FY 2014 TAA second distribution and reserve fund requests

Accessible text PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2014/TEGL_1-14_Acc.pdf

CLASSIFICATION
      EMPLOYMENT AND TRAINING ADMINISTRATION              TAA
                  ADVISORY SYSTEM                         CORRESPONDENCE SYMBOL
             U.S. DEPARTMENT OF LABOR                     OTAA
                 Washington, D.C. 20210                   DATE
                                                          July 11, 2014


ADVISORY:       TRAINING AND EMPLOYMENT GUIDANCE LETTER NO: 1-14

TO:             STATE WORKFORCE AGENCIES
                STATE WORKFORCE LIAISONS
                AFFILIATE AMERICAN JOB CENTER MANAGERS
                COMPREHENSIVE AMERICAN JOB CENTER MANAGERS
                STATE WORKFORCE ADMINISTRATORS
                STATE AND LOCAL WORKFORCE BOARD CHAIRS AND DIRECTORS
                STATE LABOR COMMISSIONERS
                TRADE ADJUSTMENT ASSISTANCE LEADS

FROM:           PORTIA WU /s/
                Assistant Secretary

SUBJECT:        Second Distribution of Fiscal Year (FY) 2014 Trade Adjustment Assistance
                (TAA) Training and Other Activities Funds and the Process for Requesting
                TAA Program Reserve Funds

1. Purpose. To assist State Workforce Agencies or agencies designated by Governors as
“Cooperating State Agencies” (CSAs) (also jointly referred to as “states”) in administering the
TAA program by identifying the FY 2014 Second Distribution amounts to states and describing
the formula methodology the Department of Labor (Department or We) used to calculate these
amounts; and to describe the process for states to request TAA program reserve funds for
training, employment and case management services, job search allowances, relocation
allowances, and related state administration.

2. References.
   • Chapter 2 of Title II of the Trade Act of 1974, as amended (Pub. L. 93-618) (1974 Act, as
       amended, Trade Act);
   • Trade Adjustment Assistance Reform Act of 2002, Division A, Title I, Subtitle A of the
       Trade Act of 2002 (Pub. L. 107-210) (as amended by the Miscellaneous Trade and
       Technical Corrections Act of 2004, Pub. L. 108-429) (TAARA));
   • Trade and Globalization Adjustment Assistance Act of 2009, Division B, Title I, Subtitle
       I of the American Recovery and Reinvestment Act of 2009, (Pub. L. 111-5) (TGAAA);
   • Omnibus Trade Act of 2010 (Pub. L. 111-344) (Omnibus Trade Act);
   • Trade Adjustment Assistance Extension Act of 2011 (Pub. L. 112-40) (TAAEA);
   • Consolidated Appropriations Act, 2014 (Pub. L. 113-76);

                     RESCISSIONS                                   EXPIRATION DATE
                         None                                         Continuing

   •   Training and Employment Guidance Letter (TEGL) No. 11-02, Operating Instructions for
       Implementing the Amendments to the Trade Act of 1974 Enacted by the Trade Act of
       2002, and its Changes 1, 2, and 3;
   •   TEGL No. 2-03, Interim Operating Instructions for Implementing the Alternative Trade
       Adjustment Assistance (ATAA) for Older Workers Program Established by the Trade
       Adjustment Assistance Reform Act of 2002, and its Change 1 and 2;
   •   TEGL No. 22-08, Operating Instructions for Implementing the Amendments to the Trade
       Act of 1974 Enacted by the Trade and Globalization Adjustment Assistance Act of 2009
       and Change 2;
   •   TEGL No. 6-09, Instructions for Implementing the Revised 2010 Trade Adjustment
       Assistance Trade Activity Participant Report (TAPR);
   •   TEGL No. 10-11, Operating Instructions for Implementing the Amendments to the Trade
       Act of 1974 Enacted by the Trade Adjustment Assistance Extension Act of 2011 (TAAEA)
       and its Changes 1 and 2;
   •   TEGL No. 7-13, Operating Instructions for Implementing the Sunset Provisions of the
       Amendments to the Trade Act of 1974 Enacted by the Trade Adjustment Assistance
       Extension Act of 2011 (TAAEA or the 2011 Amendments);
   •   TEGL No. 12-13: Fiscal Year (FY) 2014 State Initial Allocations for Trade Adjustment
       Assistance (TAA) Training and Other Activities and the Process for Requesting TAA
       Program Reserve Funds; and
   •   20 CFR 618 Trade Adjustment Assistance, Subpart I.

