[Federal Register Volume 67, Number 173 (Friday, September 6, 2002)]
[Notices]
[Pages 57066-57082]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-22385]



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Part II





Department of Labor





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Employment and Training Administration



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Workforce Security Programs: Unemployment Insurance Program Letter 
Interpreting Federal Law; Notice

  Federal Register / Vol. 67, No. 173 / Friday, September 6, 2002 / 
Notices  

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DEPARTMENT OF LABOR

Employment and Training Administration


Workforce Security Programs: Unemployment Insurance Program 
Letter Interpreting Federal Law

    The Employment and Training Administration interprets federal law 
requirements pertaining to unemployment compensation (UC). These 
interpretations are issued in Unemployment Insurance Program Letters 
(UIPLs) to State Workforce Agencies. The UIPL described below is 
published in the Federal Register in order to inform the public.

UIPL No. 30-02

    UIPL No. 30-02 and its attachment provides the states with the 
requirements of the Temporary Extended Unemployment Compensation (TEUC) 
Act of 2002 as operating instructions and responses to questions raised 
pertaining to the TEUC program. With minor clarifying modifications to 
the instructions, this document consolidates the previous instructions 
to states for the treatment of claims filed under the TEUC program.

    Dated: August 26, 2002.
Emily Stover DeRocco,
Assistant Secretary.
Employment and Training Administration, Advisory System, U. S. 
Department of Labor, Washington, DC 20210
    Classification: OWS.
    Correspondence Symbol: OIS/DUO.
    Date: July 5, 2002
    Advisory: Unemployment Insurance Program Letter No. 30-02.
    To: All State Workforce Agencies.
    From: Grace A. Kilbane, Administrator, Office of Workforce 
Security.
    Subject: Temporary Extended Unemployment Compensation (TEUC) Act of 
2002.
    1. Purpose. To provide State Workforce Agencies (SWAs) with a 
consolidated document of the instructions for implementing and 
operating the TEUC program, including fiscal and reporting instructions 
and to clarify certain matters.
    2. References. Title II of the Job Creation and Worker Assistance 
Act of 2002 (The Temporary Extended Unemployment Compensation Act of 
2002), Public Law 107-147, signed by the President on March 9, 2002; 
section 205 of the Federal-State Extended Unemployment Compensation Act 
of 1970, as amended; section 233 of the Trade Act of 1974; 20 CFR part 
615; ET Handbook No. 401; ET Handbook No. 410.
    3. Summary. The TEUC program provides up to 13 weeks of 100 percent 
federally financed benefits in all states and up to an additional 13 
weeks in states that are in an Extended Benefit (EB) period or would be 
in an EB period using a 4% insured unemployment rate trigger.
    TEUC is payable to individuals who (1) filed an initial (new or 
additional) claim that was effective during or after the week of March 
15, 2001; and (2) have exhausted regular benefits or have no benefit 
rights due to expiration of a benefit year ending during or after the 
week of March 15, 2001; and (3) have no rights to regular or extended 
benefits under any state or federal law; and (4) are not receiving 
benefits under Canadian law.
    Rescissions: UIPL 17-02; UIPL 17-02, Change 1; UIPL 18-02; UIPL 18-
02, Change 1.
    Expiration Date: Continuing.
    However, the Governor of a state may elect to pay TEUC in lieu of 
Extended Benefits.
    In general, in order to qualify for TEUC, individuals must have had 
employment of 20 weeks of work, or the equivalent in wages, in their 
base periods. Continuing eligibility is determined under the 
requirements of the state law.
    TEUC is administered through voluntary agreements between states 
and the Department of Labor. TEUC is payable in a state the week 
following the week in which an agreement is signed. The first week for 
which benefits may be paid is the week beginning March 10, 2002. The 
last week for which benefits are payable is the week ending December 
28, 2002 (December 29, 2002 for New York).
    SWAs are required to submit a separate financial status report 
(Standard Form 269) for administrative grants and costs associated with 
the Temporary Extended Unemployment Compensation (TEUC) program.
    4. Policy. This document furnishes information about the TEUC 
program and provides the Department's interpretation of the TEUC Act. 
It also sets forth operating instructions of the Department of Labor to 
guide states in implementing and administering the TEUC program.
    The instructions in this document are issued to the states and 
cooperating state agencies as guidance provided by the Department of 
Labor in its role as the principal in the TEUC program. As agents of 
the United States, the states and cooperating state agencies may not 
vary from the operating instructions in the document without the prior 
approval of the Department. The interpretations, policies, and 
procedures issued in this document supercede those previously issued as 
UIPL 17-02, UIPL 17-02, Change 1, UIPL 18-02 and UIPL 18-02, Change 1.
    5. Summary of Changes. This document contains the following changes 
to previously issued procedures:
--In section I, the last sentence of Section 206(c)(1) is corrected to 
include the 50 percent limitation on offsets.
--Section II, the definition of ``applicable benefit year'' has been 
clarified.
--Section IV.2(d) is changed to delete the requirement for the issuance 
of a Report of Determination of a Combined- Wage Claim (CWC), TC-IB5 
and quarterly CWC benefit charging to the transferring state. States 
were previously notified of this change in the Question and Answers.
--Section IV.6. is changed to clarify the distinction between the 
application of state law provisions for waiver of an overpayment and 
the application of the provisions of the optional TEUC waiver, and to 
clarify the optional TEUC waiver requirements.
--Section VI.4 is changed to reflect the Office of Management and 
Budget's (OMB) approval of the TEUC reporting instructions.
--Several Questions and Answers are modified to reflect the correct 
procedural reference only and one question and answer added pertaining 
to Additional Trade Readjustment Assistance benefits.
    6. Action Required. Administrators are requested to provide this 
information and instructions to the appropriate staff.
    7. Inquiries. Direct questions to the appropriate Regional Office.
    8. Attachment. Implementing and Operating Instructions for the TEUC 
Program

Temporary Extended Unemployment Compensation Act of 2002

Implementing and Operating Instructions for the TEUC Program

Introduction

Section I--Title II of Public Law 107-147

Section II--Definitions of Terms Used in this Document

1. Act
2. Additional Compensation
3. Agreement
4. Applicable Benefit Year
5. Applicable State
6. Applicable State Law

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7. Base Period
8. Benefit Year
9. Compensation
10 Extended Compensation
11. Regular Compensation
12. Secretary
13. State
14. State Agency
15. State Law
16. Temporary Extended Unemployment Compensation
17. TEUC First Tier
18. TEUC Second Tier
19. Week
20. Week of Unemployment

Section III--Procedures for Implementing TEUC

1. Beginning and Ending of the TEUC Program in a State
2. Notifications
a. Identification and Notification of Potential TEUC Claimants
b. Notification of the Media
3. Relationship of EB to TEUC
4. Effect of Additional Benefit Eligibility in the State
5. Eligibility for Temporary Extended Unemployment Compensation
a. Basic Eligibility Requirements
b. Determining Exhaustees
c. Applicability of State Law Provisions
d. Applicability of EB Provisions
e. Effect of Other UI-Related Programs on Eligibility for TEUC
(1) Trade Readjustment Allowances (TRA)
(2) Disaster Unemployment Assistance (DUA)
6. Establishment of TEUC Account
a. TEUC Maximum Benefit Amount
b. TEUC Second Tier (TEUC-X)
(2) Changes in an Individual's TEUC Account
7. TEUC Weekly Benefit Amount
a. Total Unemployment
b. Partial and Part-Total Unemployment
8. Record Maintenance and Disposal of Records
a. Record Maintenance
b. Disposal of Records
9. Disclosure of Information
10. Inviolate Rights to TEUC

Section IV--Processing Claims for TEUC

1. Applicability of State Law Provisions
2. Claims for TEUC
a. Intrastate Initial Claims
b. Interstate Initial Claims
c. Intrastate and Interstate Weeks Claimed
d. Combined Wage Claims
(1) Report of Determination of Combined-Wage Claim, TC-IB5
(2) Charging of TEUC to Transferring State
3. Secretary's Standard
4. Determination of Entitlement: Notices to Individual
a. Determination of Initial Claim
b. Determination of Weekly Claims
c. Redeterminations
d. Notices to Individual
e. Promptness
f. Secretary's Determination Standard
5. Appeal and Hearing
a. Applicable State Law
b. Rights of Appeal and Fair Hearing
c. Promptness of Appeals Decisions
6. Fraud and Overpayment
a. Fraudulent Claiming of TEUC
b. Overpayments
(1) Application of State Waiver Provision
(2) Optional TEUC Waiver
(3) Recovery of Overpayments

Section V--Fiscal Instructions

1. Payments to States
a. Requesting TEUC Benefit Funds
b. TEUC Administrative Funds
2. TEUC Reporting Instructions
a. Obligational Authority
b. Administrative Fund Accounting
c. Time Distribution
d. Accounting for TEUC Payments (Benefits)
3. Drawdown Instructions for TEUC
a. Processing Refunds

Section VI--Reporting Instructions

1. General
2. Data Items to be Reported
a. ETA 207
b. ETA 218
c. ETA 227
d. ETA 5130
e. ETA 5159
f. ETA 2112
g. ETA 539
h. UI-3 Worksheet
3. Notification of a Regular EB Trigger Under EUCA
4. OMB Approval

Section VII--Questions and Answers

1. Administrative
2. Claimants Potentially Eligible for TEUC
3. Applicable Benefit Year for TEUC Purposes
4. Monetary Eligibility
5. Base Period Employment Requirement
6. Seasonal Provisions/Between Terms Denial
7. TEUC-X Period Trigger
8. Work Search/Job Service Registration Requirements
9. Adjudication of Issues Arising Subsequent to Exhaustion
10. TEUC Benefit Intercept
11. Overpayments
12. Short-Time Compensation Program
13. Extensions for Approved Training
14. Self-Employment Assistance
15. TEUC Effect on Trade Readjustment Assistance (TRA)
16. Reporting Requirements
17. Interstate Benefits/Combined Wage/ICON Applications
18. Claims Filed by Aliens
19. Application of Worker Profiling and Reemployment Services (WPRS) 
to TEUC Individuals
20. TEUC Eligibility for Individual Filing From Canada
21. TEUC and Benefit Accuracy Measurement (BAM) Sampling

Introduction

    Title II of Public Law 107-147 is short-titled the ``Temporary 
Extended Unemployment Compensation Act of 2002'' and is referenced 
throughout this publication as the ``Act.''
    The Act creates a federally funded benefit extension, called 
Temporary Extended Unemployment Compensation (TEUC), which provides up 
to 26 weeks of benefits to exhaustees, as defined, who otherwise meet 
the requirements of the Act.
    Throughout these instructions various references are made to state 
laws pertaining to the payment of regular benefits by using such 
phrases as ``in accordance with'' or ``as required by'' or similar 
phrasing. In all cases such phrasing means law provisions as they apply 
to the determination and payment of regular benefits.
    These instructions reference sections of the Federal-State Extended 
Unemployment Compensation Act of 1970 by using such phrases as ``in 
accordance with'' or ``as required by'' or similar phrasing. In all 
cases such phrasing mean state law provisions that are ``in accordance 
with'' or ``as required by'' the specific provisions of the Federal-
State Extended Unemployment Compensation Act of 1970, as implemented by 
20 CFR part 615.

Section I--Title II of Public Law 107-147

    Title II of Pub. L. 107-147 may be found at http://www.access.gpo.gov.

