06-3483. Fiscal Year (FY) 2006 Congressional Rescissions for Workforce Investment Act (WIA) Adults and Dislocated Workers; Program Year (PY) 2006 WIA Planning Estimates for Adult Activities and Youth Activities; PY 2006 Allotments for Dislocated ...

AGENCY:

Employment and Training Administration, Labor.

ACTION:

Notice.

SUMMARY:

This Notice announces FY 2006 Congressional rescissions for the WIA Adult and Dislocated Worker programs; planning estimates for PY 2006 (July 1, 2006-June 30, 2007) for the WIA Youth and Adult programs; allotments for the PY 2006 for the WIA Dislocated Worker program; final allotments for Employment Service (ES) activities under the Wagner-Peyser Act for PY 2006; Workforce Information Grants for PY 2006; and Work Opportunity Tax Credit and Welfare-to-Work Tax Credit allotments for FY 2006.

The WIA allotments for states and the final allotments for the Wagner-Peyser Act are based on provisions defined in their respective statutes. The WIA allotments for the outlying areas are based on a formula determined by the Secretary. As required by WIA section 182(d), on February 17, 2000, a Notice of the discretionary formula for allocating PY 2000 funds for the outlying areas American Samoa, Guam, Northern Marianas, Palau, and the Virgin Islands) was published in the Federal Register at 65 FR 8236 (February 17, 2000). The rationale for the formula and methodology was fully explained in the February 17, 2000, Federal Register Notice. The formula methodology for PY 2006 is the same as that used for PY 2000 and is described in the section on youth allotments. The data for the outlying areas was obtained from the Bureau of the Census and was based on 2000 census surveys for those areas conducted either by the Bureau or the outlying areas. Comments are invited upon the formula used to allot funds to the outlying areas.

DATES:

Comments must be received by May 12, 2006.

ADDRESSES:

Submit written comments to the Employment and Training Administration, Office of Financial and Administrative Management, 200 Constitution Ave., NW., Room N-4702, Washington, DC 20210, Attention: Ms. Sherryl Bailey, 202-693-2813 (phone), 202-693-2859 (fax), e-mail: [e-mail].

FOR FURTHER INFORMATION CONTACT:

WIA Youth Program allotments: Haskel Lowery at 202-693-3030 or LaSharn Youngblood at 202-693-3606; WIA Adult and Dislocated Worker Employment and Training Activities allotments: Raymond Palmer at 202-693-3535; and Employment Service final allotments: Anthony Dais at 202-693-3046 (these are not toll-free numbers). Information may also be found at the Web site: http://www.doleta.gov.

SUPPLEMENTARY INFORMATION:

The Department of Labor (DOL or Department) is announcing WIA planning estimates for PY 2006 (July 1, 2006—June 30, 2007) for Youth Activities and Adult Activities, allotments for PY 2006 WIA Dislocated Worker Activities, and Wagner-Peyser Act PY 2006 final allotments, as well as the PY 2006 Workforce Information Grants and FY 2006 Work Opportunity Tax Credit and Welfare-to-Work Tax Credit allotments. This document provides information on the amount of funds to be available during PY 2006 to states with an approved WIA Title I and Wagner-Peyser 2-Year Strategic Plan (formally the 5-Year Strategic Plan) and information regarding allotments to the outlying areas. The allotments are based on the funds appropriated in the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2006, Public Law 109-149, December 30, 2005. The Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006, Public Law 109-148, Division B, Title III, Chapter 8 (December 30, 2005), required a government-wide reduction of 1.0 percent to all FY 2006 discretionary programs, including FY 2006 advance funds for the WIA Adult and Dislocated Worker programs appropriated in the FY 2005 appropriation. Attached are tables listing the rescissions to the FY 2006 advance funds for the WIA Adult (Attachment II-A) and Dislocated Worker (Attachment III-A) programs. Also attached are tables displaying the PY 2006 planning estimates for WIA Title I Youth Activities (Attachment I) and Adult Activities (Attachment II-B), PY 2006 allotments for Dislocated Worker Activities (Attachment III-B) and PY 2006 Wagner-Peyser Act final allotments (Attachment IV), PY 2006 Workforce Information Grants (Attachment V) and FY 2006 Work Opportunity Tax Credit and Welfare-to-Work Tax Credit allotments (Attachment VI).

Youth Activities Planning Estimates. Total funding for PY 2006 WIA Youth Activities is $940,500,000. Attachment I includes a breakdown of the Youth Activities state planning estimates for PY 2006 for all states and outlying areas. In accordance with WIA section 127, before determining the amount available for states, the amount available for the outlying areas was reserved at 0.25 percent, or $2,351,250 of the total amount appropriated for Youth Activities, and 1.5 percent, or $14,107,500, was reserved for Native Americans.

