2010 TAA initial allocations and reserve funds

Accessible letter PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2009/TEGL09-09acc.pdf

CLASSIFICATION
  EMPLOYMENT AND TRAINING ADMINISTRATION            TAA
              ADVISORY SYSTEM                       CORRESPONDENCE SYMBOL
                                                    ONR
         U.S. DEPARTMENT OF LABOR
                                                    DATE
            Washington, D.C. 20210                  October 21, 2009



ADVISORY: TRAINING AND EMPLOYMENT GUIDANCE LETTER NO: 9-09

TO:          STATE WORKFORCE AGENCIES
             STATE WORKFORCE LIAISONS
             STATE TRADE COORDINATORS

FROM:        JANE OATES /s/
             Assistant Secretary

SUBJECT:     Fiscal Year (FY) 2010 State Initial Allocations and the Process for
             Requesting Additional Trade Adjustment Assistance (TAA) Program
             Reserve Funds

1. Purpose. To provide states with the formula methodology used in developing the
Fiscal Year (FY) 2010 initial allocations and to describe the process for requesting
additional TAA program reserve funds for training, job search, and relocation
allowances.

2. References. Training and Employment Guidance Letter (TEGL) No. 4-08, “FY 2009
State Base Allocations and the Process for Requesting Additional TAA Program Reserve
Funds” and Change 1, “FY 2009 State Supplemental Training Fund Distributions
Including Case Management Funds and the Process for Requesting Additional TAA
Program Reserve Funds”; TEGL No. 6-03, “FY 2004 State Planning Estimates and
Process for Requesting Additional TAA Funds for Training and Administration”;
TEGL No. 2-04, “Trade Adjustment Assistance (TAA) Program Reserve Funds”; 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”;
The Trade and Globalization Adjustment Assistance Act of 2009 (TGAAA) (Division B,
Title I, Subtitle I of the “American Recovery and Reinvestment Act of 2009” (Recovery
Act), Public Law (P.L.) No. 111-5 (enacted February 17, 2009); Trade Adjustment
Assistance Reform Act of 2002 (P.L. No. 107-210); the Trade Act of 1974, as amended
(Trade Act) (P.L. No. 93-618, as amended); 20 CFR Part 618 “Trade Adjustment
Assistance; Merit Staffing of State Administration and Allocation of Training Funds to
States; Proposed Rule,” 74 Federal Register 39197 – 39209 (August 5, 2009) (2009
NPRM).




 RESCISSIONS                                        EXPIRATION DATE
 None                                               Continuing

3. Background. On October 1, 2003, TEGL No. 6-03 implemented a new TAA training
funding methodology providing for the distribution by formula of 75 percent of the
funds available each year. The remaining 25 percent were held in reserve for
distribution to states to meet unanticipated needs. Additionally, the formula contained
a “hold harmless” provision which guaranteed each state a base formula allocation of at
least 85 percent of the base allocation that state received in the previous year.

On February 17, 2009, President Obama signed the Recovery Act. The TGAAA, a part
of the Recovery Act, reauthorized and made substantial changes to the TAA program,
requiring modification of the above funding methodology. The TGAAA amended
Section 236(a)(2)(A) of the Trade Act to increase the cap on TAA training funds from
$220 million to $575 million annually in both FY 2009 and FY 2010, and capped the first
quarter of FY 2011 (October 1, 2010 through December 31, 2010) at $143,750,000.

The TGAAA further amended Section 236(a)(2)(B) and (C) of the Trade Act to:
   • Require 35, rather than 25, percent of the training funds to be held in reserve;
   • To provide for a “hold harmless” of 25, rather than 85, percent;
   • To set timelines for the distribution of training funds; and
   • To establish specific formula factors that the Employment and Training
      Administration (ETA) must consider in making those distributions.

These statutory provisions for distributing training funds go into effect October 1, 2009,
for fiscal year 2010. However, section 236(g) of the Trade Act, added by the TGAAA,
does not require regulations implementing these provisions until February 17, 2010. On
August 5, 2009, ETA published in the Federal Register proposed regulations to
implement these new statutory provisions on the allocation of training funds to states.
As this rulemaking proceeds and ETA receives comments and additional data, it may
modify the funding methodology established by this TEGL. This TEGL governs the
initial distribution of the FY 2010 training funds and any subsequent distributions until
final regulations are effective.

