[Federal Register Volume 66, Number 219 (Tuesday, November 13, 2001)]
[Rules and Regulations]
[Pages 56960-56962]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-28412]



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Part III





Department of Labor





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Employment and Training Administration



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20 CFR Part 625



Disaster Unemployment Assistance Program; Request for Comments; Interim 
Final Rule

  Federal Register / Vol. 66, No. 219 / Tuesday, November 13, 2001 / 
Rules and Regulations  

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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 625

RIN 1205-AB31


Disaster Unemployment Assistance Program; Interim Final Rule; 
Request for Comments

AGENCY: Employment and Training Administration, Department of Labor.

ACTION: Interim final rule; request for comments.

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SUMMARY: The Employment and Training Administration (ETA) of the 
Department of Labor (Department) is issuing this interim final rule, 
effective upon publication, to clarify eligibility for disaster 
unemployment assistance (DUA) in the wake of the major disasters 
declared as a result of the terrorist attacks of September 11, 2001. To 
provide an opportunity for public participation in this emergency 
rulemaking, this interim final rule includes a post-publication comment 
period. The Department will publish a final rule after taking into 
account any comments that are received.

DATES: This interim final rule is effective November 13, 2001. Written 
comments must be received in the Department on or before December 13, 
2001.

ADDRESSES: Written comments on this interim final rule may be mailed or 
delivered to Grace A. Kilbane, Director, Office of Workforce Security, 
Employment and Training Administration, U.S. Department of Labor, 200 
Constitution Avenue, N.W., Room S-4231, Washington, DC 20210.
    All comments received will be available for public inspection 
during normal business hours in Room S-4231 at the above address.

FOR FURTHER INFORMATION CONTACT: Betty Castillo, Division Chief, 
Division of Unemployment Insurance Operations, Office of Workforce 
Security, Employment and Training Administration (ETA), U.S. Department 
of Labor, 200 Constitution Avenue, N.W., Room S-4231, Washington, DC 
20210. Telephone: (202) 693-3209 (this is not a toll-free member); 
facsimile: (202) 693-3229; E-mail: [email protected].

SUPPLEMENTARY INFORMATION:

I. The Disaster Unemployment Assistance Program

    Section 410(a) of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (Stafford Act) (42 U.S.C 5177(a)) sets forth 
the framework of the Disaster Unemployment Assistance (DUA) Program. 
The President is authorized by section 410(a) of the Stafford Act to 
provide to any individual unemployed as a result of a major disaster 
declared by the President under the Stafford Act ``such benefit 
assistance as he deems appropriate while such individual is unemployed 
for the weeks of such unemployment with respect to which the individual 
is not entitled to any other unemployment compensation * * * or waiting 
period credit.'' Section 410(a) provides that DUA is to be furnished to 
individuals for no longer than 26 weeks after the major disaster is 
declared. Further, for any week of unemployment, a DUA payment (a type 
of unemployment compensation (UC)) is not to exceed the maximum weekly 
benefit amount authorized under the applicable UC state law, as 
specified in the Department's DUA regulations implementing section 
410(a) of the Act.
    The Department operates the DUA program under a delegation of 
authority (51 FR 4988, February 10, 1986) to the Secretary of Labor 
from the Director of the Federal Emergency Management Agency (FEMA). 
The Secretary of Labor has promulgated and published regulations for 
the DUA program at part 625 of title 20 of the Code of Federal 
Regulations. The DUA Program is administered by the states in 
accordance with an agreement each state has signed with the Secretary 
of Labor.

