
    (3) Each request for designation as an SDA shall be submitted in a 
form and by a date established by the Governor. The procedures 
established by the Governor shall provide for the treatment of existing 
SDA's for the purposes of submitting SDA designation requests.
    (b)(1) The Governor shall approve SDA designation requests from 
entities with a population of 200,000 or more that satisfy the criteria 
specified in section 101(a)(4)(A) of the Act.
    (2) When there are competing applications under paragraph (b)(1) of 
this section for the same geographic area, the Governor shall designate 
the entity with the population closest to 200,000, if the remaining 
reduced area also continues to satisfy the criteria specified in section 
101(a)(4)(A) of the Act. The Governor shall offer to designate the 
remaining reduced area as an SDA as well.
    (3) When there are competing applications under paragraph (b)(1) of 
this section for the same geographic area and the designation of the 
entity with the population closest to 200,000 would have the effect of 
reducing the population of the competing entity to below a population of 
200,000, the Governor has the discretion to determine which request to 
honor.
    (d) The Governor may, in accordance with section 101(a)(4)(B) of the 
Act, approve a request to be a SDA from any unit, or contiguous units, 
of general local government, without regard to population, which serves 
a substantial portion of a labor market area. In making such 
designations, the Governor shall evaluate the degree to which a proposed 
service delivery area meets criteria established by the Governor which, 
at a minimum, shall include:
    (1) The capability to effectively deliver job training services;
    (2) The capacity to administer the job training program in 
accordance with the Act, applicable rules and regulations and State 
standards; and
    (3) The portion of a labor market to be served.
    (e) For the purposes of SDA designations under section 101(a)(4)(A) 
and (B) of the Act, the term ``substantial part'' and ``substantial 
portion'' of a labor market area shall be defined by the Governor, but 
shall not be less than 10% of the population of a labor market area.
    (f) All areas within the State shall be covered by designated SDA's. 
After honoring all requests for designation from eligible entities under 
section 101(a)(4)(A) of the Act, and making any qualified discretionary 
designations under section 101(a)(4)(B) of the Act, the Governor shall 
include uncovered areas in the State within other designated SDA's 
willing to accept them or within a State administered SDA.
    (g) Appeals. (1) Only an entity which meets the requirements of 
section 101(a)(4)(A) of the Act for designation as a service delivery 
area, but which has had its request to be an SDA denied, may appeal the 
Governor's denial of service delivery area designation to the Secretary 
of Labor.
    (2) Appeals made pursuant to paragraph (g)(1) of this section shall 
be submitted by certified mail, return receipt requested, to the 
Secretary, U.S. Department of Labor, Washington, DC 20210, Attention: 
ASET. A copy of the appeal shall simultaneously be provided to the 
Governor.
    (3) The Secretary shall not accept an appeal dated later than 30 
days after receipt of written notification of the denial from the 
Governor.
    (4) The appealing party shall explain why it believes the denial is 
contrary to the provisions of section 101 of the Act.

[[Page 242]]

    (5) The Secretary shall accept the appeal and make a decision only 
with regard to whether or not the denial is inconsistent with section 
101 of the Act. The Secretary may consider any comments submitted by the 
Governor. The Secretary shall make a final decision within 30 days after 
receipt of the appeal (section 101(a)(4)(C)).
    (6) The Secretary shall notify the Governor and the appellant in 
writing of the Secretary's decision.



Sec. 628.410  Private Industry Council.

