[Federal Register Volume 84, Number 65 (Thursday, April 4, 2019)]
[Notices]
[Pages 13319-13321]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-06558]


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DEPARTMENT OF LABOR

Employment and Training Administration


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

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

ACTION: Request for public comment.

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SUMMARY: The Bipartisan Budget Act of 2018, Public Law 115-123 (BBA), 
established permanent authorization for the RESEA program by adding 
Section 306 to Title III of the Social Security Act (SSA). DOL is 
seeking state and public comments/suggestions pursuant to Section 
306(f)(4), SSA, on how to allocate base funds for the RESEA program, as 
provided under Section 306(f)(1), SSA, and outcome payments, as 
provided under Section 306(f)(2), SSA.

DATES: Consideration will be given to all written comments received by 
May 6, 2019.

ADDRESSES: Questions on this notice and responsive comments related to 
RESEA program funding allocation can be submitted to the U.S. 
Department of Labor, Employment and Training Administration, Office of 
Unemployment Insurance, 200 Constitution Avenue NW, Room S-4524, 
Washington, DC 20210, Attention: Lawrence Burns, or by email at [email protected].

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

SUPPLEMENTARY INFORMATION: 

I. Introduction

    The federal-state Unemployment Insurance (UI) program is a required 
partner in the comprehensive, integrated workforce system. Individuals 
who have lost employment due to a lack of suitable work and have earned 
sufficient wage credits may receive UI benefits if they meet initial 
and continuing eligibility requirements. Since 2005, DOL and 
participating state workforce agencies have been addressing individual 
reemployment needs of UI claimants and working to prevent and detect UI 
improper payments through the voluntary UI Reemployment and Eligibility 
Assessment (REA) program and, beginning in fiscal year (FY) 2015, 
through the voluntary RESEA program.
    On February 9, 2018, the President signed the BBA, which included 
amendments to the SSA creating a permanent authorization for the RESEA 
program. These RESEA provisions are contained in Section 30206 of the 
BBA, enacting new Section 306 of the SSA. Section 306 also contains 
provisions for funding the RESEA program.
    The primary goals for the RESEA program are to: Improve employment 
outcomes for individuals that receive unemployment compensation (UC) 
and to reduce average duration of receipt of UC through employment; 
strengthen program integrity and reduce improper payments; promote 
alignment with the broader vision of the Workforce Innovation and 
Opportunity Act (WIOA), which is increased program integration and 
service delivery for job seekers; and establish RESEA as an entry point 
to other workforce system partner programs for individuals receiving 
UC. Core components of RESEA that must be included as part of the 
initial session with a claimant are:
     UI eligibility assessment, including review of work search 
activities, and referral to adjudication, as appropriate, if an issue 
or potential issue is identified;
     Providing labor market and career information that address 
the claimant's specific needs;
     Enrollment in Wagner-Peyser Act funded Employment 
Services;

[[Page 13320]]

     Providing support to the claimant to develop and implement 
an individual reemployment plan; and
     Providing information and access to American Job Center 
services and providing referrals to reemployment services and training, 
as appropriate, to support the claimant's return to work.
    In FY 2018, a total of 51 states and jurisdictions operated a RESEA 
program.

II. Background

    Of amounts appropriated for RESEAs, the BBA specifies three uses 
and designates the proportion of annual appropriations to be assigned 
to these uses: (1) Base funding (84 percent to 89 percent depending on 
the year) for states to operate the RESEA program, (2) outcome payments 
(10 percent to 15 percent of the appropriation depending on the year) 
designed to reward states meeting or exceeding certain criteria, and 
(3) up to one percent for the Secretary of Labor to use for research 
and technical assistance to states. With respect to the base funding, 
Section 306(f)(1)(A), SSA, states:
    In general.--For each fiscal year after fiscal year 2020, the 
Secretary shall allocate a percentage equal to the base funding 
percentage \1\ for such fiscal year of the funds made available for 
grants under this section among the States awarded such a grant for 
such fiscal year using a formula prescribed by the Secretary based on 
the rate of insured unemployment (as defined in section 203(e)(1) of 
the federal-State Extended Unemployment Compensation Act of 1970 (26 
U.S.C. 3304 note)) in the State for a period to be determined by the 
Secretary. In developing such formula with respect to a State, the 
Secretary shall consider the importance of avoiding sharp reductions in 
grant funding to a State over time.
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    \1\ The term ``base funding percentage'' as used here is a 
percentage of the funds appropriated for RESEA grants to operate the 
program in a fiscal year. Section 306(B) defines the base funding 
percentage for fiscal years 2021 through 2026 as 89 percent and for 
fiscal years after 2026 as 84 percent.
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III. Proposed Base Funding Methodology