3. Background. The states continue to operate four TAA programs under the Trade Act (the
2002 Program, the 2009 Program, the 2011 Program, and Reversion 2014) as established under
TAARA, TGAAA and the Omnibus Trade Act, and TAAEA, in accordance with the Operating
Instructions contained in TEGL No. 11-02 and its Changes, TEGL No. 02-03 and its Changes;
TEGL No. 22-08 and its Changes, TEGL No. 6-09, TEGL No. 10-11 and its Changes, and TEGL
No. 7-13. On February 7, 2014, after the Department received the full year appropriation under
Consolidated Appropriations Act, 2014, we issued TEGL No. 12-13 to announce the dollar
amounts of funds available to states for “Training and Other Activities” in FY 2014 Initial
Allocation.

TEGL No. 12-13 explained that the regulations codified at 20 Code of Federal Regulations
(CFR) 618.900 – 618.940 continue to govern the distribution of funds allocated for the purposes
of “Training and Other Activities,” which it defined as training, job search allowances, relocation
allowances, employment and case management services and related state administration costs, as
applicable under all four TAA programs operated by states during FY 2014.

TEGL No. 12-13 also explained that the regulations provide that 65 percent of the fiscal year
funds are to be distributed by formula when the appropriation for the full fiscal year is available.
The remaining 35 percent of the funds are held in reserve for later distribution or provided to
states in need of reserve funds. By July 15, 2014, at least 90 percent of the funds appropriated
for the entire fiscal year must be allocated. This Second Distribution is the subject of this TEGL.
No later than September 30, 2014, the Department will announce each state’s share of the
amount of funds, if any, that remain after distributions in response to reserve fund requests


received after the Second Distribution. Further, the process by which states may request reserve
funds during FY 2014 also is unchanged.

4. Second Distribution of FY 2014 Funds. In accordance with 20 CFR 618.930, at least 90
percent of the full FY 2014 appropriation will be distributed to states by July 15, 2014. We
derived the total amount of the FY 2014 Second Distribution by using 90 percent of the FY 2014
appropriation as the starting point. Next, we subtracted the sum of the Initial Allocation and all
accepted reserve fund requests received by the Department on or before June 1, 2014, from this
amount. The remaining amount is the total Second Distribution amount to be distributed by
formula to states, as announced in the Attachment of this TEGL. The Second Distribution of
funds will be distributed to those states that received an Initial Allocation in an amount greater
than their hold harmless amount, using the same methodology as used for the Initial Allocation
and according to the requirements set forth in 20 CFR 618.930 and explained below:


       •   20 CFR 618.930: Second distribution. The Department will distribute at least 90
           percent of the total training funds for a fiscal year to the States no later than July 15 of
           that fiscal year. The Department will first fund all acceptable requests for reserve
           funds filed before June 1. If there are any funds remaining to be distributed after
           these reserve fund requests are satisfied, those funds will be distributed to those States
           that received an Initial Allocation in an amount greater than their hold harmless
           amount, using the methodology described in § 618.910.

5. Funding Formula Application and the Process for Requesting Reserve Funds. The
Attachment to this TEGL provides the amounts of FY 2014 funds that we will distribute in the
Second Distribution, by state. These amounts were determined under the TAA funding formula
as described in 20 CFR 618.910(f) and below:

    A. TAA Formula Funds:
    1. Trend in number of workers covered by certifications during the most recent four
       consecutive calendar quarters for which data are available;
     2. Trend in number of workers participating in training during the most recent four
        consecutive calendar quarters for which data are available;
     3. Number of workers estimated to be participating in training during the fiscal year; and
     4. Estimated amount of funding needed to provide approved training to such workers
        during the fiscal year.
        Factor 1 will be established using the most recent four quarters (FY 2013 Quarter 2
        through FY 2014 Quarter 1) of data for certified workers by state, and the quarters will
        be weighted 40 percent; 30 percent; 20 percent; and 10 percent, respectively, from the
        most recent to the earliest quarter. This approach will establish a trend, giving the most
        recent quarters a greater impact on each factor than an earlier quarter.


   Factor 2 will be established using the most recent four quarters (FY 2013 Quarter 2
   through FY 2014 Quarter 1) of data for workers participating in training by state, and the
   quarters will be weighted 40 percent; 30 percent; 20 percent; and 10 percent,
   respectively, from the most recent quarter to least recent quarter. As with Factor 1, this
   approach will establish a trend, giving the most recent quarters a greater impact on each
   factor than an earlier quarter.