Section II--Definition of Terms Used Throughout This Document

    This section contains the definitions of terms used throughout this 
document. To the extent possible, these definitions follow the EB 
regulations found at 20 CFR 615.2 as required by section 207 of the Act 
regarding these terms listed there. References to 5 U.S.C. Chapter 85 
are to the UCFE/UCX law.
    1. ``Act'' means the Temporary Unemployment Compensation Act of 
2001, Title VII, Public Law 107-147.
    2. ``Additional Compensation'' means compensation totally financed 
by a state under its 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. ``Agreement'' means the agreement entered into pursuant to the 
Act between a state and the Department of Labor, under which the state 
agency makes payments of TEUC in accordance with the Act as interpreted 
by the Secretary or the Department of Labor as set forth in these 
instructions or other instructions issued by the Department.
    4. ``Applicable Benefit Year'' means, the current benefit year, 
with respect to an individual with an unexpired benefit year only in 
the state in which an initial claim for TEUC is filed. In any other 
case, when the individual has unexpired or expired benefit year(s) in 
more than one state, the applicable benefit year is the individual's 
most recent benefit year ending during or

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after the week of March 15, 2001. The most recent benefit year, for an 
individual who has benefit years ending during or after the week of 
March 15, 2001, in more than one state, 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.
    5. ``Applicable State'' means, with respect to an individual, the 
state with respect to which the individual is an exhaustee for TEUC 
purposes, and, in the case of a combined wage claim for regular 
compensation, the term means the ``paying State'' for such claim as 
defined in 20 CFR 616.6(e).
    6. ``Applicable State Law'' means the state law of the state which 
is the applicable state for an individual.
    7. ``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.
    8. ``Benefit Year'' means, with respect to an individual, the 
benefit year as defined in the applicable state law.
    9. ``Compensation'' means cash benefits (including dependents' 
allowances) payable to individuals with respect to their unemployment, 
and includes regular compensation, additional compensation, extended 
compensation and TEUC as defined in this section.
    10. ``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, 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 as Extended Benefits or EB.
    11. ``Regular Compensation'' means compensation payable to an 
individual under any 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.
    12. ``Secretary'' means the Secretary of Labor of the United 
States.
    13. ``State'' means the States of the United States, the District 
of Columbia, the Commonwealth of Puerto Rico, and the Virgin Islands.
    14. ``State Agency'' means the Employment Security Agency 
(currently referred to as the State Workforce Agency) of a state which 
administers the state law.
    15. ``State Law'' means the unemployment compensation law of a 
state approved by the Secretary under section 3304(a) of the Internal 
Revenue Code of 1954 (26 U.S.C. 3304(a)).
    16. ``Temporary Extended Unemployment Compensation'' means the 
extended compensation payable under the Act, and which is referred to 
as TEUC, TEUC first tier, TEUC second tier (TEUC-X).
    17. ``TEUC First Tier'' means the amount of TEUC benefit payable to 
an individual based on a determination of entitlement under the 
requirements of section 203(b)(1) of the Act.
    18. ``TEUC Second Tier'' means the amount of TEUC benefit payable 
to an individual based on a determination of entitlement under the 
requirements of section 203(c) of the Act and is synonymous with TEUC-
X.
    19. ``Week'' means, for purposes of eligibility for and benefit 
payments under this Act, a week as defined in the applicable state law.
    20. ``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 to the same extent to claims filed 
under the requirements of this Act.

Section III--Implementing the Requirements of the Act

    1. Beginning and Ending of the TEUC Program in a State. TEUC is 
payable in a state beginning with the first week which begins after the 
date an Agreement is signed between the state and the Department of 
Labor. The last week of TEUC payable is the last week ending prior to 
January 1, 2003.
    States may terminate the TEUC agreement upon 30 days written 
notice. The TEUC period will end in a state 30 days from the date the 
state notifies the Secretary of its election to terminate the TEUC 
program. No TEUC will be payable for weeks which begin after the date 
the termination of the agreement is effective. However, TEUC is payable 
for weeks of unemployment up to such termination date. The agreement 
may also be terminated by the Secretary, as provided in the agreement.
    2. Notifications.
    a. Identification and Notification of Potentially Eligible 
Claimants. The state will identify individuals who are potentially 
eligible for TEUC, and provide each such individual with appropriate 
written notification of his/her potential entitlement to TEUC.
    A potentially eligible claimant is any claimant who has a benefit 
year that ends during or after the week of March 15, 2001, and has 
received all regular compensation payable based on employment and/or 
wages during the applicable base period, or whose rights to regular 
compensation have been terminated by reason of the expiration of the 
benefit year with respect to which such rights existed.
    (1) Interstate Claims. TEUC is payable to individuals filing under 
the Interstate Benefit Payment Plan (IBPP) in the same manner and to 
the same extent that benefits are payable to intrastate claimants 
without regard to whether or not the claim is filed through an agent 
state or directly with the liable state.
    The liable state is responsible for identifying and notifying all 
potentially eligible interstate claimants of their potential 
eligibility, including filing instructions.
    b. Notification of Media. To assure public knowledge of the status 
of the TEUC program, the state shall notify all appropriate news media 
having coverage throughout the state of the beginning of the TEUC 
program.
    3. Relation of EB to TEUC. Section 202(e) of the Act allows, if 
state law permits, the payment of TEUC ``in lieu of'' EB to a TEUC-
eligible individual. If a state elects to pay TEUC in lieu of EB, the 
amount of individual's EB entitlement is not otherwise affected: EB is 
deferred, not reduced. As a result, if the state is in an EB period 
when the individual exhausts all TEUC first and second-tier eligibility 
(see section 6.b of this section of the operating instructions), any 
individual meeting the EB eligibility requirements may receive any 
remaining EB entitlement.
    Under the Act, the receipt of EB does not reduce the amount of TEUC 
payable. A state is not required to trigger ``off'' EB if it elects to 
pay TEUC in lieu of EB.
    4. Effect of Additional Benefit (AB) Eligibility in a State. 
Although section 202(b) of the Act requires that an individual have no 
rights to regular compensation or EB in order to meet the eligibility 
requirements for TEUC, it requires the payment of TEUC regardless of AB 
eligibility. A state with an AB program in effect may pay AB following 
the payment of TEUC. AB does not affect the TEUC maximum benefit amount 
(MBA). Please note that section 209(b) of the Act amends section 903 of 
the Social Security Act by adding subsection (d)(3)(B)(i)(II) to allow 
the special $8 billion Reed Act distribution to be used for the payment 
of AB to exhaustees of TEUC.
    5. Eligibility for Temporary Extended Unemployment Compensation.

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    a. Basic Eligibility Requirements. To be eligible for a week of 
TEUC an individual, in addition to meeting other applicable State law 
provisions, must:
    (1) have exhausted all rights to regular compensation under the 
applicable state law with respect to the applicable benefit year.
    (2) have no rights to regular or extended compensation with respect 
to the week under such law or any other state or Federal unemployment 
compensation law.
    (3) not be receiving compensation with respect to such week under 
the unemployment compensation law of Canada,
    (4) have filed an initial claim, new or additional, effective 
during or after the week of March 15, 2001. Although the Act says ``on 
or after'' March 15, UI eligibility is determined on a weekly basis; 
therefore the Act is read to apply to the entire week. Please note that 
the period of time during which the filing of an initial claim that 
satisfies this requirement extends through the life of the TEUC program 
if the claimant had a benefit year on file as of the week of March 15, 
2001.
    b. Determining Exhaustees.
    (1) In General. For an individual to be deemed to have exhausted 
benefit rights to regular compensation with respect to an applicable 
benefit year for purposes of meeting the first TEUC eligibility 
criterion, the individual must have either:
    --the individual must have received all regular compensation 
payable based on employment and/or wages during the applicable base 
period; or
    --the individual's rights to regular compensation have been 
terminated by reason of the expiration of the benefit year with respect 
to which such rights existed;
    (2) Special Rules for Determining an Exhaustee for TEUC Purposes. 
An individual shall be deemed to have received all regular benefits 
available during the applicable benefit year or payable according to 
the monetary determination, even though:
    (A) as a result of an appeal concerning wages or employment or both 
which were not included in the original monetary determination, the 
individual may subsequently be determined to have entitlement to more 
or less compensation;
    (B) the individual may be denied benefits under a state law 
seasonality provision, but who has entitlement to future weeks in the 
off season;
    (C) after having established a benefit year during such year his/
her wage credits were canceled or the right to regular or extended 
compensation was totally reduced as the result of a disqualification;
    (D) the individual has not exhausted AB;
    (E) the individual is precluded from establishing a subsequent 
benefit year or qualifying for benefits in a subsequent benefit year by 
reason of state law requalifying provisions that require earnings after 
the beginning of the first benefit year;
    Note that an individual who has no rights to benefits in cases 
involving the failure to meet requalifying requirements ceases to be an 
exhaustee when the requalifying earnings requirement is met and regular 
compensation is payable in a new benefit year. When regular 
compensation becomes payable, the individual is no longer entitled to 
TEUC.
    c. Applicability of State Law Provisions. Under section 202(d)(2) 
of the Act, state law provisions of the applicable state that apply to 
the payment and continuing eligibility for regular compensation apply 
to the payment of TEUC except for the EB ``20 weeks of work'' 
requirement discussed in paragraph d. below.
    An individual is not entitled to receive TEUC for a week to which a 
disqualification would apply but for the fact that the individual has 
exhausted all rights to regular compensation.
    For example, an individual is disqualified for voluntary leaving 
until the individual earns six times the WBA. The individual's benefit 
year has ended and the individual has insufficient earnings to 
establish a new benefit year and, therefore, files a TEUC claim. Until 
this individual satisfies the requalification requirement imposed 
during the benefit year of the regular claim, the individual is not 
eligible to receive TEUC.
    d. Applicability of EB Provisions. Section 202(d)(2)(A) of the Act 
requires an individual to have 20 weeks of full-time insured employment 
or the equivalent insured wages, as determined under ``the provisions 
of the state law implementing section 202(a)(5)'' of the Federal-State 
Extended Unemployment Compensation Act (EUCA) of 1970. The equivalent 
in insured wages under EUCA equals: 40 times the individual's most 
recent weekly benefit amount, or 1 and \1/2\ times the individual's 
high quarter insured wages.
    To determine which of these earnings requirements the state may use 
to determine if the claimant has a qualifying applicable benefit year 
for TEUC, the state must consult ``the provisions of state law 
implementing section 202(a)(5).'' Thus, for example, if the state law 
authorizes the use of just one of the three requirements, the state may 
only use that single requirement for TEUC purposes. If the state law 
authorizes the use of two alternatives, then the state may use the two 
alternatives and if the state law authorizes the use of all three 
alternatives, then all three alternatives may be used.
    The suitable work and work search requirements of section 202(a)(3) 
of the EUCA of 1970 do not apply to the TEUC program. Neither do the 
subsequent employment provisions of section 202(a)(4) of the EUCA of 
1970.
    e. Effect of Other UI-Related Programs on Eligibility for TEUC.
    (l) Trade Readjustment Allowances (TRA). The maximum amount of TEUC 
payable to an individual who is also entitled to TRA shall not be 
reduced by reason of TRA entitlement. However, under section 233(a)(1) 
of the Trade Act of 1974, the individual's entitlement to TEUC will 
reduce the individual's maximum amount of ``basic'' TRA payable if the 
TEUC is payable during the UI benefit period established by or in 
effect at the time of the individual's first TRA qualifying separation 
under the applicable trade adjustment assistance certification issued 
by this Department. (For the definition of ``benefit period,'' see 20 
CFR 617.3(h).) If the TEUC entitlement occurs during a UI benefit 
period subsequent to the one in which the individual's first TRA 
qualifying separation occurred, the maximum amount of ``basic'' TRA 
payable will not be reduced by the amount of TEUC entitlement. In 
either case, however, the individual is not eligible for TRA until TEUC 
entitlement is exhausted.
    The provisions of section 233(d) of the Trade Act of 1974 (relating 
to reduction of EB entitlement because of the receipt of TRA in the 
most recent benefit year) are not applicable to determinations of 
entitlement to TEUC.
    (2) Disaster Unemployment Assistance (DUA). An individual is not 
eligible for DUA with respect to a week of unemployment under section 
4l0 of the Robert T. Stafford Disaster Relief and Emergency Assistance 
Act (42 U.S.C. 5177) if the individual is eligible to receive TEUC for 
that week.
    6. Establishment of TEUC Account. Section 203 of the Act requires 
the state to establish a TEUC account for each eligible individual. 
There is no restriction on the total amount of TEUC and regular 
compensation that is payable. Each program stands alone.
    a. TEUC Maximum Benefit Amount (MBA). The MBA in the individual's

