Fiscal year 2019 Work Opportunity Tax Credit grants

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                 WOTC
               ADVISORY SYSTEM                            CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                        OWI
             Washington, D.C. 20210                       DATE
                                                          February 8, 2019


ADVISORY:       TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 10-18

TO:             STATE WORKFORCE DEVELOPMENT AGENCIES
                STATE WORKFORCE ADMINISTRATORS
                WORK OPPORTUNITY TAX CREDIT COORDINATORS

FROM:           MOLLY E. CONWAY /s/
                Acting Assistant Secretary

SUBJECT:        Work Opportunity Tax Credit Funding Allotments for Fiscal Year 2019

1. Purpose. To convey the Work Opportunity Tax Credit (WOTC) Fiscal Year (FY) 2019
   grant funding allotments and application requirements for the State Workforce Development
   Agencies, also known as State Workforce Agencies (SWA).

2. Action Requested. State Administrators are requested to provide this information to
   appropriate staff. The Employment and Training Administration (ETA) requests SWAs
   submit applications for funding for the FY 2019 state allotments, which totals $18,485,000
   (Attachment I). Grantees must meet the application requirements detailed in Section 4
   within 30 calendar days from the date of issuance of this Training and Employment
   Guidance Letter (TEGL).

3. Summary and Background.

   a. Summary – This TEGL announces the availability of WOTC FY 2019 state allotments to
      conduct WOTC activities and grant award application requirements for grantees to receive
      funding allocations. In addition, it provides general administrative policies and procedural
      guidance set forth by ETA and requirements outlined in the WOTC Statement of Work
      (Attachment II).

   b. Background – On September 28, 2018, the Department of Defense and Labor, Health and
      Human Services, and Education Appropriations Act, 2019 and Continuing Appropriations
      Act, 2019 (Pub. L. 115-245) was signed into law, which provides Department of Labor
      funding appropriations for FY 2019. Section 142(a) of the Protecting Americans from
      Tax Hikes Act of 2015 (PATH Act) amended Section 51(c) of the Internal Revenue Code
      to extend WOTC through December 31, 2019. The U.S. Departments of Labor and
      Treasury jointly administer WOTC. The Department of Treasury, through the Internal
      Revenue Service, administers all tax-related provisions and requirements of the federal tax
      credit. The Department of Labor, through ETA, awards grants to states for administration
      of WOTC.

 RESCISSIONS                                              EXPIRATION DATE
 None                                                     Continuing

4. Funding, Application, Administration, and Reporting Requirements.

   a. Funding. States must enter the allocations provided in Attachment I on their Application
      for Federal Assistance, SF-424 Form, (OMB Control No. 4040-0004) as their request for
      FY 2019 funding.

     After allocating $20,000 to the Virgin Islands, ETA distributes the remaining funds to the
     SWAs by administrative formula with a $66,000 minimum allotment and a 95 percent
     stop-loss/120 percent stop-gain from the previous year allotment share percentage.

         50 percent is based on each state’s relative share of total certifications issued from
          October 1, 2016, through September 30, 2017, for WOTC;
         30 percent is based on each state’s relative share of the Civilian Labor Force averages
          for the 12-month period from July 1, 2017, through June 30, 2018; and
         20 percent is based on each state’s relative share of adult recipients of Temporary
          Assistance for Needy Families averages from October 1, 2016, through September
          30, 2017.

   b. Application Requirements for FY 2019 Funding. ETA requires that grantees submit an
      electronically signed copy of a SF-424 Form through Grants.gov for Funding
      Opportunity Number ETA-WOTC-TEGL-10-18-FY2019 at
      https://www.grants.gov/ within 30 calendar days from the date of this TEGL’s
      issuance. The official, electronically signed SF-424 Form must reflect the state amount
      listed in the FY 2019 State Allotments table, Attachment I, for the requested funding total
      in item #18 and the Catalog of Federal Domestic Assistance Number, 17.271 for item
      #11.