II. Explanation of the Interim Final Rule

    The Department is adding, at Sec. 625.5(c), a definition of the 
phrase ``unemployment is a direct result of the major disaster,'' used 
in Secs. 625.5(a)(1) an (b)(1) for determining if a worker or self-
employed individual's unemployment is caused by a major disaster. 
Section 410(a) of the Stafford Act provides, in pertinent part, that 
the President is authorized to provide benefit assistance to any 
individual ``unemployed as a result of a major disaster.'' The 
Department has consistently interpreted this phrase in its regulations 
as requiring, for DUA eligibility, that the individual's ``unemployment 
is a direct result of the major disaster.'' However, the phrase has 
never been defined in the Department's regulations. (Note that 
paragraphs (a)(2)-(a)(5) and (b)(2)-(b)(4) of Sec. 625.5 also provide 
for other circumstances where an individual's unemployment is caused by 
a major disaster. However, these provisions are not involved here.)
    The recent terrorist attacks of September 11, 2001, resulting in 
declarations of major disasters in New York City and Arlington County, 
Virginia, were of catastrophic proportions. They presented a number of 
situations the regulations did not contemplate, such as the extended 
closure of Reagan National Airport. In order to address these types of 
situations, the Department is now defining the phrase ``unemployment is 
a direct result of the major disaster'' to clarify eligibility. The 
Department has received many inquiries regarding whether an 
individual's unemployment was a direct result of either the New York or 
Arlington disasters. By defining the phrase ``unemployment is a direct 
result of the major disaster,'' the Department will ensure greater 
uniformity. This is consistent with the first and second rules of 
construction of Secs. 625.1(b) and (c) of the DUA regulations, which 
provide that sections 410 and 423 of the Stafford Act and the 
implementing regulations must be construed liberally to carry out the 
purposes of the Act and to assure, insofar as possible, the uniform 
interpretation and application of the DUA provisions of the Act 
throughout the United States.

Definition of ``Unemployment is a Direct Result of the Major Disaster''

    The Department interprets the phrase ``unemployment is a direct 
result of the major disaster'' under paragraphs (a)(1) and (b)(1) of 
Sec. 625.5 to mean that an individual's unemployment must be an 
immediate result of the disaster itself, and not the result of a longer 
chain of events precipitated or exacerbated by the major disaster. This 
rule seeks to clarify that an individual's unemployment is a direct 
result of the major disaster if the unemployment resulted from: the 
physical damage or destruction of the work site; the physical 
inaccessibility of the work site due to a federal government closure of 
the work site, in immediate response to the major disaster; or lack of 
work, or loss of revenues, provided that the employer, or the business 
in the case of a self-employed individual, prior to the disaster, 
received at least a majority of its revenue or income from either an 
entity damaged or destroyed in the disaster, or an entity closed by the 
federal government in immediate response to the disaster. This rule 
simply sets forth whose unemployment is a direct result of a major 
disaster. Once that determination is made, however, claimants covered 
under this new definition must still meet the same

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eligibility criteria as all other claimants in order to receive DUA.
    The Department recognizes that the terrorist attacks of September 
11 had a ``ripple effect'' throughout the economy, and that many 
businesses nationwide suffered serious declines due to the effect these 
disasters had on commerce. However, individuals who became unemployed 
as the result of a general decline in commerce in response to the major 
disasters are not unemployed as a ``direct result'' of the major 
disasters and thus are not eligible for DUA.
    The above considerations apply equally to any major disaster. They 
lead the Department to conclude that workers and self-employed 
individuals whose work site, for example, is outside a major disaster 
area, and who no longer have a job because the federal government 
either closed or took over the job site in response to the major 
disaster, are potentially eligible for DUA. This includes only 
employees and self-employed individuals at facilities closed by the 
federal government. Examples of eligible individuals in the case of an 
airport shutdown might include airport employees, owners and employees 
of restaurants and shops located in airport terminal buildings, and 
workers or service providers for these and other facilities where the 
above conditions are met. However, workers at other airports not closed 
by the federal government would not be eligible for DUA. Individuals 
potentially eligible for DUA would also include employees and self-
employed individuals who could not perform services or get to their 
workplace because a federal agency, such as FEMA, took over such site 
for disaster administration purposes. Similarly, the federal government 
may, as an immediate emergency response to the major disaster, close 
certain facilities such as bridges or tunnels. Employees of those 
facilities could, therefore, be potentially eligible for DUA.
    As noted above, an employee or self-employed individual may be 
eligible for DUA if the major disaster caused physical damage or 
destruction of an entity which, before the major disaster, provided at 
least a majority of the employer's or self-employed individual's 
revenue or income. Where less than a majority of the employer's or 
self-employed individual's revenue or income came from that entity, the 
link to the unemployment is too tenuous to be considered direct under 
the regulations. Just as this test may be employed to determine whether 
employees of suppliers of goods or services to facilities physically 
damaged by the major disaster may be eligible for DUA, so too would 
that analysis be applicable to employees of suppliers of goods or 
services to other facilities closed or taken over by the federal 
government in immediate response to the major disaster. Thus, if one of 
those facilities provided at least a majority of the revenue or income 
of that employer or self-employed individual, the employees of that 
business or that self-employed individual may be eligible for DUA.
    Where it cannot be established that at least a majority of the 
revenue or income of a business or self-employed individual was 
dependent upon providing goods or services to the businesses at these 
facilities, DUA eligibility must be denied. For example, a taxicab 
driver would be potentially eligible for DUA where a majority of his or 
her business depended on providing transportation services between 
points which include areas cordoned off because of the physical damage 
of the major disaster or because facilities were closed or commandeered 
by the federal government. On the other hand, DUA eligibility must be 
denied a taxicab driver who cannot establish that a majority of his or 
her livelihood depended on providing transportation services between 
points which include areas cordoned off because of either the physical 
damage of the major disaster or the closing or commandeering of the 
facilities by the federal government.
    Further, DUA is payable only for those weeks of unemployment during 
the disaster assistance period that continues to be the direct result 
of the major disaster. Therefore, if the state agency finds that an 
eligible DUA applicant's unemployment can no longer be directly 
attributed to the major disaster, the applicant is no longer unemployed 
as a direct result of the disaster and is no longer eligible for DUA.