The methodology for distributing funds among outlying areas is not specified by WIA, but is at the Secretary's discretion. The methodology used is the same as that used since PY 2000, i.e., funds are distributed among the remaining areas by formula based on the relative share of the number of unemployed, a 90 percent hold-harmless of the prior year share, a $75,000 minimum, and a 130 percent stop-gain of the prior year share. Data for the relative share calculation in the PY 2006 formula were from 2000 census data from all outlying areas. The Marshall Islands and Micronesia no longer receive WIA Title I funding pursuant to Public Law 108-188, Compact of Free Association Amendments of 2003, (December 17, 2003); instead, these areas now receive funding from the Department of Education appropriation. The Compact also provides that Palau will continue to receive funding through September 2007 under WIA Title I funding provisions.

After determining the amount for the outlying areas and Native Americans, the amount available for allotment to the states for PY 2006 is $924,041,250. The three factors required in WIA for the Youth Program state allotment formula use the following data for the PY 2006 allotments:

(1) Number of unemployed for areas of substantial unemployment (ASUs), averages for the 12-month period, July 2004 through preliminary June 2005;

(2) Number of excess unemployed individuals or the ASU excess unemployed individuals (depending on which is higher), averages for the same 12-month period used for ASU unemployed data; and

(3) Number of economically disadvantaged youth (age 16 to 21, excluding college students and military), 2000 Census.

The computation of full state allotments for the youth program is delayed while states identify their ASU data for the PY 2006 allotments under revised guidance issued by the Employment and Training Administration (ETA). The states' initial identification of the PY 2006 ASUs was based on guidance from ETA and the Bureau of Labor Statistics (BLS) that did not allow the use of 2000 decennial census data because of problems identified by the Bureau of Census. An analysis of the initial state PY 2006 ASU data by ETA revealed a significant impact on state funding that was very likely due to the methodology rather than changes in unemployment. As a result of this analysis and consideration of concerns raised by several states, ETA has issued revised instructions to states to identify ASUs using the only data satisfactory to ETA for this purpose, the 1990 census data, albeit dated. Since revised ASU data are not available in time to compute youth allotments before the April 1, 2006, availability of funds, states are initially receiving amounts based on the minimum amounts states are guaranteed under the WIA formula minimum provisions, described below.

Since the total amount available for states in PY 2006 is below the required $1 billion threshold specified in WIA Section 127(b)(1)(C)(iv)(IV), similar to PY 2005, the WIA additional minimum provisions are not applicable. Instead, as required by WIA, the JTPA section 262(a)(3) (as amended by section 701 of the Job Training Reform Amendments of 1992) minimums of 90 percent hold-harmless of the prior year allotment percentage and 0.25 percent state minimum floor are applicable. Consistent with these minimum provisions, states will receive amounts equivalent to the higher of: 90 percent of their prior year allotment percentage applied to the PY 2006 total funds available for states, or, if higher, 0.25 percent of the PY 2006 total funds available for states. When revised ASU data are submitted by states and certified by BLS, full formula allotments for the states for the WIA Youth program will be calculated and announced in the Federal Register, and eligible states will receive their remaining formula funds.

Adult Employment and Training Activities Planning Estimates. The total Adult Employment and Training Activities appropriation is $864,198,640. Attachment II-B shows the PY 2006 Adult Activities planning estimates by state. Like the Youth program, the total available for the outlying areas was reserved at 0.25 percent, or $2,160,497 of the full amount appropriated for adults. As discussed in the Youth Activities paragraph, beginning in PY 2006, WIA funding for the Marshall Islands and Micronesia is no longer provided; instead, their funding is provided in the Department of Education's appropriation. The Adult program funds for grants to the remaining outlying areas, for which the distribution methodology is at the Secretary's discretion, were distributed among the areas by the same principles, formula and data as used for outlying areas for the Youth program. After determining the amount for the outlying areas, the amount available for allotments to the states is $862,038,143. The three factors for the Adult program state allotment formula use the same data as used for the Youth program formula, except that data for the number of economically disadvantaged adults (age 22 to 72, excluding college students and military) are used. As described above for the Youth program, the computation of the full state Adult program allotments is delayed while states identify their ASU data for the PY 2006 allotments under revised guidance issued by ETA. Should final allotments not be announced before July 1, ETA will initially provide amounts based on the minimum amounts states are guaranteed under the WIA formula minimum provisions, described below.

Since the total amount available for the Adult program for states in PY 2006 is below the required $960 million threshold specified in WIA Section 132(b)(1)(B)(iv)(IV), similar to PY 2005, the WIA additional minimum provisions are not applicable. Instead, as required by WIA, the JTPA section 202(a)(3) (as amended by section 701 of the Job Training Reform Amendments of 1992) minimums of 90 percent hold-harmless of the prior year allotment percentage and 0.25 percent state minimum floor are applicable. Consistent with these minimum provisions, states will receive amounts based on the higher of: 90 percent of their prior year allotment percentage applied to the PY 2006 total funds available for states, or, if higher, 0.25 percent of the total PY 2006 funds available for states. When revised ASU data are submitted by states and certified by BLS, full formula allotments for the states for the WIA Adult program will be calculated and announced in the Federal Register, and eligible states will receive their remaining formula funds.