         Each applicant must have a Dun and Bradstreet Data Universal Numbering System
          (DUNS) Number available and must be registered with the System for Award
          Management (SAM) at https://www.sam.gov/SAM/ before submitting an application.
          Note: You must access this link with a supported browser type such as Chrome,
          Firefox, or Safari.
         To submit the required documents, applicants must follow the “Apply for Grants”
          link on Grants.gov and download the links for the grant application package. For this
          grant opportunity, applicants should not follow the “Find Grants” link, as this is not a
          competitive funding opportunity. If applicants encounter a problem with Grants.gov
          and do not find an answer in any of the other resources, call 1-800-518-4726 or 1-
          606-545-5035 (to speak to a Customer Support Representative) or email:
          [email protected].

   c. General Administration. SWAs are responsible for using the FY 2019 funding allotments
      to conduct the following WOTC activities through September 30, 2019: 1) implementing
      the certification process and issuing final determination to employers or their authorized
      representatives; 2) promoting WOTC to employers; 3) reducing and eliminating existing
      backlogs; and 4) reporting performance data on a quarterly basis.

       In addition, SWAs must administer the WOTC in accordance with the policies and
       procedural guidance set forth by ETA and requirements outlined in the WOTC Statement
       of Work, Attachment II.

   d. Reporting Requirements.

          Quarterly Financial Report – SWAs must report expenditures quarterly using ETA
           Form 9130. Financial reports are due no later than 45 days following the end of each
           quarter. Timely submission of these reports is important to ensure proper accounting
           of funds.
          Quarterly Performance Report – SWAs must use the web-based Enterprise
           Business Service System Tax Credit Reporting System to report quarterly activities
           and outcomes using ETA Form 9058. Performance reports are due no later than 45
           days following the end of each quarter. Timely submission of these reports is
           important for administration purposes.

5. Inquiries. Please direct all questions to the appropriate Regional WOTC Coordinator, listed
   on the WOTC website at:
   https://www.doleta.gov/business/incentives/opptax/contact/regional-offices.cfm.

6. References.
    Department of Defense and Labor, Health and Human Services, and Education
      Appropriations Act, 2019 and Continuing Appropriations Act, 2019 (Pub. L. 115-245);
    Consolidated Appropriations Act, 2018 (Pub. L. 115-141);
    The PATH Act (Pub. L. 114-113);
    Section 51 of the Internal Revenue Code of 1986, as amended; and
    Guidance on the Handling and Protection of Personally Identifiable Information (PII),
      Training and Employment Guidance Letter 39-11.

7. Attachments.
   Attachment I: FY 2019 State Allotments
   Attachment II: WOTC Statement of Work

Attachment (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2019/TEGL_10-18_Attachment1_Acc.pdf)

U. S. Department of Labor                       Attachment I
             Employment and Training Administration
             Work Opportunity Tax Credits
              FY 2019 State Allotments


             State                           Amount

Total                                            $18,485,000

Alabama                                                 312,980
Alaska                                                   66,000
Arizona                                                  334,697
Arkansas                                                 148,716
California                                             2,512,045
Colorado                                                290,650
Connecticut                                             124,298
Delaware                                                 71,932
District of Columbia                                     66,000
Florida                                                 968,208
Georgia                                                 502,864
Hawaii                                                    66,000
Idaho                                                     66,000
Illinois                                                 731,207
Indiana                                                  335,479
Iowa                                                     268,598
Kansas                                                   142,784
Kentucky                                                 434,440
Louisiana                                                321,537
Maine                                                     80,031
Maryland                                                 315,535
Massachusetts                                            347,741
Michigan                                                 645,927
Minnesota                                                253,467
Mississippi                                              181,837
Missouri                                                 436,944
Montana                                                   66,000
Nebraska                                                 163,748
Nevada                                                    95,462
New Hampshire                                             66,000
New Jersey                                               374,419
New Mexico                                               140,285
New York                                               1,017,666
North Carolina                                           556,350
North Dakota                                             66,000
Ohio                                                    756,211
Oklahoma                                                237,136
Oregon                                                  252,527
Pennsylvania                                            731,491
Puerto Rico                                              87,714
Rhode Island                                             66,000
South Carolina                                          275,429
South Dakota                                             66,000
Tennessee                                               802,646
Texas                                                  1,110,332
Utah                                                     117,790
Vermont                                                   66,000
Virginia                                                367,710
Washington                                              440,294
West Virginia                                           127,853
Wisconsin                                               322,020
Wyoming                                                   66,000
  State Total                                         18,465,000
Virgin Islands                                            20,000
                                      I-1