    (a) Certification of the PIC. (1) The chief elected official(s) of 
the SDA shall establish and the Governor shall certify the private 
industry council (PIC) pursuant to section 102 of the Act.
    (2) The Governor shall review the certification of the PIC 
biennially, one year prior to the effective date of the 2-year SDA job 
training plan to the Governor. The Governor's review shall include:
    (i) The PIC composition, which shall be consistent with section 
102(a), (b), (c), and (d) of the Act and shall include the names of 
individuals nominated and their qualifications;
    (ii) The nomination process;
    (iii) The written agreement(s) among the appropriate chief elected 
official(s) and the PIC, including procedures for the development of the 
SDA job training plan and the selection of the grant recipient and 
administrative entity.
    (3) The chief elected official shall select labor representatives 
for the PIC from individuals recommended by recognized State and local 
labor federations. For purposes of this section, a labor federation is 
an alliance of two or more organized labor unions for the purpose of 
mutual support and action. An example of a recognized labor federation 
is the AFL-CIO.
    (b) Responsibilities of the PIC. Pursuant to section 103 of the Act, 
the PIC shall:
    (1) Provide policy and program guidance for all activities under the 
job training plan for the SDA;
    (2) In accordance with agreements negotiated with the appropriate 
chief elected official(s), determine the procedures for development of 
the job training plan and select the grant recipient and administrative 
entity for the SDA;
    (3) Independent oversight. As specified in subpart D of part 627 of 
this chapter, the PIC shall exercise independent oversight over programs 
and activities under the job training plan, which oversight shall not be 
circumscribed by agreements with the appropriate chief elected 
official(s) of the SDA;
    (4) Be a party to the designation of substate grantees under title 
III, as set forth in Sec. 631.35 of this chapter;
    (5) Establish guidelines for the level of skills to be provided in 
occupational skills training programs funded by the administrative 
entity;
    (6) Consult with the Governor on agreements to provide services for 
older individuals under section 204(d) of the Act;
    (7) Establish youth and adult competency levels consistent with 
performance standards established by the Secretary, based on such 
factors as entry level skills and other hiring requirements, in 
consultation with educational agencies and, where appropriate, with 
representatives of business, organized labor and community-based 
organizations pursuant to section 106(b)(5) and 107(d); and
    (8) Identify occupations for which there is a demand in the area 
served.
    (c) Substate plan. The PIC shall be provided the opportunity to 
review and comment on a substate grantee plan under title III of the Act 
prior to the submission of such plan to the Governor (section 313(a)).
    (d) [Reserved]
    (e) The State Employment Service agency shall develop jointly with 
each appropriate PIC and chief elected official(s) for the SDA those 
components of the plans required under the Wagner-Peyser Act which are 
applicable to the SDA. (See part 652 of this chapter).
    (f) Single SDA States. (1) In any case in which the service delivery 
area is a State, the SJTCC or a portion of the SJTCC may be 
reconstituted as a PIC if the PIC meets the requirements of section 
102(a) of the Act.
    (2) When the service delivery area is a State and the functions of 
the SJTCC are embodied in the HRIC, the HRIC or a portion of the HRIC 
may be reconstituted as a PIC if the requirements for

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private sector business representation at section 102(a)(1) of the Act 
are met (section 102(h)).



Sec. 628.415  Selection of SDA grant recipient and administrative entity.

    (a) Selection of SDA grant recipient. (1) The SDA grant recipient 
and the entity to administer the SDA's job training plan for title II, 
developed pursuant to section 104 of the Act, shall be selected by 
agreement of the PIC and chief elected official(s) of the SDA. These may 
be the same or different entities.
    (2) The specific functions and responsibilities of the entities 
described in paragraph (a)(1) of this section shall be spelled out in 
the agreement between the PIC and the chief elected official(s), and 
shall specifically address the provisions of section 141(i) of the Act 
(section 103(b)(1)).
    (b) Subrecipient requirements. (1) The Governor may establish 
requirements pertaining to subrecipient, including SDA grant recipient, 
responsibility for JTPA funds.
    (2) The requirements of paragraph (b)(1) of this section shall not 
preclude the selection of any entity identified in section 103(b) of the 
Act as SDA grant recipient.



Sec. 628.420  Job training plan.

    (a) The Governor shall issue instructions and schedules to assure 
that job training plans and plan modifications for SDA's within the 
State conform to all requirements of the Act.
    (b) The Governor's instructions for development of the SDA's job 
training plan shall require that the plan contain the following 
information:
    (1) A complete and detailed discussion of the elements found in 
section 104(b) of the Act, including goals for the training and training 
related placement of women in nontraditional employment and 
apprenticeships;
    (2) A discussion of the SDA's compliance with the Secretary's 
program goals, as outlined in the planning guidance provided to the 
Governor; and
    (3) An oversight plan for the SDA which includes: (i) A description 
of the oversight activities of the PIC and the chief elected 
official(s), and (ii) the SDA administrative entity's monitoring plan 
which includes the Governor's monitoring requirements for service 
providers.
    (c) The Governor may also require that the SDA job training plan 
contain a capacity building and technical assistance strategy that 
includes plans for designating capacity building as a staff function, 
assessing local capacity building needs, and developing and 
participating in computerized communication mechanisms.
    (d) The SDA job training plan shall be jointly approved and jointly 
submitted to the Governor by the PIC and the chief elected official(s) 
(section 103(d)).
    (e) Modifications. (1) Any major modification to the SDA job 
training plan shall be jointly approved and jointly submitted by the PIC 
and chief elected official(s) of the SDA to the Governor for approval.
    (2) For the purposes of this section, the circumstances which 
constitute a ``major'' modification shall be specified by the Governor.