Dislocated Worker Employment and Training Activities Allotments. The total Dislocated Worker appropriation is $1,471,903,360. The total appropriation includes $1,189,811,360 in formula funds for the states and $282,092,000 for the National Reserve for the National Emergency Grants, technical assistance and training, demonstration projects (including Community-Based Job Training Grants), the outlying areas' Dislocated Worker allotments, and additional assistance to eligible states. Attachment III-B shows the PY 2006 Dislocated Worker Activities fund allotments by state. Like the Youth and Adult programs, the total available for the outlying areas was reserved at 0.25 percent, or $3,679,758 of the full amount appropriated for Dislocated Worker Activities. WIA funding for the Marshall Islands and Micronesia is no longer provided, as discussed above. The Dislocated Worker program funds for grants to outlying areas, for which the distribution methodology is at the Secretary's discretion, were distributed among the remaining areas by the same pro rata share as the areas received for the PY 2006 WIA Adult Activities program, the same methodology used in PY 2005. For the state distribution of formula funds, the three formula factors required in WIA use the following data for the PY 2006 allotments:

(1) Number of unemployed, averages for the 12-month period, October 2004 through September 2005;

(2) Number of excess unemployed, averages for the 12-month period, October 2004 through September 2005; and

(3) Number of long-term unemployed, averages for calendar year 2004.

Since the Dislocated Worker program formula has no floor amount or hold-harmless provisions, funding changes for states directly reflect the impact of changes in the number of unemployed.

Wagner-Peyser Act Final Allotments. The Employment Service program involves a Federal-state partnership between the U.S. Department of Labor and the state workforce agencies. Under the Wagner-Peyser Act, funds are allotted to each state to administer core employment and workforce information services that respond to the needs of the state's employers and workers through the One-Stop service delivery system established by the state. Total funds appropriated for the Employment Service program allotments is $815,882,860. Attachment IV shows the Wagner-Peyser Act final allotments for PY 2006 for states and outlying areas. These final allotments have been produced using the formula set forth at Section 6 of the Wagner-Peyser Act, 29 U.S.C. 49e. They are based on averages of the civilian labor force (CLF) and unemployment for Calendar Year 2005. State planning estimates reflect $18 million being withheld from distribution to states to finance postage costs associated with the conduct of employment services for PY 2006. The Secretary of Labor is required to set aside up to three percent of the total available funds to assure that each state will have sufficient resources to maintain statewide Employment Service activities, as required under section 6(b)(4) of the Wagner-Peyser Act. In accordance with this provision, the three percent set-aside funds are included in the total planning estimate. The set-aside funds are distributed in two steps to states that have lost in relative share of resources from the previous year. In Step 1, states that have a CLF below one million and are also below the median CLF density are maintained at 100 percent of their relative share of prior year resources. All remaining set-aside funds are distributed on a pro-rata basis in Step 2 to all other states losing in relative share from the prior year but not meeting the size and density criteria for Step 1. Under section 7 of the Wagner-Peyser Act, ten percent of the total sums allotted to each state shall be reserved for use by the Governor to provide performance incentives for ES offices; services for groups with special needs; and for the extra costs of exemplary models for delivering job services.

Workforce Information Grants. Total PY 2006 funding for Workforce Information Grants to states is $33,180,000. The allotment figures for each state are listed in Attachment V. Funds are distributed by administrative formula, with a reserve of $962,200 for postage and $177,323 for Guam and the Virgin Islands. The remaining funds are distributed to the states with 40 percent distributed equally to all states and 60 percent distributed on each state's share of CLF for the 12 months ending September 2005.

Work Opportunity Tax Credit and Welfare-to-Work Tax Credit Programs: Grants to States. Total funding for FY 2006 is $17,677,440. Attachment VI shows the PY 2006 Work Opportunity Tax Credit and Welfare-to-Work Tax Credit (WOTC/WtW) grants by state. After reserving $512,646 for postage and $20,000 for the Virgin Islands, funds are distributed to states by administrative formula with a $64,000 minimum allotment and a 95 percent stop-loss/120 percent stop-gain from the prior year allotment share percentage. The allocation formula is as follows:

(1) 50 percent based on each state's relative share of total FY 2005 certifications issued for the WOTC/WtW Tax Credit programs;

(2) 30 percent based on each state's relative share of the CLF for twelve months ending September 2005; and

(3) 20 percent based on each state's relative share of the adult recipients of Temporary Assistance for Needy Families (TANF) for FY 2004.

Signed at Washington, DC, this 6th day of April, 2006.

Mason M. Bishop,

Deputy Assistant Secretary for Employment and Training.