Although the Recovery Act reauthorized the TAA program and raised the cap on
training funds, it did not appropriate any funds for the TAA program. Rather, the
Consolidated Omnibus Appropriations Act, 2009, P. L. No. 111-8, appropriated TAA
administrative and program funds to the Federal Unemployment Benefits and
Allowances (FUBA) account. The FY 2010 distributions of funds under the TEGL will
also be FUBA appropriations. Therefore, separate tracking and reporting requirements,
which apply specifically to Recovery Act funds, do not apply to the TAA funds
provided to the states from this, and future, FUBA appropriations. However, as
discussed in TEGL No. 22-08, the TGAAA established new reporting requirements
specific to the TAA program to increase the transparency and accountability of the
program. ETA issued additional guidance on those requirements in TEGL No. 6-09,
“Instructions for implementing the revised 2010 Trade Adjustment Assistance Trade
Activity Participant Report (TAPR).”

4. FY 2010 Fund Allocation Process. As noted above, the TGAAA increased the cap on
TAA training funds from $220 million annually to $575 million for both FY 2009 and FY
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2010. For FY 2010, an amount equal to 65 percent of the annual training funds are
initially distributed to states by formula, and 35 percent will be held in reserve, as
required by the amendments.

   A. TAA Formula Funds: The initial allocation of 65 percent of training funds among
      the states will follow the proposed rule published in the Federal Register on
      August 5, 2009, using the four factors set forth in the new Section 236(a)(2)(C)(ii)
      of the Trade Act:

       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 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 will have.

       Factor 2 will be established using the most recent four quarters 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 will have.

       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 ETA’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 for 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 time period.

       Once each of the four factors have been determined for each state, all four factors
       will be assigned an equal weight, which for FY 2010, will be 25 percent of the
       total for each factor.



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   Section 236(a)(2)(C)(iii) of the Trade Act includes a hold harmless feature, but at
   a much lower level than ETA has been using. In past years, the allocation to each
   state has been at least 85 percent of the amount the state received in its initial
   distribution in the prior fiscal year. The statute now provides that a state’s
   allocation be only at least 25 percent of the amount the state received in its initial
   allocation for the prior fiscal year.

   ETA will determine the national total and each state’s percentage of the national
   total for each factor. Using each state’s percentage of each of these weighted
   factors, ETA will determine the unadjusted percentage that the state will receive
   of the amount available for initial allocations. Allocations under $100,000 will be
   removed, and the statutory 25 percent hold harmless factor will be applied,
   resulting in an adjusted FY 2010 allocation for the remaining states. The
   percentages for all the states will total 100 percent of $373,750,000, which is 65
   percent of the training cap.

   In those instances where the formula approach would give a state less than
   $100,000, that state will not receive any initial allocation, but may, where needed,
   request TAA reserve funds in accordance with the procedures described in
   Section B.

   The initial allocations for each state are attached.

B. TAA Reserve Funds: Reserve funds will be distributed to states on an as-needed
   basis to provide monies to those states that experience large, unexpected layoffs
   or otherwise have training needs that are not met by their initial allocation.
   These funds must be requested using the ETA-9117 (OMB No. 1205-0275).

   In order to be eligible for TAA reserve funds, a state must demonstrate that at
   least 50 percent of its training funds have been expended or that it needs more
   funds to meet unusual or unexpected events. A state requesting reserve funds
   also must provide a documented estimate of expected funding needs through the
   end of the fiscal year. That estimate must be based on an analysis that includes
   at least the following:

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

C. Job Search and Relocation Allowances: States may also request job search and
   relocation allowances for adversely affected workers who have no reasonable
   expectation of obtaining suitable employment within their local commuting
   areas. These funds must also be requested using the ETA-9117 (OMB No. 1205-
   0275) and may be submitted at any time or in combination with a request for
   reserve training funds.

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   D. TAA Program Administration Funds: States will receive an additional 15
      percent of all supplemental allocation and reserve funds for program
      administration, as provided by Section 235A(a)(1) of the Trade Act. Not more
      than two-thirds of these additional funds may be used to cover administrative
      expenses, and not less than one-third of such funds may be used for the purpose
      of providing employment and case management services, as provided by Section
      235A(a)(2) of the Trade Act. The administrative funds will be included each time
      funds are obligated to states by ETA. The program administration allocations for
      each state are also included in the attachment.

   E. Employment and Case Management Services Funds: Each state that receives FY
      2010 TAA funds will receive $350,000 for the purpose of providing employment
      and case management services to TAA participants, as provided by Section
      235A(b)(1) of the Trade Act. A state that does not receive the $350,000 for case
      management services because it received no initial allocation will receive those
      funds, if it subsequently receives a reserve funding allocation.

5. Recapture of TAA Funds. Consistent with the FY 2010 TAA Annual Cooperative
Financial Agreement, ETA may recapture any funds distributed to any state in the same
fiscal year as they were given, if it determines that the state will not expend the funds,
but only after consultation with, and appropriate notification to, state officials.

6. Action Requested. States will make sure that all trade and workforce investment
program staff is informed of and knowledgeable about this funding methodology.