Attachment (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2019/TEGL_10-18_Attachment2_Acc.pdf)

Attachment II


                           Work Opportunity Tax Credit (WOTC)
                                   Statement of Work
State Workforce Development Agencies, also known as State Workforce Agencies (SWA), are
to use Fiscal Year 2019 funds to realize the following responsibilities:

    1. Designate a state coordinator, who oversees the administration of WOTC, for each state
     grant.

    2. Determine eligibility of individuals as members of targeted groups, on a timely basis, and
     performing a “quality review” by a second staff person for each determination within 48
     hours of receipt.

    3. Issue employer certifications, denials, or notices of invalidation for tax credits on a timely
     basis and in accordance with the policies and procedures set forth by the Employment and
     Training Administration (ETA).

    4. Develop a backlog reduction plan which includes an estimated timeline to reduce and
     eliminate existing backlogs based on current policies and procedures, and notify your
     regional coordinator prior to implementation.

    5. Develop working agreements with partner agencies in the American Job Center network
     (also known as the One-Stop Career Center system) and coordinating efforts to promote
     WOTC to employers and job seekers and other Workforce Innovation and Opportunity
     Act (WIOA) partners.

    6. Develop working agreements with other SWAs for the timely and orderly processing of
     “out of state” Certification Requests (i.e., applications) requiring SWAs to provide
     available documentation and records for WOTC potentially eligible applicants/new hires
     relocating and working in another state.

    7. Establish and implement an appeals resolution process in accordance with the guidelines
     provided by ETA.

    8. Establish and maintain appropriate forms’ review, record keeping, and reporting
     capability related to the orderly management of WOTC certification requests.

    9. Establish and maintain an orderly system for regularly verifying the eligibility of a
     random sample of individuals certified under WOTC and initiating effective corrective
     action when appropriate as indicated by results of such activities.

    10. Negotiate formal cooperative agreements with local workforce areas, State Vocational
      Rehabilitation Agencies, Veterans Administration and related groups, Employment
      Networks and other state and local agencies, and organizations for the purposes of issuing
      Conditional Certifications where appropriate.


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                                                                                     Attachment II

    11. Negotiate formal cooperative agreements with appropriate state agencies to expedite
      verification of information provided to the SWA by participating target group members.
    12. Train state and participating agency staff and provide monitoring and technical assistance to
      these agencies, as appropriate, for conducting target group preliminary eligibility
      determinations and issuing Conditional Certifications.

    13. Cooperate with employment and training organizations already working with the private
      sector such as: veteran organizations, employer committees, and workforce development
      boards to inform employers about the tax benefits to be derived from participation and the
      eligibility requirements under WOTC.

    14. Assure that all data exchanges conducted through or during the course of performance of this
      grant will be conducted in a manner consistent with applicable Federal law and TEGL NO.
      39-11 (issued June 28, 2012). All such activity conducted by ETA and/or recipient/s will be
      performed in a manner consistent with applicable state and Federal laws.

Other Grant Agreement Conditions
By entering into this agreement, the SWA agrees to the following conditions:
    The SWA must adhere to provisions of the Internal Revenue Code of 1986, Section 51, as
     amended, in administering WOTC. Law designates the SWAs as the only agencies that
     can issue a Certification. The SWAs can enter into cooperative agreements with certain
     participating agencies and together provide other WOTC related services (e.g., outreach
     activities).
    ETA will review funding use against the quarterly spending plan. When expenditures are
     substantially below plan, ETA may de-obligate funds for redistribution.


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