Publication of Interim Final Rule

    This rule interprets the statutory term in section 410(a) of the 
Stafford Act requiring, as a condition of DUA eligibility, that an 
individual be unemployed as a ``result'' of a major disaster. The 
Department has determined that the new Sec. 625.5(c) defining this 
statutory term, should be added immediately to clarify eligibility and 
assure uniform interpretation and application nationwide. Notice-and-
comment rulemaking is not required under 5 U.S.C. 553(b)(A) because the 
rule is interpretative. However, because of the public interest in this 
program, the Department has included a post-publication comment period 
in this interim final rule. Any comments received on the interim final 
rule adding Sec. 625.5(c) will be considered before a final rule is 
issued.
    Even were this not an interpretative rule, good cause, under 5 
U.S.C. 553(b)(B), exists for adding Sec. 625.5(c) in an interim final 
rule with a post-publication comment period because a pre-publication 
comment period is impracticable and contrary to the public interest. 
Communities are still recovering and individuals are filing claims due 
to the major disasters arising from the terrorist attacks of September 
11, 2001. To not have the regulations in place at this time would be 
contrary to the public interest, especially under the current 
exigencies. Because of the scope of the effects of this disaster, this 
clarification will effect claims made through many States. In order to 
assure that all States will be able to respond as promptly and 
accurately as possible to this disaster, this regulation must be 
effective immediately.

Effective Date

    The Department has determined that this interim final rule will be 
effective on publication. This rule clarifies which unemployed workers 
about whom eligibility questions have arisen are potentially eligible 
for DUA benefits. The exception to a 30-day delay in the effective date 
at 5 U.S.C. 553(d)(1) applies because the rule clarifies a statutory 
term which has the effect of relieving a restriction on the eligibility 
of individuals to receive benefits under the DUA Program.
    Moreover, this rule interprets the statutory term unemployed as a 
``result'' of a major disaster in section 410(a) of the Stafford Act. 
Therefore, under 5 U.S.C. 553(d)(2), a 30-day waiting period for the 
rule to become effective is not required because this is an 
interpretative rule.
    Lastly, the Department has determined, under 5 U.S.C. 553(d)(3), 
that good cause exists for making the addition of Sec. 625.5(c) 
effective upon publication in the Federal Register. As explained above, 
due to the exigencies arising from the events of September 11, 2001, 
the Department believes it contrary to the public interest and harmful 
to potential beneficiaries not to have the changes in place while so 
many individuals are recovering from those major disasters. Therefore, 
these amendments are effective immediately.

