Fiscal Year (FY) 2004 Congressional Rescissions for WIA Adults and Dislocated Workers; Program Year (PY) 2004 Workforce Investment Act (WIA Allotments and Additional Funds From Dislocated Worker National Reserve for Adult/Dislocated Worker Activities for Eligible States; PY 2004 Wagner-Peyser Act Final Allotments; FY 2004 Work Opportunity Tax Credit and Welfare-to-Work Tax Credit Allotments

AGENCY:

Employment and Training Administration, Labor.

ACTION:

Notice.

SUMMARY:

This Notice announces FY 2004 Congressional Rescissions for WIA Adults and Dislocated Worker programs, states' allotments for PY 2004 (July 1, 2004-June 30, 2005) for WIA Title I Youth, Adults and Dislocated Worker programs; additional PY 2004 funding from the Dislocated Worker National Emergency Reserve for eligible states; final allotments for Employment Service (ES) activities under the Wagner-Peyser Act for PY 2004; and Work Opportunity Tax Credit and Welfare-to-Work Tax Credit allotments for FY 2004.

The WIA allotments for states and the final allotments for the Wagner-Peyser Act are based on formulas 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 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 for PY 2004 is the same as used for PY 2000 and is described in the section on Youth allotments. The data for all 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. This is the first year that 2000 census data is used in the allotment formula. Comments are invited upon the formula used to allot funds to the outlying areas.

DATES:

Comments must be received by April 26, 2004.

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: bailey.sherryl@dol.gov.

FOR FURTHER INFORMATION CONTACT:

WIA Youth Activities allotments: Haskel Lowery at 202-693-3608; WIA Adult and Dislocated Worker Employment and Training Activities allotments: Raymond Palmer at 202-693-3535; Employment Service final allotments: Anthony Dais at 202-693-2784 (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 allotments for PY 2004 (July 1, 2004-June 30, 2005) for Youth Activities, Adults and Dislocated Worker Activities, and Wagner-Peyser Act PY 2004 final allotments. This document provides information on the amount of funds available during PY 2004 to states with an approved WIA Title I and Wagner-Peyser 5-Year Strategic Plan and information regarding allotments to the outlying areas. The allotments are based on the funds appropriated in the Consolidated Appropriations Act, 2004, Public Law 108-199, January 23, 2004. This appropriation requires an across-the-board reduction of 0.59 percent to all FY 2004 discretionary programs, including FY 2004 advance funds for the WIA Adults and Dislocated Worker programs appropriated in the FY 2003 appropriation. Attached are tables listing the FY 2004 rescissions for the WIA Adults (Attachment II-A) and Dislocated Worker (Attachment III-A) programs and the PY 2004 allotments for programs under WIA Title I Youth Activities, Adults and Dislocated Workers Employment and Training Activities and the PY 2004 Wagner-Peyser Act final allotments. Also attached is a table displaying the FY 2004 Work Opportunity Tax Credit and Welfare-to-Work Tax Credit allotments.

Youth Activities Allotments. PY 2004 Youth Activities funds under WIA total $995,059,306 (no funds were appropriated for Youth Opportunity grants). Attachment I includes a breakdown of the Youth Activities program allotments for PY 2004 and provides a comparison of these allotments to PY 2003 Youth Activities allotments for all states, outlying areas, Puerto Rico and the District of Columbia. Before determining the amount available for states, the total available for the outlying areas was reserved at 0.25 percent of the full amount appropriated for Youth Activities. WIA section 127(b)(1)(B)(i)(IV) provides that the Freely Associated States (Marshall Islands, Micronesia, and Palau) are not eligible for funding for any program year beginning after September 30, 2001. However, section 3 of Public Law 106-504 (November 13, 2000), overrode the sections of WIA which terminated funding of the Freely Associated States for any fiscal year beginning after September 30, 2001, until negotiations on the Compact of Free Association were complete. On December 17, 2003, the President signed P. L. 108-188, the Compact of Free Association Amendments Act of 2003, which continues the availability of programs previously available to the Freely Associated States to the extent that such programs continue to be available to states. Therefore, the Freely Associated States will continue to receive funds for PY 2004. The methodology for distributing funds to all outlying areas is not specified by WIA, but is at the Secretary's discretion. The methodology used is the same as used since PY 2000, i.e., funds are distributed among the areas by formula based on relative share of 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 2004 formula were from 2000 census data from all outlying areas (the first year that 2000 census data has been used). The total amount available for Native Americans is 1.5 percent of the total amount for Youth Activities, in accordance with WIA section 127. After determining the amount for the outlying areas and Native Americans, the amount available for allotment to the States for PY 2004 is $977,645,768. This total amount was below the required $1 billion threshold specified in section 127(b)(1)(C)(iv)(IV); therefore, as in PY 2003, the WIA additional minimum provisions were not applied, and, 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 were used. Also, as required by WIA, the provision applying a 130-percent stop-gain of the prior year allotment percentage was used. The three formula factors required in WIA use the following data for the PY 2004 allotments:

(1) The number of unemployed for areas of substantial unemployment (ASU's) are averages for the 12-month period, July 2002 through preliminary June 2003;

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

(3) The number of economically disadvantaged youth (age 16 to 21, excluding college students and military) are from the 2000 Census. This is the first year that 2000 census data has been used in the allotment formula.