Sec. 628.425  Review and approval.

    (a) Standards and procedures. The Governor shall establish standards 
and procedures for the review and approval or disapproval of the SDA job 
training plan and plan modifications that shall be provided to the SDA's 
at the same time as the instructions and schedules for preparation of 
the plans are provided.
    (b) Plan approval. Except when the Governor makes a finding under 
the provisions of section 105(b)(1) of the Act, the Governor shall 
approve the SDA job training plan or plan modification. The notice of 
approval shall be provided in writing to the chief elected official(s) 
and to the private industry council.



Sec. 628.426  Disapproval or revocation of the plan.

    (a) If the Governor disapproves the SDA job training plan or plan 
modification for any reason, the Governor shall notify the PIC and chief 
elected official(s) for the SDA in writing as provided in section 
105(b)(2) of the Act.
    (b) If the Governor disapproves the SDA job training plan or plan 
modification, the Governor shall provide the PIC and the chief elected 
official(s) for

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the SDA 30 days to correct the deficiencies and resubmit the plan or 
plan modification. Within 15 days after the plan or plan modification is 
resubmitted, the Governor shall make a final decision and shall notify 
the PIC and the appropriate chief elected official(s) of the SDA in 
writing of the final disapproval or approval.
    (c) Governor mediation. If the PIC and the appropriate chief elected 
official(s) of an SDA are unable to reach an agreement under the 
provisions of section 103 (b)(1) or (d) of the Act, any such party may 
request the Governor to mediate.
    (d) Failure to reach agreement. If the PIC and the chief elected 
official(s) fail to reach the required agreements in section 103 (b)(1) 
or (d) of the Act, funds may not be made available to an SDA under 
section 104 of the Act and the Governor shall merge the affected area 
into one or more other existing service delivery areas (section 
105(c)(1)).
    (e) Appeals. (1) In accordance with section 105(b)(2) of the Act, 
any final disapproval by the Governor of the SDA job training plan or 
modification may be appealed by the PIC and chief elected official(s) of 
the SDA to the Secretary.
    (2) The Secretary shall not accept an appeal dated later than 30 
days after receipt by the PIC and chief elected official(s) of the final 
disapproval of the SDA job training plan or modification from the 
Governor.
    (3) The Secretary shall accept an appeal under paragraph (e)(1) of 
this section and shall determine only whether the disapproval is clearly 
erroneous under section 105(b)(1) of the Act. The Secretary may consider 
any comments submitted by the Governor. In accordance with section 
105(b)(2) of the Act, the Secretary shall make a final decision within 
45 days after the appeal is received by the Secretary.
    (4) The Secretary shall notify the Governor and the appellant in 
writing of the Secretary's decision.
    (f) Appeals of plan revocations. Pursuant to section 164(b)(1) of 
the Act, a notice of intent to revoke approval of all or part of a plan 
may be appealed to the Secretary. Such appeals shall be treated as a 
disapproval under paragraphs (c) and (e) of this section, except that 
the revocation shall not become effective until the later of:
    (1) The time for appeal under paragraph (e) of this section has 
expired; or
    (2) The date on which the Secretary issues a decision affirming the 
revocation.
    (g) In the event that a plan is disapproved and the Governor's 
decision is upheld upon appeal, the Governor shall merge the affected 
area into other designated SDA's willing to accept it or include it in 
another SDA within the State.



Sec. 628.430  State SDA Submission.

    (a) Pursuant to section 105(d) of the Act, when the SDA is the 
State, the Governor shall submit to the Secretary, not less that 60 days 
before the beginning of the first of the two program years covered by 
the job training plan and in accordance with instructions issued by the 
Secretary, an SDA job training plan covering two program years. When the 
SDA is the State, modifications to the plan shall be submitted to the 
Secretary for approval.
    (b) When a State submits an SDA job training plan or plan 
modification pursuant to paragraph (a) of this section, the Secretary 
shall review the plan or plan modification for overall compliance with 
the provisions of the Act. The State's plan shall be considered approved 
unless, within 45 days of receipt of the submission described in 
paragraph (a) of this section, the Secretary notifies the Governor in 
writing of inconsistencies between the submission and requirements of 
specific provisions of the Act. If the plan or plan modification is 
disapproved, the Governor may appeal the decision by requesting a 
hearing before an administrative law judge pursuant to subpart H of part 
627 of this chapter.



Subpart E_Program Design Requirements for Programs Under Title II of the 
                      Job Training Partnership Act



Sec. 628.500  Scope and purpose.