Executive Order 12866

    This interim final rule is a ``significant regulatory action'' 
within the meaning of Executive Order 12866 because it meets the 
criteria of section 3(f)(4) of that Order in that it raises

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novel or legal policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in the Executive 
Order. Accordingly, this rule was submitted to, and reviewed by, the 
Office of Management and Budget. It is not ``economically significant'' 
within the meaning of section 3(f)(1) of that Executive Order because 
it will not have an annual effect on the economy of $100 million or 
more. Rather, the Department estimates the cost of benefits under this 
rule for the major disasters of September 11, 2001, to be $1.47 million 
and, therefore, projects that the annual cost of benefits under this 
rule will be far less than $100 million.
    The Department has evaluated the rule and finds it consistent with 
the regulatory philosophy and principles set forth in Executive Order 
12866, which governs agency rulemaking. The rule will not impact states 
and state agencies in a material way because it would not impose any 
new requirements on states. Instead, the rule simply clarifies the 
rules states use to determine the eligibility of individuals affected 
by these new types of disasters now affecting the nation, such as the 
terrorist attacks of September 11, 2001, and the benefits are financed 
by the federal government.

Paperwork Reduction Act

    The Department has determined that this interim final rule contains 
no new information collection requirements. The existing information 
collection requirements are approved under Office of Management and 
Budget control number 1205-0051.

Executive Order 13132

    The Department has reviewed this interim final rule in accordance 
with Executive Order 13132 regarding federalism. The order requires 
that agencies, to the extent possible, refrain from limiting state 
policy options, consult with states prior to taking any actions which 
would restrict states' policy options, and take such action only when 
there is clear constitutional authority and the presence of a problem 
of national scope. Because this is a federal benefit program, the 
Department has determined that the rule does not have federalism 
implications.

Executive Order 12988

    The Department drafted and reviewed this rule in accordance with 
Executive Order 12988, Civil Justice Reform, and will not unduly burden 
the federal court system. The rule has been written to minimize 
litigation and provide a clear legal standard for affected conduct, and 
has been reviewed carefully to eliminate drafting errors and 
ambiguities.

Unfunded Mandates Reform Act of 1995 and Executive Order 12875

    The Department has reviewed this interim final rule in accordance 
with the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1501 et 
seq.) and Executive Order 12875. The Department has determined that 
this rule does not include any federal mandate that may result in 
increased expenditures by state, local, or tribal governments, in the 
aggregate, or by the private sector, of $100 million or more in any one 
year. Accordingly, the Department has not prepared a budgetary impact 
statement.

Regulatory Flexibility Act

    The Department has determined that this interim final rule will not 
have a significant economic impact on a substantial number of small 
entities. The rule sets forth the terms under which states and state 
agencies, which are not within the definition of ``small entity'' under 
5 U.S.C. 601(6), will pay federal benefits. Under 5 U.S.C. 605(b), the 
Secretary has certified to the Chief Counsel for Advocacy of the Small 
Business Administration to this effect. Accordingly, no regulatory 
flexibility analysis is required.

Effect on Family Life

    The Department certifies that this interim final rule has been 
assessed in accordance with section 654 of Pub. L. 105-277, 112 Stat. 
2681, for its effect on family well-being. The Department concludes 
that the rule will not adversely affect the well-being of the nation's 
families. Rather, it should have a positive effect on family well-being 
by providing benefits to more individuals whose households have been 
affected by major disasters.

Congressional Review Act

    This interim final rule is not a major rule for purposes of the 
Congressional Review Act.

Catalogue of Federal Domestic Assistance Number

    This program is listed in the Catalogue of Federal Domestic 
Assistance at No. 17.225, ``Disaster Unemployment Assistance (DUA).''

List of Subjects in 20 CFR Part 625

    Disaster assistance, Labor, and Unemployment compensation.

Words of Issuance

    For the reasons set forth in this preamble, part 625 of chapter V 
of title 20, Code of Federal Regulations, is amended as follows:

PART 625--DISASTER UNEMPLOYMENT ASSISTANCE

    1. The authority for part 625 continues to read as follows:

    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).


    2. Section 625.5 is amended by adding a new paragraph (c) to read 
as follows:


Sec. 625.5  Unemployment caused by a 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 due to 
its closure by the federal 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 that was either damaged or destroyed in the disaster, or an 
entity closed by the federal government in immediate response to the 
disaster.

    Signed at Washington, D.C. on November 7, 2001.
Elaine L. Chao,
Secretary of Labor.
Emily S. DeRocco,
Assistant Secretary of Labor.
[FR Doc. 01-28412 Filed 11-9-01; 8:45 am]
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