   Factor 3 will be determined by dividing the weighted average number of training
   participants for the state determined in Factor 2 by the sum of the weighted averages for
   all states and multiplying the resulting ratio by the projected national average of training
   participants for the fiscal year, using the estimates underlying the Department’s most
   recent budget submission or update.
   Factor 4 will be calculated by multiplying the estimated number of participants in Factor
   3 by the average training cost per participant in the state. The average training cost will
   be calculated by dividing total training expenditures for the most recent four quarters by
   the average number of training participants for the same period.
   Once each of the four factors have been determined for each state, under 20 CFR
   618.910(f)(3) all four factors will be assigned an equal weight. For FY 2014, the weight
   will be 25 percent of the total for each factor.
   20 CFR 618.910(c) includes a hold harmless provision. The regulation provides that a
   state’s Initial Allocation be at least 25 percent of the amount the state received in its
   Initial Allocation for the prior fiscal year.
   The Department will determine each state’s percentage of the national total for each
   factor. Using each state’s percentage of each of these weighted factors, we will
   determine the unadjusted percentage that the state will receive of the amount available
   for initial allocations.

B. TAA Program Reserve Funds: States may request reserve funds in accordance with 20
   CFR 618.920(b) before the distribution of the Initial Allocation, and at any other time
   during the fiscal year. States must use the Reserve Funding Request Form ETA-9117
   (OMB No. 1205-0275) to request these funds.

  To be eligible for TAA program reserve funds, a state must demonstrate that at least 50
  percent of TAA funds made available to that state in the current fiscal year and the two
  preceding fiscal years have been expended or that the state needs additional funds to meet
  unusual or unexpected events. A state requesting reserve funds must also provide a
  documented estimate of expected funding needs through the end of the fiscal year. States
  must base their estimate on an analysis that includes at least the following:

     • The average cost of training in the state;
     • The expected number of participants in Training and Other Activities through the end
       of the fiscal year; and
     • The remaining funds the state has available for Training and Other Activities.


6. Use of Funds. A state’s allocation of FY 2014 funds in this distribution may be used to pay
   the costs for the provision of Training and Other Activities, including costs of related state
   administration and employment and cases management services that states incur in the
   provision of these benefits and services. However, use of the FY 2014 funds is subject to the
   following restrictions:

       •   State Administration. As explained in TEGL No. 12-13, not more than 11.5 percent
           of a state’s allocation may be used for administration of the TAA programs. The
           definition of State Administration has not changed, and continues to include costs
           previously charged to this and includes the necessary and reasonable costs of
           administering Training and Other Activities, and may include the administrative costs
           associated with processing waivers of the training requirement, collecting, validating
           and reporting data, and providing Reemployment Trade Adjustment Assistance
           (RTAA) or Alternative Trade Adjustment Assistance (ATAA).

       •   Employment and Case Management Services. Under Section 235A(2) of the Trade
           Act, at least 5 percent of the FY 2014 funds a state receives must be used to provide
           employment and case management services to workers covered by petitions certified
           under the 2009 Program and the 2011 Program. Therefore, a state may use more than
           5 percent of its FY 2014 allocation to provide employment and case management
           services if it determines that greater funds are needed to provide such services to 2009
           Program and the 2011 Program participants in its state. FY 2014 funds may not be
           used to provide employment and case management to 2002 Program or Reversion
           2014 program participants. See TEGL No. 12-13 for further information on the
           restrictions on use of FY 2014 funds for employment and case management services.

7. Recapture of TAA Funds. Consistent with the FY 2014 TAA Annual Cooperative
Financial Agreement, the Department may recapture any funds distributed to any state in the
same fiscal year as they were appropriated if it determines that the state will not expend the
funds, but only after consultation with, and appropriate notification to, state officials.

8. Action Requested. CSAs are required to implement the guidance set forth herein and must
continue to administer the 2002 Program, the 2009 Program, the 2011 Program, and Reversion
2014 in accordance with applicable Operating Instructions referenced in section 2 above. CSAs
must inform all appropriate staff of the contents of this guidance.