[[Page 57070]]

account will be equal to the lesser of 50 percent of the total amount 
of regular benefits (including dependents' allowances) or 13 times the 
average regular compensation WBA (including dependents' allowances) 
payable to the individual with respect to the ``applicable benefit 
year'' for TEUC purposes. In states with a regular duration in excess 
of 26 weeks, the individual will be entitled to an MBA equal to 13 
times the average WBA, including dependents' allowance.
    If a redetermination or an appeal decision results in a 
determination that an individual is entitled to more or less regular 
compensation, the individual's status as an exhaustee must be 
redetermined, as appropriate, and an appropriate change shall be made 
in the individual's TEUC account.
    b. TEUC Second-Tier (TEUC-X). Individuals in some states may be 
eligible for a second tier of TEUC depending on when they exhaust their 
initial TEUC entitlement. Specifically, individuals who exhaust their 
initial TEUC entitlement in an EB period will qualify for TEUC-X in an 
amount equal to the original TEUC entitlement. The same terms and 
conditions applicable to the payment of the initial TEUC entitlement 
also apply to TEUC-X.
    TEUC-X may also be payable in some states where EB has not 
triggered on. Section 203(d)(2)(B) of the Act provides that a state 
will be treated as being in an EB period if section 203(d) of the EUCA 
of 1970, which sets the 5 percent insured unemployment rate trigger, 
contained a 4 percent trigger. All requirements for an EB period using 
a 5 percent IUR must also be met under the 4 percent trigger, including 
the 120 percent ``lookback'' provision, the 13-week minimum ``on'' 
period, and the 13-week minimum ``off'' period if the state dips below 
the required trigger. The beginning date of a state's 4 percent TEUC EB 
period will be based on when the state would have triggered ``on'' 
using such a trigger. For example, if a state would have triggered on 
EB for the week beginning March 3 using the 4 percent trigger, the 
state will remain on for a TEUC EB period for at least 13 weeks from 
that date.
    The Department will provide regular notices to states of which 
states qualify for TEUC second tier, and the beginning and ending dates 
of the 4 percent TEUC EB period during which TEUC-X is payable. See the 
reporting instructions for the ETA 539 in Section VI of this document.
    7. TEUC Weekly Benefit Amount.
    a. Total Unemployment. The WBA payable to an individual for a week 
of total unemployment is equal to the individual's most recent regular 
WBA including dependents' allowance for the ``applicable benefit 
year.''
    b. Partial and Part-Total Unemployment. To determine the amount 
payable for a week of partial or part-total unemployment, the state 
will calculate the payment amount in accordance with the state law 
applicable to such a week of unemployment.
    8. Record Maintenance and Disposal of Records. The state will 
maintain TEUC claims and payment data (including data on eligibility, 
disqualification and appeals) as required by the Employment and 
Training Administration (ETA).
    a. Record Maintenance. Each state will maintain records pertaining 
to the administration of the TEUC program, and will make all such 
records available for inspection, examination, and audit by such 
federal officials or employees as the Secretary of Labor or ETA may 
designate or as may be required by the law.
    b. Disposal of Records. The electronic/paper records created in the 
administration of the TEUC program shall be maintained by the state for 
3 years after final action (including appeals or court action) on the 
claim, or for less than the 3-year period if copied by micro photocopy 
or by an electronic imaging method. At the end of the 3 year period, 
the TEUC records are transferred to state accountability under the 
conditions for the disposal of records that apply to UCFE and UCX 
records as explained in Chapter XXII of ET Handbook No. 391 (1992 
Edition) and Chapter I, Page I-15, of ET Handbook No. 384 (1984 
Edition).
    9. Disclosure of Information. Information in records made and 
maintained by the 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. This provision on the 
confidentiality of information obtained in the administration of the 
Act shall not apply, however, to the requests for information or 
reports from U.S. Department of Labor, or to information, reports and 
studies with no individual identifiers, 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 U.S. 
Department of Labor promulgated thereunder.
    10. Inviolate Rights to TEUC. Except as specifically provided in 
these instructions, the rights of individuals to TEUC shall be 
protected in the same manner and to the same extent as the rights of 
persons to regular compensation are protected under the applicable 
state law. Such measures must include protection of claimants for TEUC 
from waiver, release, assignment, pledge, encumbrance, levy, execution, 
attachment, and garnishment, of their rights to TEUC. 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 TEUC.

Section IV--Processing Claims for TEUC

    1. Applicability of State Law Provisions. Under section 202(d)(2) 
of the Act, except where inconsistent with the Act, the terms and 
conditions of the state unemployment compensation law which are 
applicable to claims for and payment of regular compensation, apply to 
claims for, and payment of, TEUC. The provisions of the applicable 
state law apply to claims for TEUC include but are not limited to:
    a. Claim Filing and Reporting;
    b. Information to individuals, as appropriate;
    c. Notices to individuals and employers, as appropriate, including 
notice to each individual of each determination and redetermination of 
eligibility for or entitlement to TEUC;
    d. Determinations, redeterminations, appeals, and hearings;
    e. Disqualification, including disqualifying income provisions;
    f. Ability to work and availability for work;
    g. The Interstate Benefit Payment Plan; and
    h. The Interstate Arrangement for Combining Employment and Wages.
    2. Claims for TEUC.
    a. Intrastate Initial Claims. An initial claim for TEUC shall be 
filed by an individual according to the applicable state's manual, 
remote or electronic filing procedures.
    b. Interstate Initial Claims. Interstate TEUC claims are filed on 
the same forms and in the same manner as all other interstate initial 
claims against the liable state. Before accepting an initial TEUC 
claim, the agent or liable state, whichever is taking the claim, must 
review the individual's work history, examine potential entitlement and 
advise the individual of all filing options. If the individual has 
sufficient employment and wages to establish a new benefit year under 
any state or federal program, including the combined wage arrangement, 
no right to file under the TEUC program exists.

[[Page 57071]]

When an initial TEUC claim is filed through the agent state, the state 
will:
    (1) Complete an Initial Interstate Claim, Form IB-1, check claim 
type ``other'' and identify as TEUC;
    (2) Review the individual's work history and advise the individual 
of all filing options;
    (3) Transmit a TC-IBl to the liable state.
    c. Intrastate and Interstate Weeks Claimed. Claims for payments of 
TEUC for weeks of unemployment shall be filed at the same times and in 
the same manner as claims for regular compensation are filed under the 
applicable state law, and on forms or following electronic filing 
procedures as furnished to the individual by the state agency.
    d. Combined Wage Claims. TEUC shall be payable to individuals 
filing under the Interstate Arrangement for Combining Employment and 
Wages (CWC) in the same manner and to the same extent that benefits are 
payable to other intrastate or interstate claimants.
    Administrative, entitlement and eligibility requirements provided 
in this document also apply to claims filed under the CWC program, 
except where clearly inconsistent with combined wage (and interstate, 
when applicable) procedures, policies and rules.
    When a TEUC determination or redetermination is issued on a CWC 
claim, no Report of Determination of Combined-Wage Claim, TC-IB5, will 
be issued to the transferring state. The paying state will not bill 
transferring states for TEUC. The paying state will charge all TEUC 
benefits paid on CWC claims directly to the EUCA account in accordance 
with the fiscal instructions provided in Section V.
    3. Secretary's Standard. The procedures for reporting and filing 
claims for TEUC shall be consistent with these instructions and the 
Secretary's ``Standard for Claim Filing, Claimant Reporting, Job 
Finding and Employment Services'' (Employment Security Manual, Part V, 
sections 5000 et seq.).
    4. Determination of Entitlement: Notices to Individual.
    a. Determination of Initial Claim. The state agency shall promptly, 
upon the filing of an initial claim for TEUC, determine whether the 
individual is eligible and, if the individual is found to be eligible, 
the weekly and maximum amounts of TEUC payable to the individual. The 
individual must be issued an appealable determination.
    b. Determination of Weekly Claims. The state agency shall promptly, 
upon the filing of a claim for a payment of TEUC for a week of 
unemployment, determine whether the individual is entitled to a payment 
of TEUC for such week, and, if entitled, the amount of TEUC to which 
the individual is entitled to and issue a prompt payment.
    c. Redetermination. The provisions of the applicable state law 
concerning the right to request, or authority to undertake, 
reconsideration of a determination pertaining to regular compensation 
under the applicable state law shall apply to determinations pertaining 
to TEUC.
    d. Notices to Individual. The state agency shall give notice in 
writing to the individual of any determination or redetermination of an 
initial claim and all weekly claims. Each notice shall include such 
information regarding the right to reconsideration or appeal, or both, 
as is furnished with written notices of determinations and 
redeterminations with respect to claims for regular compensation. The 
state agency must also provide the following notice to all claimants 
filing an initial claim for TEUC:

    Notice: Under 18 U.S.C. 1001, knowingly and willfully concealing 
a material fact by any trick, scheme, or device or knowingly making 
a false statement in connection with this claim is a Federal 
Offense, punishable by a fine of not more than $10,000 or 
imprisonment for not more than five years, or both.

    e. Promptness. Full payment of TEUC when due shall be made with the 
greatest promptness that is administratively feasible.
    f. Secretary's Determination Standard. The procedures for making 
determinations and redeterminations and furnishing written notices of 
determinations, redeterminations, and rights of appeal to individuals 
claiming TEUC shall be consistent with the Secretary's ``Standard for 
Claim Determinations--Separation Information'' (Employment Security 
Manual, Part V, sections 6010 et seq.)
    5. Appeal and Hearing
    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 regular compensation shall apply to 
determinations and redeterminations of eligibility for or entitlement 
to TEUC.
    b. Rights of Appeal and Fair Hearing. The provisions on right of 
appeal and opportunity for a fair hearing with respect to claims for 
TEUC shall be consistent with these instructions and with sections 
303(a)(1) and 303(a)(3) of the Social Security Act (SSA) (42 U.S.C. 
503(a)(1) and 503(a)(3)).
    c. Promptness of Appeals Decisions.
    (1) Decisions on appeals under the TEUC Program shall accord with 
the Secretary's ``Standard for Appeals Promptness-Unemployment 
Compensation'' in 20 CFR part 650.
    (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 entitlement 
to TEUC.
    6. Fraud and Overpayment. The Act contains specific provisions with 
respect to fraud and overpayments of TEUC. Provisions of the state law 
applied to detection and prevention of fraudulent overpayments of TEUC 
will be, as a minimum, commensurate with those applied by the state 
with respect to regular compensation and which are consistent with the 
Secretary's ``Standard for Fraud and Overpayment Detection'' 
(Employment Security Manual, Part V, Sections 7510 et seq.).
    a. Fraudulent Claiming of TEUC. Section 206 of the Act provides 
that, if an individual 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 as a result of such false statement or representation or of 
such nondisclosure the individual has received an amount of TEUC to 
which the individual was not entitled, the individual:
    (1) shall be ineligible for further TEUC in accordance with the 
provisions of the applicable state unemployment compensation law 
relating to fraud in connection with a claim for unemployment 
compensation, and
    (2) shall be subject to prosecution under section 1001 of Title 18, 
U.S.C.
    Provisions of state law relating to disqualification for 
fraudulently claiming or receiving a payment of compensation shall 
apply to claims for and payment of TEUC.
    When a state has sufficient facts to make a prima facie case under 
18 U.S.C. 1001, it will consider referral for criminal prosecution in 
accordance with the provisions of the Memorandum of Understanding (MOU) 
between the Department of Labor's Office of Inspector General (USDOL-
OIG) and the Employment and Training Administration, which was 
transmitted as an attachment to UIPL No. 10-87 (also see UIPL No. 16-85 
and UIPL No. 21-90).
    States should pursue TEUC fraud cases in the same way all other 
state and federal claims are handled. At this time,

[[Page 57072]]

states should refer only multi-state or multi-claimant cases to the 
USDOL-OIG for prosecution. If the state believes that federal 
prosecution is warranted, the state will refer the case to the 
appropriate Regional Office of the USDOL-OIG.
    For those cases not referred to the OIG for investigation and 
prosecution or if the OIG does not accept the case for investigation, 
or if it is accepted, but is later returned because the U.S. Attorney 
declines prosecution, the state should refer the case for prosecution 
under state law provisions.
    b. Overpayments. Under section 206(b) of the Act each state shall 
require repayment from individuals who have received any payment of 
TEUC to which they are not entitled (whether fraudulent or non-
fraudulent), unless the state, under the optional language of section 
206(b), elects to waive recovery. The option to waive recovery only 
applies to non-fraudulent overpayments.
    (1) Application of State Waiver Provision. If the state has a state 
law waiver provision for regular compensation, the state provision may 
be applied to non-fraudulent TEUC overpayments if the provision 
requires the state to determine that--

--The payment of such TEUC was without fault on the part of the 
individual, and
--Such repayment would be contrary to equity and good conscience.

    In making these determinations, the state shall apply the same 
standards as are applied in making such determinations with respect to 
the waiver of overpayments of regular compensation.
    (2) Optional TEUC Waiver. Any state that does not have a state 
waiver provision or does not have a state waiver provision that meets 
both the ``fault'' and ``equity and good conscience'' requirements 
stated in (1) above may adopt this optional TEUC waiver. If the state 
elects to implement the optional TEUC waiver, it may not do so until it 
has issued agency operating instructions for staff to follow.
    (A) The state may waive recovery of a non-fraudulent TEUC 
overpayment if it determines that--

--The payment of such TEUC was without fault on the part of the 
individual, and
--Such repayment would be contrary to equity and good conscience.
    (B) In determining whether fault exists, the following factors must 
be considered:
--Whether a material statement or representation was made by the 
individual in connection with the application for TEUC that resulted in 
the overpayment, and whether the individual knew or should have known 
that the statement or representation was inaccurate.
--Whether the individual failed or caused another to fail to disclose a 
material fact, in connection with an application for TEUC that resulted 
in the overpayment, and whether the individual knew or should have 
known that the fact was material.
--Whether the individual knew or could have been expected to know that 
the individual was not entitled to the TEUC payment.
--Whether, for any other reason, the overpayment resulted directly or 
indirectly, and partially or totally, from any act or omission of the 
individual or of which the individual had knowledge, and which was 
erroneous or inaccurate or otherwise wrong.