    DOL is focused on developing a base funding formula that is 
relatively simple to understand; uses the state's insured unemployment 
rate (IUR) as the starting input variable, as required by law; 
incorporates other easily obtainable data; and is fair and equitable to 
state agencies in its application. After considering several options, 
DOL believes the approach that best satisfies the above-stated 
objectives is one that converts the states' IUR into a measure of new 
beneficiaries. New beneficiaries, or claimants establishing new benefit 
years and receiving first payments, reflect newly unemployed claimants 
and encompasses the target population served by RESEAs.
    The proposed formula multiplies the IUR for the 12-month period 
ending June 30 preceding the fiscal year for which funding is to be 
allocated by the average covered employment used to calculate a state's 
IUR during the same period. The resulting insured unemployment levels 
are then multiplied by 52 and divided by the ratio of weeks claimed to 
first payments. Each state's proportion of total first payments for all 
states is then multiplied by the amount appropriated for base funding 
grants. The result is the amount that DOL will make available to the 
state as its base funding grant subject to the possible modifications 
described below.
    The statutory language requires the Secretary to ``consider the 
importance of avoiding sharp reductions in grant funding to a state 
over time.'' To satisfy this requirement, DOL proposes a hold-harmless 
provision similar to that used for base allocations for UI 
administration (i.e., no state's funding will be reduced from one 
fiscal year to the next by more than five percent, with the resources 
needed to prevent sharper declines obtained by reducing funding to 
those states gaining the most in the calculation).
    Finally, while attempting to distribute resources sufficient to 
administer one 12-month period's level of RESEA activity and 
recognizing that the statutory language appropriating these funds 
allows for obligation beyond the fiscal year in which they are 
appropriated, DOL is proposing to permit carry over balances of 25 
percent from one year to the next. State agencies carrying over amounts 
in excess of 25 percent will have the excess amount reduced from the 
subsequent year's allocation, and those additional resources will be 
included in the distribution to states that are under the 25 percent 
threshold.

IV. Outcome Payments

    Section 306(f)(2)(A), SSA, requires DOL to make ``outcome 
payments'' to states that meet or exceed the outcome goals for reducing 
the average duration of receipt of UC by improving employment outcomes. 
Specifically, 306(f)(2)(A) states:
    IN GENERAL.--Of the amounts made available for grants under this 
section for each fiscal year after 2020, the Secretary shall reserve a 
percentage equal to the outcome reservation percentage \2\ for such 
fiscal year for outcome payments to increase the amount otherwise 
awarded to a State under paragraph (1). Such outcome payments shall be 
paid to States conducting reemployment services and eligibility 
assessments under this section that, during the previous fiscal year, 
met or exceeded the outcome goals provided in subsection (b)(1) related 
to reducing the average duration of receipt of unemployment 
compensation by improving employment outcomes.
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    \2\ Section 306(f)(2)(B), SSA defines the ``outcome reservation 
percentage'' as 10 percent for fiscal years 2021 through 2026 and 15 
percent for fiscal years thereafter.
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The referenced subsection (b)(1) states that one of the goals of the 
program is ``[t]o improve employment outcomes of individuals that 
receive unemployment compensation and to reduce the average duration of 
receipt of such compensation through employment.''
    DOL will publish a separate Federal Register Notice (FRN) proposing 
RESEA performance measures that will be used to determine eligibility 
for outcome payments. These measures will be based on the data sources 
identified below. It is DOL's intent to distribute funds reserved for 
outcome payments to eligible states using the same formula methodology 
applied to the base funding.
    It is also DOL's intent to continue current RESEA data collections, 
including the ETA 9128, Reemployment Services and Eligibility 
Assessment Workload, and ETA 9129, Reemployment Services and 
Eligibility Assessment Outcomes. Additional information about RESEA 
participants, who are required to be co-enrolled with the Wagner-Peyser 
Act Employment Service, will be collected and reported through the WIOA 
Common Performance Reporting System, ETA 9172, Participant Individual 
Record Layout. This information is submitted through ETA's Workforce 
Integrated Performance System (WIPS). For more information about WIPS, 
please visit: https://www.doleta.gov/performance/wips/.

V. Questions for Consideration

    Section 306(f)(4), SSA, requires consultation with the states and 
the public in developing the allocation formula for base funding and 
the criteria for making the outcome payments. It also requires that the 
allocation formula for base funding and outcome payment criteria be 
made publicly available. To provide an opportunity for states and the 
public to submit comments and input regarding the base funding

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allocation and outcome payments criteria of RESEA funds to states, ETA 
is publishing this FRN. Below are questions commenters may wish to 
consider in responding to this FRN; however, responses are not limited 
to the suggested questions. Respondents are free to provide any input 
related to RESEA program funding cited in Section 306, SSA.
     What are operational concerns about the RESEA program that 
the Secretary should consider in developing the funding formula?
     Do you have an alternative recommendation for calculating 
the base allocation?
     Do you have recommendations for distributing the outcome 
payments?
     What specific concerns or suggestions do you have 
regarding the DOL proposed formula, set out in this FRN for allocating 
RESEA funding?
     What general concerns do you have regarding RESEA 
administrative funding?
    Individuals wishing to provide comments, suggestions, and responses 
related to this FRN and concerning RESEA program funding must submit 
them by following the instructions set out in the ADDRESSEE section 
above. Submitted comments will be a matter of public record and posted 
on the internet, without redaction. DOL encourages commenters not to 
include personally identifiable information, confidential business 
data, or other sensitive statements/information in any comments.

Molly E. Conway,
Acting Assistant Secretary for Employment and Training, Labor.
[FR Doc. 2019-06558 Filed 4-3-19; 8:45 am]
 BILLING CODE 4510-FW-P