9. Inquiries. CSAs should direct all inquiries to the appropriate ETA regional office.

10. Attachment. TAA FY 2014 Second Distribution Amounts by State.

Attachment: Trade Adjustment Assistance Fiscal Year (FY) 2014 Second Distribution Amounts by State

State | Allocation for Training and Other Activities | Admin Funding Amount (11.5%) | Case Management Funding Amount (5%)
Alabama | $772,117.00 | $88,793.46 | $38,605.85
Alaska | $27,076.00 | $3,113.74 | $1,353.80
Arizona | $494,724.00 | $56,893.26 | $4,736.20
Arkansas | $3,055,043.00 | $351,329.95 | $152,752.15
California | $2,334,100.00 | $268,421.50 | $16,705.00
Colorado | $759,623.00 | $87,356.65 | $37,981.15
Connecticut | $1,602,018.00 | $184,232.07 | $80,100.90
Delaware | - | - | -
District of Columbia | - | - | -
Florida | $1,000,877.00 | $115,100.86 | $50,043.85
Georgia | $1,430,124.00 | $164,464.26 | $71,506.20
Hawaii | $52,762.00 | $6,067.63 | $2,638.10
Idaho | $720,820.00 | $82,894.30 | $36,041.00
Illinois | $2,480,650.00 | $285,274.75 | $24,032.50
Indiana | $842,084.00 | $96,839.66 | $2,104.20
Iowa | $1,668,782.00 | $191,909.93 | $83,439.10
Kansas | $1,211,747.00 | $139,350.91 | $60,587.35
Kentucky | $1,570,433.00 | $180,599.80 | $78,521.65
Louisiana | $924,809.00 | $106,353.04 | $46,240.45
Maine | $715,135.00 | $82,240.53 | $35,756.75
Maryland | $2,056,025.00 | $236,442.88 | $102,801.25
Massachusetts | $1,863,810.00 | $214,338.15 | $93,190.50
Michigan | $6,495,652.00 | $746,999.98 | $324,782.60
Minnesota | $2,596,108.00 | $298,552.42 | $129,805.40
Mississippi | $105,202.00 | $12,098.23 | $5,260.10
Missouri | $1,757,237.00 | $202,082.26 | $87,861.85
Montana | $100,729.00 | $11,583.84 | $5,036.45
Nebraska | $339,927.00 | $39,091.61 | $16,996.35
Nevada | $79,237.00 | $9,112.26 | $3,961.85
New Hampshire | $280,780.00 | $32,289.70 | $14,039.00
New Jersey | $589,149.00 | $67,752.14 | $29,457.45
New Mexico | $585,813.00 | $67,368.50 | $29,290.65
New York | $4,382,862.00 | $504,029.13 | $219,143.10
North Carolina | $3,201,603.00 | $368,184.35 | $160,080.15
North Dakota | $95,521.00 | $10,984.92 | $4,776.05
Ohio | $3,207,171.00 | $368,824.67 | $160,358.55
Oklahoma | $642,670.00 | $73,907.05 | $32,133.50
Oregon | $2,745,764.00 | $315,762.86 | $137,288.20
Pennsylvania | $5,099,875.00 | $586,485.63 | $254,993.75
Puerto Rico | $208,790.00 | $24,010.85 | $10,439.50
Rhode Island | $315,815.00 | $36,318.73 | $15,790.75
South Carolina | $2,084,385.00 | $239,704.28 | $104,219.25
South Dakota | $85,242.00 | $9,802.83 | $4,262.10
Tennessee | $2,127,124.00 | $244,619.26 | $106,356.20
Texas | $4,620,412.00 | $531,347.38 | $231,020.60
Utah | $434,592.00 | $49,978.08 | $21,729.60
Vermont | $139,594.00 | $16,053.31 | $6,979.70
Virginia | $1,456,368.00 | $167,482.32 | $72,818.40
Washington | $2,653,172.00 | $305,114.78 | $132,658.60
West Virginia | $665,921.00 | $76,580.92 | $33,296.05
Wisconsin | $3,027,219.00 | $348,130.19 | $51,360.95
Wyoming | - | - | -
TOTAL | $75,706,693.00 | $8,706,269.70 | $3,785,334.65

1. The state Second Distribution amounts listed are in dollars, and were derived using the formula factors described in 20 CFR 618.910; these amounts include the amounts listed in the Administration and Case Management columns.
2. States may use not more than 11.5% of their FY 2014 allocation for Training and Other Activities for program administration. Amounts listed in this column are shown to illustrate the maximum amount of funds that may be used for state administration.
3. States may use not less than 5% their FY 2014 allocation for employment and case management services. Amounts listed in this column are shown to illustrate the minimum amount of funds that must be used for employment and case management services.