    (C) In determining whether equity and good conscience exists, the 
following factors may be considered:

--Whether the overpayment was the result of a decision on appeal;
--Whether the state agency had given notice to the individual that the 
individual may be required to repay the benefit payment in the event of 
a reversal of the eligibility determination on appeal; or
--Whether recovery of the overpayment will cause financial hardship to 
the individual.

    (3) Recovery of Overpayments. Section 206(c)(2) of the Act 
specifically requires that no repayment of a TEUC overpayment may be 
required, and no deduction may be made, until a determination has been 
issued and an opportunity for a fair hearing thereon has been given to 
the individual concerned, and the determination has become final. When 
the determination requiring repayment is issued, the state shall 
restore the full amount of the recoverable overpayment to the 
individual's TEUC available account balance.
    (A) Unless a TEUC overpayment is otherwise recovered, or is waived, 
the state shall, during the three-year period after the date the 
individual received the payment of TEUC to which the individual was not 
entitled, recover the overpayment by deductions from any sums payable 
to the individual under any federal unemployment compensation law 
administered by the state or any other federal law administered by the 
state which provides for the payment of any assistance or an allowance 
with respect to unemployment.
    (B) To the extent permitted under state law, a TEUC overpayment may 
be recovered by offset, except that: (1) no single offset may exceed 50 
percent of the amount otherwise payable to the individual for the week; 
and (2) offset of benefits payable is limited to the three-year period 
following the date that the claimant received the improper payment(s).
    (C) At the end of the three-year period, the state may remove the 
overpayment from its accounting record. Although no further active 
collection efforts by the state are required, the state shall maintain 
an administrative record during the subsequent three-year period to 
provide for possible collection. After the subsequent three-year period 
(a total of six years from the date the claimant received the improper 
payment(s)), the state may dispose of the overpayment record.
    (D) TEUC overpayment recovery shall be enforced by any action or 
proceeding which may be brought under state or federal law, unless 
recovery of the overpayment is waived or prohibited in accordance with 
the Act and the instructions in this section.
    (E) Overpayments of TEUC recovered in any manner shall be deposited 
into the fund from which payment was made.
    (F) If a state has an agreement in effect with the Secretary to 
implement the cross-program offset provisions of section 303(g)(2) of 
the SSA, TEUC payments shall be used to offset state compensation 
overpayments, and state compensation payments shall be used to offset 
TEUC overpayments. If the state does not have an agreement with the 
Secretary under section 303(g)(2), SSA, the state must not use TEUC to 
offset a state compensation overpayment, but may under section 
303(g)(1), SSA, offset state compensation payments to recover TEUC 
overpayments.
    (G) If a state has the cross-program offset agreement and an 
Interstate Reciprocal Overpayment Recovery Arrangement in effect with 
the National Association of State Workforce Agencies, TEUC payments may 
be used to offset state compensation overpayments for other states that 
also have both agreements in effect. If the other state does not have 
an agreement with the Secretary under section 303(g)(2), SSA, TEUC 
benefits may only be used to offset overpayments of federal benefits 
for such state.

Section V--Fiscal Instructions

    1. Payment to States. Under section 204 of the Act each state that 
has

[[Page 57073]]

entered into an agreement to pay TEUC will be paid an amount equal to 
100 percent of the amount of TEUC paid to individuals by the state 
under the agreement and in full accordance with the Act and these 
instructions.
    a. Requesting TEUC Benefit Funds. States will request funds from 
the Extended Unemployment Compensation Account (EUCA) to pay all TEUC 
benefits attributable to all claim types (UI, UCFE, and UCX). Drawdown 
procedures are not changed all requests go through the Automated 
Standard Application for Payments (ASAP) system. Drawdown requests must 
adhere to the funding mechanism stipulated in the Treasury-State 
Agreement executed under the Cash Management Improvement Act of 1990. 
Requests will be funded in the same manner as all ASAP transactions 
elected by the states (FEDWIRE or ACH to the state benefit payment 
account). See paragraph 3. in this section for specific instructions.
    Benefits paid to former employees of state and local governments, 
``501(c)(3)'' nonprofit organizations and federally recognized Indian 
tribes are funded from U.S. Treasury general revenues through the EUCA. 
This does not affect the process for requesting funds, but does affect 
the reporting of those benefits on the ETA 2112. States are to report 
all TEUC payments, including reimbursable, UCFE/X on line 39, column F. 
(Note that it does not matter whether these employers have elected 
reimbursement status.) See the reporting instructions in Section VI for 
details.
    b. TEUC Administrative Funds. Section 205(c) of the Act 
appropriated funds from the Employment Security Administration Account 
(ESAA) in the Unemployment Trust Fund, to pay costs related to the 
administration of the TEUC agreement. Section 205(c) also authorizes 
the Secretary to determine each state's share of the amount 
appropriated according to the factors described in section 302(a) of 
the Social Security Act (42 U.S.C. 501(a)). States will receive TEUC 
administrative funds through the contingency entitlement process. (See 
Section VI, Paragraph 2.h.)
    2. TEUC Reporting Instructions.
    a. Obligational Authority. The Grant Officer will assign a separate 
line on the UI program notices of obligational authority for TEUC grant 
funds, and a separate sub-account for TEUC will be set up in the 
Payment Management System for SWAs to draw down TEUC administrative 
funds.
    b. Administrative Fund Accounting. Because of the separate 
appropriation for TEUC administrative funds and the availability of 
these funds until expended, SWAs must track and report TEUC 
administrative expenditures and obligations separately from the regular 
UI program. Therefore, SWAs should establish a separate fund ledger and 
must submit a separate SF 269 for the TEUC program. SWAs should include 
any TEUC administrative expenditures and obligations incurred in March 
2002 in their June 30, 2002, TEUC SF 269 report.
    c. Time Distribution. To ensure that regular UI and TEUC costs are 
tracked separately, SWAs should charge time used for all TEUC 
activities to the appropriate UI functional activity codes as outlined 
in Appendix E to ET Handbook No. 410) under the separate TEUC fund 
ledger; however, SWAs should combine regular and TEUC staff year usage 
data in Section A of the UI-3 worksheet.
    d. Accounting for TEUC Payments (Benefits).
    (1) TEUC advances to the states' UTF accounts, and disbursements 
for TEUC benefit payments will be reported on the monthly ETA 2112. Do 
not use a separate form for this report. (See Section VI, Reporting 
Instructions.) Accurate reporting of advances, reimbursements and 
payments is important due to the monthly reconciliation of balances 
with OWS records; balances are subject to constant congressional and 
public inquiries.
    (2) Since TEUC paid to UCFE and UCX will be funded out of General 
Revenues, the Federal Employees Compensation (FEC) Account will not be 
used to pay TEUC benefits. Therefore, federal agencies will not be 
required to reimburse the Unemployment Trust Fund for TEUC paid to 
federal employees. The ETA 191 report and UCFE/UCX detailed claimant 
data provided by states to Federal agencies must exclude TEUC.
    3. Drawdown Instructions for TEUC. Beginning on March 15, 2002, 
there will be one or more new lines in the Automated Standard 
Application for Payments System (ASAP) for making drawdowns to pay TEUC 
benefits. The line(s) are clearly labeled TEUC and may be broken down 
by type of payment for former employees of contributory employers, 
UCFE/X, or reimbursable and special contributory employers. The Bureau 
of Public Debt, managers of the UTF, will immediately inform state 
users of the ASAP of any modifications to screens or drawdown 
instructions.
    a. Processing Refunds. There are two scenarios for returning funds 
to these program lines. The most likely scenario will be when the state 
has funds in their state UI account and they need to return those 
funds. This should be completed as a negative amount posted to the 
appropriate line in ASAP. To accomplish this, the total draw for the 
day in ASAP must be greater than the negative balance posted to the 
appropriate line.
    The second scenario is when a state actually has the funds in its 
federal UI account that are required to be returned to the appropriate 
program line. This should be accomplished by the state processing a 
book transfer transaction that accomplishes a transfer from its UI 
account to the appropriate program under the EUCA account.

Section VI--Reporting Instructions

    1. General. The TEUC program reports, ETA 207, ETA 218, ETA 227, 
ETA 5130 and ETA 5159 should be submitted electronically by utilizing 
separate TEUC entry screens that are available through the UI Required 
Reports electronic reporting system. These reports will mirror the 
reports required for the regular Federal-State Extended Benefits 
program. TEUC activity should also be reported on the ETA 2112, ETA 539 
and UI-3 as specified below in section 2. Unless otherwise noted, 
definitions of items will follow definitions in the regular program as 
specified in ETA Handbook 401, 3rd Edition. Due dates will be the same 
as the regular versions of reports.
    Reporting will begin with the first reporting period in which the 
effective date of the TEUC program falls. Reporting for all Reports 
except the ETA 2112 will continue for twelve full months or four full 
quarters after the last payable week of the TEUC program. For those 
reporting periods in this post-TEUC time frame, only reports, which 
have non-zero data, need be submitted. Reporting on the ETA 2112 should 
continue for as long as there is activity.
    2. Data Items to be Reported.
    a. ETA 207. Report column 1, Total Determinations and 
Redeterminations, for lines 101 through 106. Report also lines 201 and 
202, columns 7 through 10; and lines 301 and 302, columns 11, 12, 14, 
and 17.
    b. ETA 218. Report line 100, columns 1 through 3.
    c. ETA 227. Report Section A, Overpayments Established, lines 101 
and 103, for columns 2 through 5. Also report all of Section C, 
Recovery/Reconciliation, excluding lines 303-307, columns 11-14.
    d. ETA 5130. Report all data elements.
    e. ETA 5159. For Section A Claims Activities, report initial claims 
information for columns 2 through 5 and column 7 for lines 101 through 
103. Report eligibility reviews and continued

[[Page 57074]]

weeks claimed activity for columns 8 through 12 for lines 201 through 
203. The claims information needed for column 11 for lines 201 through 
203 will be identified as entitlement type ``code 2'' (Federal Benefit 
Extension) in field number 28 on the Interstate Liable-Agent Data 
Transactions (LADT). For Section B, Payment Activities, report columns 
14, 15, 17, 18, and 19 for lines 301 through 302 and columns 21 and 
columns 24 through 28 for line 303.
    (1) First Payments. Report the first payment under TEUC program. Do 
not report the first payment after TEUC-X augmentation as a first 
payment.
    (2) Final Payments. A final payment is to be reported when a 
payment is issued that exhausts the benefit entitlement in the 
individual's TEUC account. When the state is in an EB period or a TEUC 
EB period, only payments that exhaust a TEUC account that has been 
augmented with TEUC-X is reported as a final payment.
    f. ETA 2112. Regular activity should be reported in the aggregate 
on the electronic regular ETA 2112 report as usual. Information 
reflecting TEUC activity should be reported as follows:
    Line 15. Reed Act Distributions. Include all Reed Act distributions 
to the state account in the UTF.
    Line 16. Intra-Account Transfer. Include in line 16F the amount of 
TEUC funds transferred from the UTF to the state benefit payment 
account.
    Line 23. Federal Emergency Compensation. Enter in columns C and E 
the amount of Federal funds received as advances or reimbursement for 
TEUC.
    Lines 33, 34, 35. Enter total benefits paid, attributable to state 
and local governments, ``501(c)(3)'' nonprofits, and Indian tribes, as 
appropriate, on the appropriate line for the type of employer, 
excluding TEUC benefits.
    Line 36. FECA Net Federal Benefits--UCX. Enter in columns C and F 
the net Federal portion of unemployment compensation paid to former 
members of the armed services, excluding TEUC. The total payments 
should be adjusted for refunds deposited during the month, credits and 
recharges, and cancellations and reissuances.
    Line 39. Federal Emergency Compensation. Enter in columns C and F 
the net amount for which the federal government is liable for TEUC, 
including Unemployment Compensation for Former Federal Civilian 
Employees (UCFE) and Unemployment Compensation for Ex-Servicemembers 
(UCX) and federal emergency programs. Include residual activity (e.g., 
overpayment recoveries) from expired emergency programs (e.g., 
Emergency Unemployment Compensation (EUC), Federal Supplemental 
Compensation (FSC), Federal Supplemental Benefits (FSB). Break out all 
disbursements by program in the ``Comments'' section as follows:
    (1) Regular--TEUC benefits paid to former employees of contributory 
employers.
    (2) Reimbursable, Federal, and Special Contributory--TEUC benefits 
paid to former employees of the federal government (UCFE and UCX), 
state and local government (contributory or non contributory) section 
501(c)(3) employers (contributory or non contributory employers to 
which section 3309(a)(1) of the Internal Revenue Code applies), and 
Indian Tribes (contributory or non contributory.
    (3) Expired Program Transactions--any residual activity for expired 
federal benefit extension programs, e.g., recoveries of EUC 
overpayments.
    Line 41. Reed Act Withdrawals. Enter all Reed Act funds withdrawn 
from the state account in the UTF.
    Line 43. FECA Net Benefit Payments--UCFE. Enter in columns C and F 
the net Federal portion of unemployment compensation paid to former 
federal civilian (including postal) employees, excluding TEUC. The 
total payments should be adjusted for refunds deposited during the 
month, credits and recharges, and cancellations and reissuances.
    Line 50. Withholding. States are to report gross benefits in column 
F regardless whether amounts of withholding transferred to the IRS goes 
through the state benefit payment account. See ETA Handbook 401, 3rd 
Edition, for specific instructions. Line 16 F must equal Line 44E.
    g. ETA 539. Total weeks claimed for State, UCFE, and UCX under the 
TEUC program for the report period will be reported in the comments 
section and labeled as ``TEUC'' followed by the number. For example: 
``TEUC=239''. (The agent weeks claimed information needed for this 
report will be obtained from the LADT identified in field 28 as ``code 
2'', Federal Benefit Extension.)
    h. UI-3 Worksheet. Report TEUC claims activity/workload activity 
electronically on the lines for third tier programs on the regular UI-3 
report.
    3. Notification of a TEUC EB Trigger. States with a TEUC agreement 
with the Secretary may already have triggered or may trigger a TEUC EB 
period under the requirements of section 203(c) of the Act. A letter 
from the governor or appropriate state official declaring that the 
state has triggered either on or off the TEUC EB period based on the 4 
percent IUR is required in the same manner as for an EB period under 
EUCA.
    States with a 4 percent IUR as of enactment of the TEUC Act should 
immediately declare a TEUC EB period indicating a beginning date in 
accordance with the requirements of 20 CFR 615.12. Send letter to: Ms. 
Grace Kilbane, Office of Workforce Security, 200 Constitution Avenue, 
NW., Room S-4231, Washington, DC 20210.
    Any paper reports should be faxed to 202-693-3229 instead of 
mailing. The cover sheet should indicate delivery to UI Required 
Reports.
    4. OMB Approval. The information collection effort described in 
these reporting instructions has been approved by the Office of 
Management and Budget (OMB) under OMB Approval No. 1205-0433, 
expiration date--11/30/2002. However, as indicated in Section VI.1, OMB 
approval is being sought for extension through 12/31/2003. ETA will 
notify states upon OMB approval of action.