    This subpart contains the regulations pertaining to the program 
design requirements common to all programs conducted under titles I 
(i.e., sections

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121 and 123) and II of the Act. Regulations specifically pertaining to 
the Adult Program can be found in subpart F of this part. Regulations 
pertaining to the Summer Youth Employment and Training Program can be 
found in subpart G of this part. Regulations pertaining to the Youth 
Training Program can be found in subpart H of this part.



Sec. 628.505  Eligibility.

    (a) Eligibility criteria. (1) Individuals who apply to participate 
in a program under title II shall be evaluated for eligibility based on 
age and economic disadvantage. Specific eligibility criteria for 
programs under title II, parts A, B, and C are described in this part.
    (2) Individuals served under title II shall be residents of the SDA, 
as determined by local government policy, except for the limited 
exceptions described in the job training plan, including joint programs 
operated by SDA's (section 141(e)).
    (b) Eligibility documentation. (1) In order to promote the uniform 
and standard application of eligibility criteria for participation in 
the JTPA program, the Department has issued an Eligibility Documentation 
TAG that provides guidance on acceptable documentation.
    (2) SDA utilization of eligibility guidance. When it is determined 
that the SDA or service provider has followed the guidance contained in 
the Eligibility Documentation TAG, the Grant Officer will not disallow 
questioned costs related to the required documentation concerning an 
individual's eligibility.



Sec. 628.510  Intake, referrals and targeting.

    (a) Collection of personal data. In addition to determining an 
applicant's eligibility, the intake process shall include a preliminary 
review of information relating to whether an applicant is included in 
one or more of the categories listed in section 203(b) of the Act.
    (b) Information on services. Upon application, an eligible 
individual shall be provided information by the SDA or its service 
providers on the full array of services available through the SDA and 
its service providers, including information for women about the 
opportunities for nontraditional training and employment.
    (c) Assessment during intake. Some limited assessment activities may 
be conducted during the intake process in order to determine an eligible 
applicant's suitability for title II program services. This assessment 
should be a method, in difficult cases, to finalize determinations for 
enrollment. The amount of assessment provided during intake is not 
restricted, however, assessment during intake shall be charged in 
accordance with Sec. 627.440(d)(3).
    (d) Referral of eligible applicants. During the intake process, 
determinations may be made prior to enrollment to refer an eligible 
applicant to another human service, training or education program deemed 
more suitable for the individual, including the Job Corps program. In 
these cases, information on the full array of services available in the 
SDA may be provided in written form with recommendations and written 
referrals to other appropriate programs. Copies of or notations of 
referrals will be maintained as documentation and may be recorded in an 
incomplete ISS. Further tracking or follow-up of referrals out of title 
II is not required.
    (e) Referrals from service providers to service delivery areas for 
additional assessment. (1) Each service provider shall ensure that an 
eligible applicant who cannot be served by its particular program shall 
be referred to the SDA for assessment, as necessary, and suitable 
referral to other appropriate programs. Each service provider shall also 
ensure that a participant who cannot be served by its particular program 
shall be referred to the SDA for further assessment, as necessary, and 
suitable referral to other appropriate programs, consistent with Sec. 
628.515.
    (2) Each SDA shall take the appropriate steps (e.g., contract 
provisions, local administrative issuances, and/or PIC policies) to 
ensure that its service providers adhere to the provisions of this 
section and that they maintain documentation of referrals.
    (3) Each SDA shall develop an appropriate mechanism to ensure 
suitability screening for eligible applicants or to

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apply the provisions of Sec. 628.530 for participants referred by 
service providers and describe such mechanism in its SDA job training 
plan.
    (f)(1) ``Most in need.'' SDA's that satisfy the requirements of 
sections 203(b) and 263 (b) and (d) pertaining to hard to serve 
individuals shall be deemed to meet the ``most in need'' criteria at 
section 141(a) of the Act.
    (2) The requirements referred to in paragraph (h)(1) of this section 
shall be calculated on the basis of new participants for whom services 
or training have been provided subsequent to the objective assessment.
    (g) The SDA's method of meeting the requirements of sections 203(b) 
and 263(b) pertaining to hard to serve individuals shall be implemented 
consistent with the equal opportunity provisions of 29 CFR part 34.



Sec. 628.515  Objective assessment.