7. Inquiries. States should direct all inquiries to the appropriate ETA regional office.

8. Attachment. State Initial Allocations for FY 2010.




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Attachment 1 (official PDF): https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2009/TEGL09-09a1.pdf

Attachment: State Initial Allocations for FY 2010


                           FY 2010          FY 2010            FY2010 Case     Total FY 2010
                       Training Initial   Administrative       Management       TAA Initial
           State         Allocation        Allotment*            Funds         Allocation**
Alabama                      $6,982,647           $1,047,397        $350,000        $8,380,044
Alaska                         $239,023             $35,853         $350,000          $624,876
Arizona                      $1,846,532            $276,980         $350,000        $2,473,512
Arkansas                    $11,825,695           $1,773,854        $350,000       $13,949,549
California                  $12,853,474           $1,928,021        $350,000       $15,131,495
Colorado                     $2,554,844            $383,227         $350,000        $3,288,070
Connecticut                  $4,336,505            $650,476         $350,000        $5,336,980
Delaware                       $458,936             $68,840         $350,000          $877,777
District of Columbia                 $0                  $0              $0                    $0
Florida                      $1,536,361            $230,454         $350,000        $2,116,815
Georgia                      $9,857,325           $1,478,599        $350,000       $11,685,923
Hawaii                               $0                  $0              $0                    $0
Idaho                        $5,232,339            $784,851         $350,000        $6,367,189
Illinois                    $14,432,032           $2,164,805        $350,000       $16,946,836
Indiana                     $18,839,406           $2,825,911        $350,000       $22,015,317
Iowa                         $3,470,628            $520,594         $350,000        $4,341,223
Kansas                         $851,910            $127,786         $350,000        $1,329,696
Kentucky                     $9,577,695           $1,436,654        $350,000       $11,364,349
Louisiana                    $2,118,976            $317,846         $350,000        $2,786,823
Maine                        $2,610,791            $391,619         $350,000        $3,352,410
Maryland                       $881,786            $132,268         $350,000        $1,364,054
Massachusetts                $9,330,947           $1,399,642        $350,000       $11,080,588
Michigan                    $44,863,288           $6,729,493        $350,000       $51,942,782
Minnesota                    $5,654,466            $848,170         $350,000        $6,852,636
Mississippi                  $3,785,666            $567,850         $350,000        $4,703,516
Missouri                    $12,326,515           $1,848,977        $350,000       $14,525,492
Montana                      $2,260,384            $339,058         $350,000        $2,949,442
Nebraska                       $925,313            $138,797         $350,000        $1,414,110
Nevada                         $205,966             $30,895         $350,000          $586,860
New Hampshire                  $918,927            $137,839         $350,000        $1,406,767
New Jersey                   $4,032,279            $604,842         $350,000        $4,987,121
New Mexico                   $2,376,234            $356,435         $350,000        $3,082,669
New York                     $7,727,854           $1,159,178        $350,000        $9,237,032
North Carolina              $37,411,563           $5,611,734        $350,000       $43,373,297
North Dakota                   $230,704             $34,606         $350,000          $615,310
Ohio                        $16,829,504           $2,524,426        $350,000       $19,703,930
Oklahoma                     $3,261,038            $489,156         $350,000        $4,100,194
Oregon                      $11,050,072           $1,657,511        $350,000       $13,057,583




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Pennsylvania                             $21,502,967                 $3,225,445                 $350,000        $25,078,411
Puerto Rico                                 $151,043                   $22,656                  $350,000           $523,699
Rhode Island                              $2,498,263                  $374,739                  $350,000          $3,223,002
South Carolina                           $12,778,865                 $1,916,830                 $350,000        $15,045,695
South Dakota                                $664,626                   $99,694                  $350,000          $1,114,320
Tennessee                                 $9,306,386                 $1,395,958                 $350,000        $11,052,344
Texas                                    $13,388,959                 $2,008,344                 $350,000        $15,747,302
Utah                                      $2,341,670                  $351,251                  $350,000          $3,042,921
Vermont                                     $350,427                   $52,564                  $350,000           $752,991
Virginia                                  $6,951,856                 $1,042,778                 $350,000          $8,344,634
Washington                                $9,313,577                 $1,397,037                 $350,000        $11,060,614
West Virginia                             $3,634,775                  $545,216                  $350,000          $4,529,992
Wisconsin                                $17,168,963                 $2,575,344                 $350,000        $20,094,307
Wyoming                                             $0                        $0                        $0                  $0
         US Total                   $373,750,000              $56,062,500                $17,150,000         $446,962,500


* Each state's administrative allotment represents 15% of its FY 2010 base allocation.
** Each state's allocation represents the sum of its FY 2010 base allocation and administrative allotment.




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