Section VII--Questions and Answers for Clarification of Title II of 
Public Law 107-147

1. Administrative

    a. Question: When is the agreement between the state and the 
Department of Labor effective? Is it effective with the date the state 
authorizing official signs the document or are both signatures 
required?
    Answer: The agreement takes effect after enactment and both parties 
have signed. TEUC is payable beginning the following week.
    b. Question: What is the first week payable for TEUC?
    Answer: The first week payable is the first week which begins after 
the state enters into a TEUC agreement.
    c. Question: What is the official name of the federal extension?
    Answer: Temporary Extended Unemployment Compensation (TEUC).
    d. Question: How will states know which states are in a TEUC EB 
period under the 4 percent trigger?
    Answer: The Office of Workforce Security will issue a separate TEUC 
trigger notice identifying the states where second-tier (TEUC-X) is 
payable.
    e. Question: Does a state have to do anything special to declare 
that TEUC-X is payable under the state law based on the four (4) 
percent trigger?
    Answer: Yes. As is the case with the EB program, the state must 
send a letter advising the department that it is triggering ``on'' or 
``off'' a second-tier period. The information currently provided by the 
states on the ETA 539 report will be used to issue the TEUC trigger 
notices.

[[Page 57075]]

    f. Question: When a TEUC EB period ``OFF'' indicator occurs, does 
the state discontinue payment of TEUC to individuals who have been 
determined eligible for TEUC-X benefits?
    Answer: The ending of a TEUC EB period does not affect the payment 
of TEUC-X to individuals who established eligibility during the TEUC EB 
period. Section 203(c) provides that an individual's TEUC account shall 
be augumented by an amount equal to the original TEUC account if a TEUC 
EB period is in effect at the time of the original TEUC account 
exhaustion. It doesn't provide for termination of payments if the 
period triggers off. The ending of the TEUC EB period only affects 
determinations of entitlement to TEUC-X for new exhaustees. Individuals 
who exhaust benefits with a week of unemployment that ended after the 
TEUC EB period ended are not eligible for TEUC-X.
    g. Question: For those states that currently have an insured 
unemployment rate of 4 percent or above, what is the beginning date of 
the TEUC EB period?
    Answer: The beginning and ending of the TEUC EB Period is 
determined in the same manner as a regular EB period using a 4 percent 
insured unemployment rate (IUR) in place of 5 percent. Therefore, the 
TEUC EB Period begins with the third week that begins after the ``ON'' 
indicator and ends with the ending of the third week ending after the 
``OFF'' indicator.
    h. Question: If the state's IUR would cause the TEUC EB Period 
beginning date to precede the effective date of the TEUC agreement in a 
state, does the mandatory 13-week ``ON'' period begin with the earlier 
date or with the first week that begins after the agreement is in 
effect?
    Answer: The mandatory 13-week ``ON'' period begins with the earlier 
date, because section 203(c) of the Act does not affect the normal 
calculation of when the period begins and ends.
    i. Question: If state law requires a request for redetermination 
before appeal of a monetary determination, is state law followed for 
TEUC monetary appeals?
    Answer: Yes. Section IV, 5.c. provide that the provisions of state 
law apply to determinations pertaining to TEUC.
    j. Question: May an individual in continued claim status at the 
time of exhaustion be automatically switched to a TEUC claim without 
filing a TEUC initial claim?
    Answer: No. A TEUC initial claim must be filed that meets the 
state's requirements for claims filing.
    k. Question: May individuals be paid TEUC for weeks of unemployment 
prior to the effective date of the legislation?
    Answer: No. TEUC is payable only for weeks of unemployment 
beginning after enactment of the TEUCA and the state's execution of a 
TEUC agreement with the Secretary of Labor.
    l. Question: My state is in an EB period and has a TEUC agreement 
with the Secretary of Labor. If my state chooses to pay EB before TEUC, 
are we required to pay TEUC effective March 10, 2001, to individuals 
who have an applicable benefit year for TEUC, but not for EB?
    Answer: Yes. The agreement requires the state to implement the TEUC 
program effective with the first week beginning after the agreement was 
executed for individuals who meet the requirements of section 202(b) of 
the TEUCA.
    m. Question: My state is in an EB period and has a TEUC agreement 
with the Secretary of Labor. If my state chooses not to pay TEUC in 
lieu of EB, is my state prohibited from paying TEUC to an individual 
prior to the exhaustion of EB?
    Answer: Yes. If the state does not exercise its option under 
section 202(e) of the TEUCA to pay TEUC in lieu of EB, the individual 
does not meet the requirements of section 202(b)(2) of the TEUCA until 
EB is exhausted.

2. Claimants Potentially Eligible for TEUC

    a. Question: What is the universe of claimants who are potentially 
eligible for TEUC?
    Answer: In addition to meeting state law eligibility requirements 
that are not inconsistent with the Act or operating instructions, any 
individual with a benefit year ending during the week of March 15, 2001 
and thereafter who--
    (1) has exhausted all rights to regular compensation;
    (2) has no rights to regular or extended compensation under any 
state or Federal law;
    (3) is not receiving compensation under the Canadian law; and who
    (4) filed an initial claim (new or additional, including 
transitionals) for compensation during the week of or after March 15, 
2001. (This condition may be met with the filing of an initial claim at 
any time up until the TEUC program ends.)
    Example: The individual exhausted benefits with the week ending 
January 6, 2001, and his/her benefit year ended Saturday, June 2, 
2001. The individual did not file an additional claim on that claim 
during or after the week that included March 15, 2001. If the 
individual files a new claim for regular compensation between the 
week of March 15, 2001 and the end of the TEUC program and is 
determined monetarily ineligible, he/she is potentially eligible for 
TEUC.

    b. Question: Are individuals who filed a new claim and established 
a benefit year or filed an additional claim on an existing benefit 
year, during or after the week of March 15, 2001, but received no 
payments before the benefit year ended potentially eligible for TEUC?
    Answer: Yes, because the ending of the benefit year prevents the 
individual from receiving the regular benefit balance that was 
available. Therefore, the claimant is an exhaustee for TEUC purposes.
    c. Question: For purposes of section 202(b)(4), TEUCA, are 
transitional claims considered initial claims?
    Answer: Yes. See Section VII.2.a.(4) above.
    d. Question: My state law provides that during an EB period, 
regular benefits in excess of 26 times the WBA (sharable regular) will 
be denied if the individual failed to purge a disqualifying separation 
through subsequent employment. Is this individual an exhaustee for TEUC 
purposes?
    Answer: No. This individual is not an exhaustee because the 
individual has not ``received all regular compensation payable'' with 
respect to the benefit year and does not fall within the special rules 
for determining exhaustees. The fact that regular benefits in excess of 
26 times the WBA are subject to EB eligibility requirements does not 
change the fact that they are regular benefits. However, when the 
benefit year ends, if the individual is not entitled to regular 
benefits on a new benefit year, the individual is an exhaustee. 
Additionally, since state law does not require that the separation 
disqualification be purged through subsequent work in order for the 
individual to qualify for regular benefits in a subsequent benefit 
year, it does not carry over to the TEUC claim.
    e. Question: My state law provides that during an EB period, an 
individual must meet the EB work search requirements to qualify for 
regular benefits in excess of 26 times the WBA (sharable regular) and 
imposes the EB disqualification requiring subsequent employment to 
purge a disqualification. Is an individual who is held ineligible under 
the EB work search provision an exhaustee for TEUC purposes?
    Answer: No. This individual is not an exhaustee for the same 
reasons described in question and answer 2.b. above. However, this 
individual is an

[[Page 57076]]

exhaustee after the end of the benefit year, if there is no entitlement 
to regular benefits on a new benefit year. The disqualification does 
not carry over to TEUC, if the state is paying TEUC in lieu of EB, 
because the EB work search requirement only applies to regular benefits 
in excess of 26 times the WBA and EB in accordance with 20 CFR 
615.9(a).
    f. Question: To be considered an ``exhaustee,'' must a person have 
received all regular benefits, i.e., must benefits actually have been 
paid on the parent claim?
    Answer: No. See Section III.5(b).
    g. Question: When an individual has only a monetarily ineligible 
claim on file showing a benefit year ending date during or after the 
week of March 15, 2001, and there is no record of an appeal, is this 
individual potentially eligible for TEUC?
    Answer: No. Because the individual did not have sufficient 
employment and/or wages to establish monetary entitlement, there is no 
applicable benefit year with respect to which the individual exhausted 
all rights to regular compensation, as required by section 202(b)(1), 
TEUCA.

3. Applicable Benefit Year for TEUC Purposes

    a. Question: Does an individual with a qualifying benefit year who 
is eligible for regular benefits on a subsequent benefit year have the 
option to receive TEUC based on the first benefit year?
    Answer: No. An individual with existing entitlement to regular 
compensation is not an exhaustee for TEUC qualifying purposes.
    b. Question: If an individual has two qualifying benefit years on 
file and has exhausted the subsequent benefit year, does the individual 
have the option to receive TEUC based on the first benefit year?
    Answer: No. The most recently exhausted benefit year is the 
applicable benefit year for TEUC purposes under the definitions 
published in Section II.
    c. Question: Does TEUC entitlement exist for an individual who 
received some TEUC before the end of his/her benefit year and who fails 
to qualify on a new benefit year because he/she has not earned 
requalifying wages?
    Answer: Yes. Individuals who are unable to qualify for benefits on 
a subsequent benefit year because of a failure to meet the requalifying 
wage requirements and who otherwise meet the TEUC requirements will be 
eligible for TEUC. If the requalifying requirements are met, the 
individual will no longer meet the requirements for TEUC eligibility 
because he/she would no longer be an exhaustee.
    d. Question: When an individual who otherwise meets the eligibility 
requirements for TEUC has established a second benefit year and has had 
his/her wage credits canceled or the right to regular compensation 
totally reduced as the result of a disqualification, is the individual 
entitled to TEUC based on the prior benefit year?
    Answer: No. The ``applicable benefit year'' for TEUC is the current 
benefit year where the disqualification has been imposed. The TEUC 
monetary is determined based on the regular benefit monetary 
determination prior to wage cancellation. However, any requalifying 
requirement imposed by the disquali-fication applies to TEUC 
eligibility.
    e. Question: In some cases, due to the receipt of severance pay, an 
individual's eligibility for regular compensation may be postponed or 
reduced. This may result in no regular compensation being paid during 
the benefit year. Even though no benefits were ever actually paid, are 
these individuals considered to be ``exhaustees?'
    Answer: Yes. Section III.5(b).

