02-17846. Workforce Investment Act, 1998; Supplemental Appropriation Act, 2001

AGENCY:

Employment and Training Administration, Labor.

ACTION:

Notice of Secretary's determination of the revised Program Year (PY) 2001 allotments for Dislocated Worker Activities.

SUMMARY:

Public Law 107-20 Title II Chapter 7, the Supplemental Appropriation Act, 2001, rescinds $177.5 million from the dislocated worker program for PY 2001. The Act calls for a reduction of $110 million (8.6 percent of the amount previously appropriated) from the formula program and $67.5 million (21.2 percent of the amount previously appropriated) from the Secretary's national reserve account. The level of funding for the dislocated worker program is reduced to $1.413 billion due to the rescission. The Act requires the Secretary to implement the rescission based on each state's share of unexpended balances as of June 30, 2001. The procedures for implementing the rescission were provided in Training and Employment Guidance Letter (TEGL) 3-01, “PY 2001 Changes in Dislocated Worker and Youth Funds,” dated August 16, 2001. This guidance letter was amended September 28, 2001 (“Change 2”). TEGL 3-01 stated that the rescission would take effect after additional time for review and analysis of expenditure reports on the dislocated worker program. TEGL 26-01 provided states advance notice of the Secretary's planned determination for the revised PY 2001 allotments for dislocated worker activities.

EFFECTIVE DATE:

This notice is effective July 16, 2002.

FOR FURTHER INFORMATION CONTACT:

Ms. Shirley M. Smith, Administrator, U.S. Department of Labor, Office of Adult Services, Employment and Training Administration, Room N-5426, 200 Constitution Avenue, NW., Washington, DC Telephone [phone]; Fax [phone].

SUPPLEMENTARY INFORMATION:

TEGL 26-01, change 1 provided the states revised PY 2001 allotments for the dislocated worker program under Workforce Investment Act (WIA) Title I. The revised allotments are the result of the reduction of $110 million from the formula program. An additional $67.5 million is rescinded from the Secretary's national reserve account in PY 2001 as required by Public Law 107-20. The outlying areas, which are funded from the Secretary's dislocated worker program national reserve account, will have a reduction of $443,750 in available competitive funds for PY 2001.

The Secretary has made her determination as required by Public Law 107-20 (“Act”). The Act requires the Secretary to reduce the level of funding for states” formula funds for dislocated worker program activities by $110 million and the Secretary's national reserve account by $67.5 million. The attached table shows the revised funding levels for each state as a result of the rescission.

WIA section 132(c) requires the Secretary to conduct reallotment of dislocated worker formula funds based on state financial reports submitted at the end of the program year. The procedures the Secretary uses for recapture and reallotment of funds are described in WIA regulations at 20 CFR 667.150. As stated in TEGLs 12-00 and 5-99, it was intended that the first reallotment of funds under WIA would be in PY 2001 based on obligations of PY 2000 funds. Due to the rescission, the Secretary has determined that reallotment will not apply in PY 2001 based on our review of the rescission language in Public Law 107-20 (Supplemental Appropriation Act, 2001).

Notice of Obligation (NOO) for each State's dislocated worker program was adjusted to reflect the reduction in the level of funding required by the rescission. The adjustment of funds covers NOOs for PY 2001 (July 1 to June 30) allotments.

Attachment A provides the results of the Secretary's determination in a chart showing PY 2001 Dislocated Worker Activities State Allotments and Attachment B shows the Dislocated Worker State Formula PY 2001 Rescission Methodology.

Attachments

Signed at Washington, DC July 9, 2002.

Shirley M. Smith,

Administrator, Office of Adult Services.