    (a) General. The requirements of this section shall apply to 
programs conducted under title I (i.e., sections 121 and 123) and title 
II, parts A, B, and C.
    (b) Definition. (1) For purposes of this part, an objective 
assessment means an examination of the capabilities, needs, and 
vocational potential of a participant and is to be used to develop an 
individual service strategy and employment goal. Such assessment is 
customer-centered and a diagnostic evaluation of a participant's 
employment barriers taking into account the participant's family 
situation, work history, education, basic and occupational skills, 
interests, aptitudes (including interests and aptitudes for 
nontraditional occupations), attitude towards work, motivation, behavior 
patterns affecting employment potential, financial resources and needs, 
supportive service needs, and personal employment information as it 
relates to the local labor market.
    (2) For the program under title II-B, the objective assessment shall 
include an examination of the basic skills and supportive service needs 
of each participant and may include the other areas listed in paragraph 
(b)(1) of this section (sections 204(a)(1)(A), 253(c)(1) and 
264(b)(1)(A)).
    (c) Methods of objective assessment. (1) The SDA shall choose the 
most appropriate means to measure skills, abilities, attitudes, and 
interests of the participants. The methods used in conducting the 
objective assessment may include, but are not limited to, structured 
interviews, paper and pencil tests, performance tests (e.g., skills, 
and/or work samples, including those that measure interest and 
capability to train in nontraditional employment), behavioral 
observations, interest and/or attitude inventories, career guidance 
instruments, aptitude tests, and basic skills tests.
    (2) Instruments used for objective assessment may be developed at 
the local level; however, any formalized instruments nationally 
available should be used only for the specific populations for which 
they are normed.
    (d) Updating of assessments. Objective assessment should be treated 
as an ongoing process. As additional relevant information relating to a 
participant becomes available, it should be reviewed and considered for 
inclusion in the individual service strategy.
    (e) Other sources of objective assessment. Other non-JTPA 
assessments (e.g., through the Job Opportunities and Basic Skills (JOBS) 
program under title IV of the Social Security Act, or through schools) 
which have been completed within one year of application for services, 
and which meet the requirements of this section, may be used to comply 
with the requirement to assess each participant.



Sec. 628.520  Individual service strategy.

    (a) General. The requirements of this section shall apply to 
programs conducted under title I (i.e., sections 121 and 123) and title 
II, parts A, B and C.
    (b) Definition. (1) Individual service strategy (ISS) means an 
individual plan for a participant, which shall include an employment 
goal (including, for women, consideration of nontraditional employment), 
appropriate achievement objectives, and the appropriate combination of 
services for the participant based on the objective assessment conducted 
pursuant to Sec. 628.515 of this part, Objective assessment. In 
developing the ISS, the participant shall be counseled regarding

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required loan repayments if the participant chooses to incur personal 
indebtedness to participate in an education program. The participant 
shall also be apprised of the requirements for self-sufficiency and the 
occupational demands within the labor market.
    (2) Decisions concerning appropriate services shall be customer-
centered, and ensure that the participant is not excluded from training 
or career options consistent with the provisions of 29 CFR part 34 
concerning nondiscrimination and equal opportunity.
    (3) For the title II-B program, the ISS may include the components 
specified in paragraph (b)(1) of this section (sections 204(a)(1)(B), 
253(c)(2) and 264(b)(1)(B)). For purposes of titles II-B and II-C, the 
employment goal may be interpreted broadly and based on long-term career 
guidance.
    (c) Joint Development of ISS. The ISS shall be developed in 
partnership with the participant and reflect the needs indicated by the 
objective assessment and the expressed interests and desires of the 
participant. It is not a formal contract and signatures are not a 
requirement.
    (d) Review of ISS. The ISS shall be reviewed periodically to 
evaluate the progress of each participant in meeting the objectives of 
the service strategy, including an evaluation of the participant's 
progress in acquiring basic skills, and occupational skills, as 
appropriate, and the adequacy of the supportive services provided.
    (e) Provision of services. If JTPA resources are not sufficient to 
provide the full range of training or supportive services which might be 
identified in the ISS, the SDA shall make every reasonable effort to 
arrange for, through other community resources, basic and occupational 
skills training and supportive services identified as needed in the ISS 
for participants under titles II-A and II-C and, in addition, 
preemployment and work maturity skills training and work experience 
combined with skills training for participants under title II-C 
(sections 204(a)(1)(D) and 264(b)(1)(D).
    (f) SDA review of objective assessment and ISS. (1) The objective 
assessment and development of the ISS may be conducted by service 
providers.
    (2) The SDA administrative entity shall ensure that development of 
the ISS and the services provided, respond to the individual needs of 
the participant and that the combination of services to the participant 
is indicated by the results of th