4. Monetary Eligibility

    a. Question: Is there a uniform 13-week duration for TEUC 
regardless of the regular claim maximum benefit amount (MBA)?
    Answer: No. The TEUC MBA is computed as the lesser of 50 percent of 
the regular MBA, including dependents' allowance, or 13 times the 
average weekly benefit amount (WBA). Fifty percent of the regular MBA 
may result in less than 13 weeks of benefits.
    b. Question: If there has been a recent increase in the state's WBA 
that applies to all benefit years on file with a balance, what impact 
does it have on the TEUC WBA and MBA?
    Answer: The individual's TEUC WBA will be the most recent regular 
WBA payable applicable to the individual. The individual's MBA will 
represent the lesser of 50 percent of the total regular benefit MBA or 
13 times the average of both WBAs paid during the benefit year.
    c. Question: If an individual receives a monetary penalty on his/
her regular claim, is the TEUC claim figured on the regular amount 
before or after the penalty (e.g., wage cancellation or reduction of 
the MBA)?
    Answer: Before the penalty. Although section 203(b)(1) of the Act 
requires that the amount in the TEUC account equal the lesser of 50 
percent of the regular benefits payable or 13 times the average WBA, 
the Department has consistently held that the determination of the 
monetary award for federally-financed extensions should be based on the 
award prior to the application of the penalty because to base 
entitlement on the lesser redetermined amount would be tantamount to 
imposing a second penalty for the same disqualifying act. (Refer to 20 
CFR 615.5(a)(1)(i) and (b)(3)).
    d. Question: When a state is in a TEUC EB period, what individuals 
qualify for the TEUC-X monetary determination?
    Answer: Under section 203(c)(1) of the Act, only those individuals 
who exhaust the first-tier TEUC during the TEUC EB period.
    e. Question: Does an individual who exhausts tier-one TEUC prior to 
the TEUC EB period ``on'' indicator qualify for the second tier of 
TEUC?
    Answer: No. A claimant who exhausts TEUC during an ``off'' 
indicator is not eligible for TEUC-X.
    f. Question: May individuals who have their base period wage 
credits canceled or who have had their regular maximum benefit amount 
reduced to one week establish a TEUC claim? If ``yes,'' what is the 
TEUC monetary based on?
    Answer: Yes. The individual's TEUC account is based on the original 
monetary determination before wage cancellation or benefit reduction. 
See Section III.5(b)(2)(C). The rationale for this position is that the 
individual's loss of regular compensation is the penalty. To base TEUC 
entitlement on a lesser redetermined amount (such as one week) would be 
tantamount to imposing a second penalty for the same disqualifying act. 
Whether or not the individual is immediately eligible for TEUC depends 
on the requalifying requirements imposed by state law.
    g. Question: If the calculation of the individual's TEUC monetary 
entitlement at 50 percent of regular monetary entitlement results in an 
amount (dollars and cents) requiring rounding, are state law rounding 
provisions followed?
    Answer: Yes. States are to round up or down in accordance with 
their laws.
    h. Question: My state's formula for determining the maximum benefit 
amount (MBA) for regular compensation is the lesser of 26 times the 
weekly benefit amount (WBA) or one-third of the base period wages 
credits. When an individual is unemployed due to a plant closing, my 
state pays up to 13 additional weeks of benefits by calculating the MBA 
payable for regular compensation plus the additional compensation as 
the lesser of 39 times the WBA or one-half of the base period wage 
credits. State law does not specifically define these benefits as

[[Page 57077]]

additional compensation. Are the plant closing benefits considered 
additional compensation for TEUC purposes?
    Answer: Yes. These benefits meet the definition of ``additional 
compensation'' (commonly called additional benefits) as defined at 20 
CFR 615.2(f) as benefits paid ``* * * by reason of other special 
factors. * * *'' As such, these benefits are excluded from use in the 
calculation of TEUC monetary entitlement and TEUC may be paid prior to 
these benefits. Section 202(b)(2), TEUCA, does not require, as a 
condition of TEUC eligibility, exhaustion of additional benefits.

5. Base Period Employment Requirement

    a. Question: Section 202(d)(2)(A) of the Act requires that the 
claimant have 20 weeks of full-time insured work or the equivalent in 
insured wages in order to qualify for TEUC (and TEUC-X, since it is 
based on TEUC). Is this the same as is required for EB?
    Answer: Yes. State law which satisfies the requirements of 
202(a)(5) of the Federal-State Extended Unemployment Compensation Act 
(EUCA) of 1970 satisfies this requirement.
    b. Question: The individual's base period employment and wages meet 
the requirement of 20 weeks of full-time work or its equivalent. The 
state's formula for calculating the weekly benefit amount allows weeks 
with low earnings to be excluded in the determination of the 
individual's weekly benefit amount. Does this individual's base period 
employment and earnings meet the requirements of section 202(d)(2)(A), 
TEUCA?
    Answer: Yes. Section 202(d)(2)(A), TEUCA requires the application 
of section 202(a)(5), EUCA, to the determination of TEUC entitlement. 
Section 202(a)(5), EUCA, requires an individual to have base period 
employment of 20 weeks of full-time work or its equivalent, as defined 
by state law, to qualify. It does not require all of the employment and 
wages to have been used in the determination of monetary entitlement of 
the applicable benefit year.
    c. Question: The individual has covered employment and wages in 
more than one state. The individual has established a benefit year 
based on wages from state A only because the base period wages from 
state B do not increase the weekly or maximum benefit amount. 
Therefore, no combined wage claim was established and state A returned 
the wages to state B. May state A use the information from the TC-IB4 
wage transfer, that it received from state B, as evidence of sufficient 
employment and wages in the base period of its claim to satisfy the 20-
weeks-of-full-time-work requirement or its equivalent for TEUC 
entitlement?
    Answer: Yes. Section 202(a)(5) of EUCA requires an individual to 
have a specified amount of base period employment and wages to qualify. 
It does not require all of the employment and wages to have been used 
in the determination of monetary entitlement of the applicable benefit 
year.
    d. Question: The individual has existing benefit years ending 
during or after the week of March 15, 2001, in more than one state. The 
applicable benefit year for TEUC is in state B. The employment and 
wages used in the monetary determination of the claim in state A meet 
the 20-weeks-of-work or equivalent requirement. The employment and 
wages used in the monetary determination of the TEUC ``applicable 
benefit year'' in state B do not meet the base period work requirement. 
May state B use information from state A, obtained via the Interstate 
Inquiry (IBIQ) or the combined wage program TC-IB4, to verify that the 
individual had sufficient out-of-state covered employment and wages in 
the base period of the claim in state B to satisfy the 20-weeks-of-work 
or equivalent requirement?
    Answer: Yes. Section 202(a)(5) of EUCA requires an individual to 
have a specified amount of base period employment and wages to qualify. 
It does not require all of the employment and wages to have been used 
in the determination of monetary entitlement of the applicable benefit 
year.

6. Seasonal Provisions/Between Terms Denial

    a. Question: Are employees of educational institutions who are 
denied regular benefits because of the between-and-within terms denial 
provisions eligible for TEUC?
    Answer: No. Section 3304(a)(6)(A) of the Federal Unemployment Tax 
Act requires, as a condition of participation in the Federal-State 
Unemployment Compensation program, that state law prohibit, under 
specified circumstances, the payment of benefits based on professional 
services performed for educational institutions during such periods. 
Under section 202(d)(2) of the Act, the terms and conditions of the 
State law, except where inconsistent with the Act or operating 
instructions, apply to claims for TEUC. Therefore, the same between and 
within terms denial provisions of state law apply to TEUC claims.
    b. Question: Under my state's seasonality provisions, all wage 
credits in the base period are used to determine monetary eligibility. 
However, for a seasonal worker, benefits based on seasonal wages may be 
paid only during the normal seasonal period. Is a seasonal worker, with 
a combination of seasonal and non-seasonal base period employment, who 
has exhausted all non-seasonal benefits and is currently ineligible for 
benefits based on seasonal employment considered an ``exhaustee'' for 
TEUC purposes?
    Answer: Yes. See Section III.5(b)(2)(B).
    c. Question: Under my state's seasonality provisions, benefits 
based on seasonal wages may be paid only during the normal seasonal 
period for which the seasonal wage credits were earned. Is a seasonal 
worker, whose monetary determination is based solely on seasonal wages 
and who is ineligible because of the seasonality provisions, considered 
an ``exhaustee'' for TEUC purposes?
    Answer: Yes. Section III.5.(b)(2)(B)

7. TEUC EB Period Trigger

    a. Question: Section 203(c)(2)(B) of the TEUC Act provides for 
using a modified section 203(d) of the EUCA to determine a state's TEUC 
EB period. Does section 203(f) of EUCA pertaining to the alternative 
total unemployment rate also apply and provide a higher TEUC MBA (i.e., 
20 times WBA) during periods of a ``High Unemployment Period''?
    Answer: No. If a state is in a TEUC EB period when a claimant 
exhausts his/her first TEUC award, the claimant will receive another 
TEUC award equal to the first amount. Under TEUC, a claimant can 
potentially receive 26 weeks of benefits which is greater than the 20 
week MBA payable during a ``High Unemployment Period.'' Additionally, 
TEUC does not reduce EB entitlement. Therefore, if, a claimant has 
exhausted all TEUC or TEUC-X, and a state is in an EB period triggered 
under the provisions of section 202(d) of the Act, unmodified, or 
section 202(f) of EUCA, the claimant may qualify for EB.
    b. Question: How are the TEUC-X EB period ``on'' and ``off'' dates 
determined?
    Answer: The TEUC EB period triggers ``on'' and ``off'' in the same 
manner as an EB period under EUCA. The TEUC EB period begins with the 
third week beginning after the week for which there is an ``on'' 
indicator and it ends with the ending of the second week that begins 
after the week of the ``off'' indicator.
    The TEUC Trigger notice shows all states that are in a TEUC EB 
period, which includes those in a regular EB period and those using the 
4 percent

[[Page 57078]]

trigger. The 13-week minimum duration of the TEUC EB period began for 
some states based on the 4 percent trigger prior to the enactment of 
the TEUC Act because of the way the trigger functions. If a state's 
insured unemployment rate falls below 4 percent, the TEUC EB period 
will end consistent with the beginning date shown.
    c. Question: Does the ending of the TEUC EB period result in the 
ending of TEUC-X payments in a state?
    Answer: No. Once an individual has been determined entitled to 
TEUC-X, the benefits are available through the end of the TEUC program. 
Whether a state is in a TEUC-EB period only affects whether the 
individual is entitled to an account augmentation of TEUC-X.
    d. Question: When an individual exhausts initial TEUC entitlement, 
what determines whether the balance in the individual's account is 
augmented by an amount equal to the amount of the initial TEUC maximum 
benefit amount?
    Answer: If a TEUC-X EB period is in effect during the week of 
unemployment for which the final payment of initial TEUC entitlement is 
made, the individual's TEUC account is augmented by an amount equal to 
the amount of the initial TEUC MBA. When a state is not in a TEUC-X EB 
period during such week, the individual is not entitled to TEUC-X.
    e. Question: When the balance in the individual's original TEUC 
account is less than the WBA and the individual qualifies for TEUC-X, 
is TEUC-X payable for that same week?
    Answer: Yes. Section 203(c)(1), TEUCA, provides that, ``if, at the 
time the individual's account is exhausted, such individual's state is 
in an extended benefit period * * *, then, such account shall be 
augmented by an amount equal to the original amount.'' [Emphasis 
added.] This provision provides for automatic replenishment of the TEUC 
account upon exhaustion. As a result, TEUC-X is payable for the week of 
exhaustion. If the state can accomplish augmentation of the account 
after payment authorization, that reduces the TEUC balance to zero and 
before check writing, the TEUC payment and the TEUC-X adjustment may be 
issued in a single check.

8. Work Search/Job Service Registration Requirements

    a. Question: Do the EB work search requirements apply to TEUC?
    Answer: No. The work search requirements of the state law apply.
    b. Question: Do state law provisions regarding able, available and 
actively seeking work apply to TEUC?
    Answer: Yes. Under section 203(a)(2), TEUCA, ``the terms and 
conditions of the state law which apply to claims for regular 
compensation and the payment thereof'' apply to TEUC.
    c. Question: For TEUC claims, my state plans to electronically 
reactivate prior work registrations and require the same number of job 
contacts as on the parent claim. Are these procedures inconsistent with 
any federal requirements?
    Answer: No. State law work search and employment service 
registration requirements apply to TEUC eligibility.

9. Adjudication of Issues Arising Subsequent to Exhaustion

    a. Question: If an exhaustee with an existing benefit year was 
separated from employment after exhaustion and before the effective 
date of the TEUC program, is the state required to adjudicate the 
separation issue?
    Answer: Yes.
    b. Question: My state adjudicates all separations from the 
beginning of the base period to the time a claim is filed. Does this 
provision of state law apply to TEUC claims?
    Answer: Yes. The state is expected to adjudicate all potentially 
disqualifying separations preceding and during the TEUC claim in 
accordance with state law applicable to claims for regular 
compensation.