Adult Employment and Training Activities Allotments. The total Adult Employment and Training Activities appropriation is $898,890,800. Attachment II-B shows the PY 2004 Adult Employment and Training Activities allotments and comparison to PY 2003 allotments by state. Like the Youth Activities program, the total available for the outlying areas was reserved at 0.25 percent of the full amount appropriated for Adults. The Adult Activities funds for grants to all 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 Youth Activities. After determining the amount for the outlying areas, the amount available for allotments to the states is $896,643,573. Like the Youth Activities program, the WIA minimum provisions were not applied for the PY 2004 allotments because the total amount available for the states was below the $960 million threshold required for Adults in section 132(b)(1)(B)(iv)(IV). Instead, as required by WIA, the minimum allotments were calculated using 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. Also, like the Youth Activities program, a provision applying a 130 percent stop-gain of the prior year allotment percentage was used. The three formula factors use the same data as used for the Youth Activities formula, except that data from the 2000 Census for the number of economically disadvantaged adults (age 22 to 72, excluding college students and military) were used. This is the first year that 2000 census data has been used in the allotment formula.

Dislocated Worker Employment and Training Activities Allotments. The total Dislocated Worker appropriation is $1,454,419,116. The total appropriation includes formula funds for the states, while the National Reserve is used for National Emergency Grants, technical assistance and training, demonstration projects, and the outlying areas Dislocated Worker allotments. Attachment III-B shows the PY 2004 Dislocated Worker Activities fund allotments by state. Like the Youth and Adults programs, the total available for the outlying areas was reserved at 0.25 percent of the full amount appropriated for Dislocated Worker Activities. The Dislocated Worker Activities funds for grants to all outlying areas, for which the distribution methodology is at the Secretary's discretion, were distributed among the areas by the same pro rata share as the areas received for the PY 2004 WIA Adult Activities program, the same methodology used in PY 2003. For the state distribution of formula funds, the three formula factors required in WIA use the following data for the PY 2004 allotments:

(1) Number of unemployed, averages for the 12-month period, October 2002 through September 2003;

(2) Number of excess unemployed, averages for the 12-month period, October 2002 through September 2003; and

(3) Number of long-term unemployed, averages for calendar year 2002. Since the Dislocated Worker Activities formula has no floor amount or hold-harmless provisions, funding changes for states directly reflect the impact of changes in the number of unemployed.

Additional Funding From Dislocated Worker National Emergency Reserve for Adult /Dislocated Worker Activities for Eligible States. WIA Section 173(e) provides that up to $15 million from Dislocated Workers reserve funds is to be made annually to certain states that receive less funds under the WIA Adult formula than they would have received had the JTPA Adult formula been in effect. The amount of the grants is based on the difference between the WIA and JTPA formula allotments. Funds are available for grants for up to 8 states with the largest difference. The additional funding must be used for Adult or Dislocated Worker Activities.

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 a labor exchange program responding to the needs of the state's employers and workers through a system of local employment services offices that are part of the One-Stop service delivery system established by the state. Attachment V shows the Wagner-Peyser Act final allotments for PY 2004. 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 2003. State planning estimates reflect $18,000,000 being withheld from distribution to states to finance postage costs associated with the conduct of labor exchange services for PY 2004. 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.

Work Opportunity Tax Credit and Welfare-to-Work Tax Credit Programs: Grants to States. Total funding for FY 2004 is $20,740,902. Attachment VI shows the PY 2004 Work Opportunity Tax Credit and Welfare-to-Work Tax Credit (WOTC/WtW) grants by state. After reserving $580,745 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% stop-loss/120% stop-gain from the prior year allotment share percentage. The allocation formula is as follows:

(1) 50% based on each state's relative share of total FY 2003 certifications issued for the WOTC/WtW Tax Credit programs;

(2) 30% based on each state's relative share of the CLF for twelve months ending September 2003; and

(3) 20% based on each state's relative share of the adult recipients of Temporary Assistance for Needy Families (TANF) for FY 2002.