10. TEUC Benefit Intercept

    a. Question: Are TEUC payments subject to child support intercept 
and similar levies and attachments?
    Answer: Yes. TEUC is an unemployment compensation program. As 
stated in 6.a. above, the terms and conditions of state law apply to 
TEUC, including intercepts and offsets, except where inconsistent with 
the Act or operating instructions.
    b. Question: What is the order of priority for deductions of 
pension, overpayment offset, child support and income taxes?
    Answer: The state will follow the same procedures that apply to 
regular compensation. The state will first determine the amount of UC 
that the individual is entitled to for a week. This means that receipt 
of deductible income, including retirement pay, will taken into account 
in determining the amount payable for the week. Next, the state must 
determine how much of the amount payable is to be deducted and withheld 
to satisfy overpayments, intercept child support, withholding of income 
taxes or other permissible purpose. The Department's position on the 
priority of withholding is stated in UIPL 17-95, Change 1:
    * * * amounts required to be withheld under state law must be 
withheld prior to any voluntary withholding requested by the claimants. 
The Department continues to leave to the state the matter of priorities 
among amounts that are required to be withheld.
    As a result, any overpayments or child support required to be 
withheld must be withheld prior to any withholding of income taxes.
    c. Question: May the state intercept and apply TEUC benefits to an 
established UI tax delinquency?
    Answer: No. Refer to UIPL Nos. 25-89 and 45-89.

11. Overpayments

    a. Question: Is the waiver of overpayment for equity and good 
conscience voluntary on the state's part or must the state have a 
program to consider equity and good conscience?
    Answer: The waiver provision is voluntary on the part of the state.
     b. Question: Does section 206(c)(2) of the Act prohibit the 
recovery of TEUC overpayments until the determination is final under 
state law?
    Answer: Yes.
    c. Question: May TEUC benefits be offset to recover state UI 
overpayments?
    Answer: Yes, if the state has a Cross-program Overpayment Offset 
Agreement with the Secretary, TEUC may be offset to recover state UI 
overpayments.
    d. Question: Must all offsets be 50 percent even if state law 
requires a 100% offset of benefits?
    Answer: No. The Act provides that the 50% limit applies only to 
offsets to recover TEUC. It does not apply to offsets of TEUC to 
recover State UI overpayments. Section 303(g) of the Social Security 
Act (cross-program offsets) has no 50% limit.
    e. Question: When state law does not contain an overpayment waiver 
provision, states may elect to waive non-fraudulent TEUC overpayments. 
Section IV.6.b.(2) lists the following three factors that must be 
considered in determining whether equity and good conscience exists. 
Whether: (1) The overpayment was the result of a decision on appeal; 
(2) the state gave notice that the individual may be required to repay 
the overpayment in the event of a reversal of the eligibility decision 
on appeal; and (3) whether recovery of the overpayment will cause 
financial hardship to the individual. Does this mean that a waiver may 
only be granted if all three conditions are met?
    Answer: No, but each factor should be considered.
    f. Question: During the Emergency Unemployment compensation program

[[Page 57079]]

during the early 1990s, states were advised to refer fraud cases to the 
USDOL Office of Inspector General (OIG) for prosecution under section 
1001 of Title 18 USC. Those cases referred were not prosecuted under 
the federal statute and resulted in cases that could have been 
prosecuted under state law not being prosecuted because the statute of 
limitations expired before the state was notified that federal 
prosecutions would not be pursued. How is USDOL going to handle 
prosecution of TEUC fraud overpayment?
    Answer: States should pursue TEUC fraud cases consistent with the 
way all other state and federal claims are handled. At this time, 
states should not refer individual cases to the USDOL-OIG. However, 
should the state suspect any multi-state or multi-claimant cases, these 
should be referred to the OIG.
    g. Question: If an individual has been overpaid TEUC and the amount 
of the overpayment exceeds the amount remaining in the TEUC account, 
may the offset percentage exceed 50 percent?
    Answer: No. The TEUCA provides that ``no single deduction'' to 
recover a TEUC overpayment ``may exceed 50 percent of the weekly 
benefit amount from which the deduction is made.''
    h. Question: Section 206(b), TEUCA, allows a state to waive certain 
TEUC overpayments if it determines that the payment of TEUC was without 
fault on the part of the individual and repayment would be contrary to 
equity and good conscience. Section IV. 6.b.(1) states that, if the 
state law contains waiver provisions for regular compensation, the 
state provisions may be applied to TEUC. The instructions do not 
require that the waiver criteria of the state provisions must conform 
to the waiver criteria set forth in section 6.b.(2). Additionally, 
Questions and Answers, 11.a. references the ``equity and good 
conscience'' criteria in stating that applying a waiver is voluntary on 
the part of the state. Does this mean that the state is precluded from 
applying its state law waiver provision unless it conforms to the 
``equity and good conscience'' requirements of section 206(b), TEUCA, 
and may only elect to apply the TEUC waiver criteria as provided 
Section IV.6.b(2)?
    Answer: No. A state is not precluded from applying its state law 
waiver provisions if they are, at a minimum, consistent with the 
requirements of section 206(b), TEUCA.
    i. Question: Are states required to use only benefit offsets to 
recover TEUC overpayments?
    Answer: No. A state is to use the full range of recovery tools 
applicable to regular compensation. See Section IV.6.b.(3).
    j. Question: When an individual has been overpaid TEUC, is the 
amount of the overpayment restored to the individual's TEUC account at 
the time the overpayment determination is issued or is it restored as 
it is recovered?
    Answer: The full amount of the recoverable overpayment is restored 
to the individual's account at the time the determination is issued. As 
a result, an individual may have an outstanding TEUC overpayment and 
still be eligible for a weekly payment, subject to the offset to 
recover the overpayment, as appropriate.
    k. Question: My state is considering adopting an administrative 
rule for waivers of TEUC overpayments. Section IV.6.b.(2)(C) sets out 
three factors which ``shall be considered'' by states in determining 
whether equity and good conscience exists. The first of these is 
``whether the overpayment was the result of a decision on appeal.'' 
Does this mean that if an overpayment is the result of a decision on 
appeal, that fact alone may be grounds for granting a waiver?
    Answer: Yes. Even though the state should consider all of the 
factors, if the individual's situation meets only one, it may 
constitute grounds for waiver.

12. Short-Time Compensation Program

    a. Question: May TEUC be paid to individuals participating in a 
short-time compensation (STC or worksharing) program?
    Answer: Yes. Nothing in the Act prohibits such payments. If an 
individual participating in an STC program is an exhaustee for TEUC 
purposes and is otherwise eligible, TEUC can be paid to the individual. 
It should be noted that the payment of TEUC to STC participants is 
unlikely to occur since (1) STC exhaustions do not occur with a high 
frequency and (2) an individual participating in an STC program whose 
benefit year has ended will have wages that must be used to establish, 
if possible, a new benefit year before any TEUC is payable.
    b. Question: Since my state limits an individual's participation in 
a STC program to 26 weeks, the individual could (1) continue to work 
the reduced work week under the STC plan, (2) be ineligible for STC, 
and (3) have a balance remaining on the regular claim. Is this person 
an exhaustee for TEUC purposes? If so, do we determine the amount 
payable each week using STC criteria or regular criteria? How is the 
individual's TEUC MBA calculated?
    Answer: This individual is an exhaustee for TEUC purposes because, 
even though a balance may remain on the claim, the individual has no 
rights to regular compensation. If the individual continues to work a 
reduced work week as provided under the STC plan, then TEUC is to be 
paid under the state law's terms and conditions pertaining to STC. 
However, if the individual no longer works the reduced work week under 
the STC plan, then the state's STC requirements will no longer be 
applicable and eligibility requirements for regular compensation apply. 
As a result, if a balance remains on the regular claim, the individual 
is no longer an exhaustee for TEUC purposes. The TEUC MBA is based on 
the MBA of regular compensation payable to the individual during the 
benefit year, even if the STC plan limits the amount payable during the 
STC plan, since the claimant could be laid off and be entitled to the 
total balance.
    c. Question: When regular benefits are paid to individuals 
participating in a ``work-sharing program,'' the criteria for earnings 
deductions is based on a percentage of the earnings instead of 
deducting earnings on a dollar-for-dollar basis as we do with regular 
claims. Does the STC deduction criteria apply to TEUC? If ``yes,'' does 
the state law provision that limits the number of weeks payable also 
apply to TEUC work-sharing benefits?
    Answer: Yes, to both questions. As stated in b. above, TEUC is to 
be paid under the state law's terms and conditions pertaining to STC.

13. Extensions for Approved Training

    a. Question: If a state has a special extension for individuals who 
exhaust regular compensation and are participating in approved 
training, may TEUC be paid to these individuals?
    Answer: Yes. For purposes of TEUC, these extended programs are 
considered additional benefits. Under the Act, TEUC is payable prior to 
any such additional benefits, because, under section 202(b)(2) of the 
Act, exhaustion of additional benefits is not required to qualify for 
TEUC.

14. Self-Employment Assistance

    a. Question: May TEUC be paid to individuals participating in a 
self-employment assistance (SEA) program?
    Answer: No. SEA is payable to individuals ``in lieu of'' regular UC 
section 3306(t)(1) of the Federal Unemployment Tax Act), which means 
they have not, in effect, exhausted regular compensation. As explained 
in UIPL 14-94, individuals who have exhausted regular UC are ineligible 
for SEA allowances. Individuals may not receive SEA allowances in lieu 
of

[[Page 57080]]

Federal-State extended benefits (EB), additional benefits (AB) entirely 
financed by the state, any wholly funded Federal extension of UC, or 
other types of compensation not meeting the definition of regular UC.
    However, if the individual has been terminated from or voluntarily 
left the SEA program, and if otherwise eligible, the individual may be 
paid TEUC since the individual is an exhaustee for TEUC qualifying 
purposes.
    b. Question: The response to question 14.a. states that an 
individual may not receive SEA allowance in lieu of any unemployment 
compensation except regular compensation. It also states that if an 
individual is terminated or voluntarily left the SEA program the 
individual may qualify for TEUC as an exhaustee. Does this mean that an 
individual may qualify for TEUC if the state officially terminates an 
individual's participation in the SEA program or an individual 
withdraws solely for purposes of removing a barrier to qualifying for 
TEUC?
    Answer: Section 3306(t)(6), FUTA, provides that a state SEA program 
must meet such ``requirements as the Secretary of Labor determines to 
be appropriate.'' Further, the purpose of the SEA program is to ``help 
speed the transition'' of workers ``back into the work force.'' (H. R. 
Rep. No. 361, Part 1, 103rd Cong. 1st Sess. 94 (1993), quoted in UIPL 
No. 14-94.) Therefore, consistent with the FUTA requirements, the state 
may, on its own motion, terminate an individual from its SEA program if 
the individual's efforts to establish himself/herself in self-
employment have failed. However, it may not terminate an individual 
simply to qualify that individual for TEUC.
    With respect to an individual withdrawing from a SEA program solely 
to qualify for TEUC: The same terms and conditions that apply to 
regular compensation apply to the payment of TEUC. Therefore, if an 
individual leaves the SEA program by abandoning self-employment, the 
state, to determine TEUC eligibility, will need to determine whether 
the individual meets state law eligibility requirements for regular 
compensation. Under state law it may be, for example, that the leaving 
of the self-employment (especially if the only reason given is to 
collect TEUC) itself is cause for ineligibility.
    c. Question: Do individuals who apply for admittance into the SEA 
program for the first time need to be notified that their participation 
will cause them to be ineligible for TEUC?
    Answer: No. The goal of the SEA program is that an individual will 
successfully develop the ability to work in self-employment. It is not 
necessary to advise new entrants that TEUC (or EB or any other benefit 
extensions) would not be available if this goal is successfully 
attained. If the goal of self-employment is not realized and the 
individual would otherwise be eligible under state law, the individual 
may be eligible for TEUC.

15. TEUC Effect on Trade Readjustment Assistance (TRA)

    a. Question: How does entitlement to TEUC affect the payment of 
basic TRA?
    Answer: During the first benefit period (See 20 CFR 20 617.3(h)) 
following the qualifying separation, a claimant is potentially entitled 
to 52 weeks of basic TRA minus regular, additional and extended 
compensation (including federally financed extensions). Therefore, 
entitlement to TEUC will reduce the basic TRA entitlement. In most 
cases, the application of this requirement will result in a worker 
receiving 26 weeks of regular benefits, followed by 13 weeks of TEUC, 
followed by 13 weeks of basic TRA for a total of 52 weeks of benefits. 
However, if the state is in an EB period, including one based on the 
substitution of ``4'' for ``5'' provided for in section 203(d)(1)(B) of 
EUCA, the claimant's basic TRA may be further reduced by the second 
tier of TEUC.
    b. Question: This state has a large number of claimants covered by 
TRA petitions. Some of the claimants have exhausted their regular 
benefits and are currently receiving TRA payments. Does the state have 
to set up TRA overpayments and go back and start these persons in TEUC 
and exhaust that prior to going to TRA?
    Answer: No. However, starting with the first week which begins 
after the state has a TEUC agreement, the state must suspend the 
payment of TRA until TEUC is exhausted and TEUC is deductible from TRA 
entitlement, as explained in 15.a. Further, the receipt of TRA will not 
reduce the TEUC MBA, because section 233(d) of the Trade Act (relating 
to the reduction of EB entitlement because of the receipt of TRA) does 
not apply to TEUC.
    c. Question: An individual exhausted regular benefits and has 
received 5 weeks of TRA. The individual meets the eligibility 
requirements for TEUC and the current week claimed began after the 
state's TEUC agreement became effective. Should this claimant continue 
to be paid TRA until exhaustion before being paid TEUC?
    Answer: No. Entitlement to TEUC requires that TRA be suspended. 
Upon exhaustion of TEUC the claimant may be entitled to resume TRA. For 
example, in this case, the claimant has received 26 weeks of regular 
benefits and 5 weeks of basic TRA. If the claimant is only eligible for 
13 weeks of TEUC, upon exhaustion he/she may resume receiving the 
remaining basic TRA payable, in this case 8 weeks. The total basic TRA 
payable is 52 weeks minus regular and extended benefits, including 
federally financed extensions.
    d. Question: The claimant has exhausted 26 weeks of regular 
benefits plus 26 weeks of basic TRA for a total of 52 weeks of basic 
TRA minus 26 weeks of regular benefits. The claimant otherwise meets 
the eligibility requirements for TEUC. Is this individual eligible for 
TEUC?
    Answer: Yes, if the individual meets all the TEUC eligibility 
requirements. See operating instructions. TRA reduces EB entitlement 
but not TEUC entitlement.
    e. Question: The claimant exhausted 26 weeks of regular benefits on 
a first claim and received 10 weeks of TRA. The claimant qualified for 
a second benefit year, therefore, the payment of TRA was suspended. The 
claimant has now exhausted all benefits available on the second claim 
and meets the requirements for TEUC. After exhaustion of TEUC, are TRA 
benefits payable?
    f. Answer: Yes, if the claimant meets all the TRA eligibility 
requirements. The claimant will have a TRA balance of 16 weeks. The TRA 
entitlement is not reduced by the amount of TEUC because the TEUC is 
not attributable to the first benefit period.
    g. Question: If TEUC is payable before TRA, will the length of the 
basic TRA eligibility period or the additional TRA eligibility period 
be lengthened?
    Answer: No. TEUC entitlement has no affect on the determination of 
the period of eligibility for TRA established under section 233(a)(2) 
of the Trade Act.
    h. Question: If a state mistakenly pays TRA instead of TEUC, may 
the state make a bookkeeping adjustment to correct the funding source 
instead of establishing a TRA overpayment, paying the individual TEUC 
for the same week(s), and recovering the TRA overpayment at 50 percent 
of the TEUC weekly benefit?
    Answer: Yes; the benefits paid were mischaracterized.
    i. Question: If an individual with an applicable benefit year for 
TEUC purposes is in training and is receiving up to 26 weeks of 
``additional'' TRA, must TEUC be paid before additional TRA?
    Answer: Yes. Entitlement to TEUC requires suspension of additional 
TRA the same as regular TRA. After

[[Page 57081]]

exhaustion of TEUC, the individual may resume eligibility for 
additional weeks of TRA, provided the fixed 26-consecutive weeks period 
for additional TRA has not elapsed. Additional TRA may not be paid 
beyond the fixed 26-consecutive weeks period.
    j. Question: An individual has received 26 weeks of regular 
benefits and 22 weeks of basic TRA prior to March 10, 2002. TRA 
payments are suspended and the individual receives 13 weeks of TEUC. 
Does a TRA overpayment exist because the combination of regular, TRA 
and TEUC exceed 52 weeks of benefits?
    Answer: No. Receipt of TEUC does not reduce the individual's TRA 
entitlement that was payable prior to the weeks of unemployment for 
which TEUC was payable. In this case, the individual was entitled to 52 
weeks of TRA less any unemployment compensation received. At the time 
of the TEUC application, the individual had received a total of 48 
weeks (26 UI and 22 out of 26 TRA). TRA was suspended and the 
individual received 13 weeks of TEUC. The remaining balance of four 
weeks of basic TRA is reduced to zero by the TEUC payment made for the 
weeks of unemployment for which TRA would have been payable in the 
absence of TEUC.
    Additionally, TRA does not reduce TEUC entitlement as section 
233(d) of the Trade Act only relates to a reduction of Federal-State 
Extended Benefits (EB) entitlement, not TEUC.
    k. Question: Section III.5.(e)(1) states that TEUC will reduce the 
``maximum amount of basic TRA payable * * *''; does this mean that 
states will have to issue a monetary redetermination of the basic TRA 
entitlement, or is there a special required notice to current TRA 
individuals when TRA is reduced by receipt of TEUC?
    Answer: TRA claimants must be provided with an appeal-able 
determination that reduces or eliminates the balance of basic TRA 
payable by an amount equal to TEUC paid or payable for weeks of 
unemployment prior to the exhaustion of basic TRA entitlement.
    l. Question: If an individual has received 26 weeks of UI and 26 
weeks of basic TRA, is the individual entitled to TEUC, if otherwise 
eligible?
    Answer: Yes. TRA is not deductible from TEUC. There-fore, TEUC is 
payable to the individual if all other eligibility requirements are 
met. TEUC does not retroactively cause the overpayment of basic TRA 
paid for weeks prior to weeks for which TEUC is payable.
    m. Question: If an individual that has been in training for the 
past year has received 26 weeks of regular benefits, 26 weeks of basic 
TRA and 13 weeks of TEUC, is the individual entitled to 26 weeks of 
Additional TRA?
    Answer: No. Although TEUC is not deductible from Additional TRA, 
the fixed 26 consecutive week period for which Additional TRA is 
payable begins upon the exhaustion of basic TRA. Therefore, the 
individual is only entitled to Additional TRA for the weeks remaining 
in the fixed 26 consecutive week eligibility period.
    n. Question: When an individual starts training after receiving 26 
weeks of regular benefits, 26 weeks of basic TRA and 13 weeks of TEUC, 
is the individual entitled to 26 weeks of Additional TRA?
    Answer: Yes. TEUC is not deductible from Additional TRA and the 
fixed 26 consecutive week period for which Additional TRA is payable 
begins with the week that the training begins.

16. Reporting Requirements

    a. Question: How will TEUC claims and benefit activity be reported?
    Answer: See the reporting instructions in Section VI.
    b. Question: Does the reference to entitlement type ``code 2'' for 
reporting on the ETA 5159 relate to the identification and reporting of 
nonmonetary determinations.
    Answer: No. This code identifies TEUC data, in field 28 as federal 
benefit extension, on the Liable-Agent Data Transactions (LADT) which 
is the record for the weekly interstate data exchange.
    c. Question: Do TEUC and TEUC-X benefit activity have to be 
reported separately?
    Answer: No. There is a single TEUC program.
    d. Question: When an individual exhausts TEUC first tier and 
qualifies for TEUC second tier, is the exhaustion of the first tier 
reported on the TEUC ETA 5159?
    Answer: No. Exhaustion of the initial TEUC monetary award is not a 
reportable exhaustion if the individual meets the requirements to 
receive TEUC-X. Therefore, when the state is in a TEUC-X period, only 
final payments that exhaust TEUC-X are reportable.
    e. Question: Is a separate SF-269 required for reporting TEUC 
administrative costs? If yes, when is the first report due?
    Answer: Yes. However, no SF-269 report will be required for the 
quarter ending March 31, 2002. The first report for TEUC is due after 
the end of the June 30, 2002, quarter. That report will cover the 
period March 9, 2002, through June 30, 2002.
    f. Question: How will states be reimbursed for administrative costs 
for the quarter ending March 31, 2002?
    Answer: Administrative costs for the quarter ending March 31, 2002, 
will be reimbursed after receipt of a modified UI-3 (Quarterly UI 
Contingency Report). Because of the large increase in workload, 
advances for TEUC administration for the June 2002 quarter are 
available. Instructions will be issued soon.
    g. Question: Are the ETA-2112 reporting requirements in UIPL No. 
17-02, Implementation and Operating Instructions, Section VI being 
changed? If yes, what are the revised requirements?
    Answer: Yes, the reporting requirements are being changed. All TEUC 
benefits will be reported on Line 39 of the ETA 2112. TEUC payments to 
former employees of reimbursable employers will not be reported on 
Lines 33, 34 and 35. TEUC UCFE and UCX payments will not be reported on 
Lines 36 and 43. In the ``comments'' section, the amount reported on 
Line 39 should be broken out on three lines as follows:
    (1) Regular--TEUC benefits paid to former employees of contributory 
employers.
    (2) Reimbursable, Federal, and Special Contributory--TEUC benefits 
paid to former employees of the federal government (UCFE and UCX), 
state and local government (contributory or non contributory) Section 
501(c)(3)employers (contributory or non contributory employers to which 
Section 3309(a)(1) of the Internal Revenue Code applies), and Indian 
Tribes (contributory or non contributory).
    (3) Expired Program Transations--any residual activity for expired 
federal benefit extension programs, e.g., recoveries of EUC 
overpayments.

17. Interstate Benefits/Combined Wage/ICON Applications

    a. Question: For combined wage claims, are paying states required 
to prepare and transmit a Report on Determination of Combined-Wage 
Claim, TC-IB5 and a Statement of Benefits Paid to Combined-Wage 
Individuals, TC-IB6, to transferring states on TEUC claims?
    Answer: No. Paying states are to charge all TEUC payments to the 
EUCA account. No TC-IB5s or TC-IB6s are to be sent to the transferring 
states.
    b. Question: Under interstate and combined wage procedures, when an 
individual is indefinitely disqualified under state A's law and has 
sufficient employment and wages to qualify under state B's law, the 
individual is allowed

[[Page 57082]]

to file against state B. When an individual has existing benefit years 
ending during or after the weeks of March 15, 2001, in state A and 
state B and is indefinitely disqualified in state B, does the 
individual have the option of filing TEUC using the claim in state A?
    Answer: No. Only the claim in state B meets the definition of an 
``applicable benefit year'' for TEUC purposes. (See Section II, Item 
4.)
    c. Question: Under EB rules, when the liable state is in an EB 
period, an individual residing in an agent state that is not in an EB 
period is eligible for only two weeks of EB payments. When the liable 
state elects to pay EB before TEUC, are the individuals filing from 
agent states that are not in an EB period or Canada considered 
exhaustees for TEUC purposes after the two weeks of EB have been paid?
    Answer: The two-week limitation found in Section 202(c), EUCA, does 
not apply to claims filed from Canada. If the state has elected to pay 
EB before TEUC, EB is payable to individuals filing from Canada if they 
are otherwise eligible. When an individual filing from Canada becomes 
an exhaustee, the individual will qualify for TEUC if all other 
qualifying requirements are satisfied.
    With respect to an individual filing from an agent state that is 
not in a regular EB period, that individual is an exhaustee for TEUC 
purposes after the two weeks of EB are paid. If the individual 
relocates to a state (agent or liable) that is in a regular EB period 
and EB is again payable, the individual ceases to be an exhaustee for 
TEUC purposes.

18. Claims Filed by Aliens

    a. Question: If an alien was eligible for UI on a regular claim, is 
the alien automatically eligible for TEUC?
    Answer: No. To qualify for TEUC, the individual must be a citizen, 
a non-citizen national, or a ``qualified alien.'' ``Qualified alien'' 
status must be verified through procedures of the state agency as 
applied to other federal unemployment compensation programs.

19. Application of Worker Profiling and Reemployment Services (WPRS) to 
TEUC Individuals

    a. Question: Are individuals filing for TEUC subject to selection 
and/or services under the Worker Profiling and Reemployment Services 
(WPRS) program?
    Answer: No. TEUC individuals do not have to be profiled; only 
individuals filing new claims for regular compensation must be 
profiled.

20. TEUC Eligibility for Individual Filing From Canada

    a. Question: May individuals filing from Canada qualify for TEUC?
    Answer: Yes. (See Q & A 17.c. above.)

21. TEUC and Benefit Accuracy Measurement (BAM) Sampling

    a. Question: Are TEUC claims included in the BAM survey population?
    Answer: No. TEUC weeks claimed or paid are not included in the BAM 
paid claims or denied claims samples. Refer to BAM State Operations 
Handbook, ET Handbook No. 395, Chapter III, pp. 12-15.

[FR Doc. 02-22385 Filed 9-5-02; 8:45 am]
BILLING CODE 4510-30-P