Operating instructions for 2002 temporary extended unemployment benefits

U.S. Department of Labor
Employment and Training Administration Washington, D.C. 20210 Classification: UI Correspondence symbol: TEUPDI Date: March 19, 2002

DIRECTIVE: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 17-02

TO: ALL STATE EMPLOYMENT SECURITY AGENCIES

FROM: GRACE A. KILBANE
Administrator
Office of Workforce Security

SUBJECT: Temporary Extended Unemployment Compensation Act of 2002

RESCISSIONS: None
EXPIRATION DATE: March 31, 2003

1. Purpose. To advise State Workforce Agencies (SWAs) of the Provisions of Title II of the Job Creation and Worker Assistance Act of 2002 (the Temporary Extended Unemployment Compensation Act of 2002), to provide instructions for implementing the legislation, and to provide fiscal and reporting instructions.

2. References. The Temporary Extended Unemployment Compensation Act of 2002, Public Law 107-147, signed by the President on March 9, 2002; Section 205 of the Federal-State Extended Unemployment Compensation Act of 1970, as amended; Section 233 of the Trade Act of 1974; 20 CFR Part 615.

3. Summary. The Temporary Extended Unemployment Compensation (TEUC) program provides up to 13 weeks of 100 percent federally financed benefits in all states and up to an additional 13 weeks in states that are in an Extended Benefit (EB) period or would be in an EB period using a 4% insured unemployment rate trigger.

TEUC is payable to individuals who (1) filed an initial (new or additional) claim that was effective during or after the week of March 15, 2001; and (2) have exhausted regular benefits or have no benefit rights due to expiration of a benefit year ending during or after the week of March 15, 2001; and (3) have no rights to regular or extended benefits under any state or federal law; and (4) is not receiving benefits under the Canadian law. However, the Governor of a state may elect to pay TEUC in lieu of Extended Benefits.

In order to qualify for TEUC, individuals must have had 20 weeks of work, or the equivalent in wages, in their base periods. Continuing eligibility is determined under the requirements of the state law.

TEUC is administered through voluntary agreements between states and the Department of Labor. TEUC is payable in a state the week following the week in which an agreement is signed. The first week for which benefits may be paid is the week beginning March 10, 2002. The last week for which benefits are payable is the week ending December 28, 2002.

4. Policy. This document furnishes information about the TEUC program and provides the Department's interpretation of the TEUC Act. It also sets forth operating instructions of the Department of Labor to guide states in implementing the TEUC program.

The instructions in the document are issued to the states and cooperating state agencies as guidance provided by the Department of Labor in its role as the principal in the TEUC program. As agents of the United States, the states and cooperating state agencies may not vary from the operating instructions in the document without the prior approval of the Department.

5. Action Required. Administrators are requested to provide this information and instructions to the appropriate staff.

6. Inquiries. Inquiries should be directed to your Regional Office.

7. Attachment. Implementing and Operating Instructions for the TEUC Program

Attachment: Implementing and Operating Instructions for the TEUC Program

Official attachment: https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2002/UIPL17-02_Attach.pdf

                                Attachment to UIPL NO. 17-02

TEMPORARY EXTENDED UNEMPLOYMENT
    COMPENSATION ACT OF 2002

IMPLEMENTATION AND OPERATING INSTRUCTIONS
                FOR THE
             TEUC PROGRAM

              U.S. Department of Labor
        Employment and Training Administration
             Office of Workforce Security

                       Unemployment Insurance Operations
Introduction ............................................. i

Section I - Title II of Public Law
    Section 201--Short Title ............................. I-1
    Section 202--Federal-State Agreements................. I-1
    Section 203--Temporary Extended Unemployment
                 Compensation Account..................... I-2
    Section 204--Payments to States Having
                 Agreements for the Payment of Temporary
                 Extended Unemployment Compensation....... I-3
    Section 205--Financing Provisions..................... I-4
    Section 206--Fraud and Overpayments................... I-5
    Section 207--Definitions.............................. I-6
    Section 208--Applicability............................ I-6
    Section 209--(Not covered in this issuance)

Section II - Definitions of Terms Used in this Document

1. Act................................................... II-1
2. Additional Compensation............................... II-1
3. Agreement............................................. II-1
4. Applicable Benefit Year............................... II-1
5. Applicable State ..................................... II-1
6. Applicable State Law.................................. II-1
7. Base Period........................................... II-1
8. Benefit Year.......................................... II-1
9. Compensation.......................................... II-2
10 Extended Compensation................................. II-2
11. Regular Compensation.................................. II-2
12. Secretary............................................. II-2
13. State................................................. II-2
14. State Agency.......................................... II-2
15. State Law............................................. II-2
16. Temporary Extended Unemployment Compensation.......... II-2
17. TEUC First Tier....................................... II-2
18. TEUC Second Tier...................................... II-2
19. Week.................................................. II-3
20. Week of Unemployment.................................. II-3

Section III - Procedures for Implementing TEUC

1. Beginning and Ending of the TEUC Program in a State... III-1
2. Notifications
    a. Identification and Notification of Potential TEUC
        Claimants......................................... III-1
    b. Notification of the Media......................... III-1
3. Relationship of EB to TEUC............................ III-1
4. Effect of Additional Benefit Eligibility in the State..III-2

                     Table of Contents
                                                                  Page
5.  Eligibility for Temporary Extented Unemployment
    Compensation
    a. Basic Eligibility Requirements.................... III-2
    b. Determining Exhaustees............................ III-3
    c. Applicability of State Law Provisions............. III-4
    d. Applicability of EB Provisions.................... III-4
    e. Effect of Other UI-Related Programs on
        Eligibility for TEUC.............................. III-4
        (1) Trade Readjustment Allowances (TRA).......... III-5
        (2) Disaster Unemployment Assistance (DUA)....... III-5
6. Establishment of TEUC Account......................... III-5
    a. TEUC Maximum Benefit Amount....................... III-5
    b. TEUC Second Tier (TEUC-X)......................... III-6
        (2) Changes in an Individual’s TEUC Account...... III-6
7. TEUC Weekly Benefit Amount............................ III-6
    a. Total Unemployment................................ III-6
    b. Partial and Part-Total Unemployment............... III-6
8. Record Maintenance and Disposal of Records............ III-6
    a. Record Maintenance................................ III-6
    b. Disposal of Records............................... III-7
9. Disclosure of Information........................ .... III-7
10. Inviolate Rights to TEUC.......................... ... III-7

Section IV - Processing Claims for TEUC

1. Applicability of State Law Provisions................. IV-1
2. Claims for TEUC
    a. Intrastate Initial Claims......................... IV-1
    b. Interstate Initial Claims......................... IV-1
    c. Intrastate and Interstate Weeks Claimed........... IV-2
    d. Combined Wage Claims.............................. IV-2
        (1) Report of Determination of Combined-Wage
             Claim, TC-IB5................................ IV-2
        (2) Charging of TEUC to Transferring
             State........................................ IV-2
3. Secretary's Standard.................................. IV-2
4. Determination of Entitlement: Notices to Individual... IV-2
    a. Determination of Initial Claim.................... IV-2
    b. Determination of Weekly Claims.................... IV-3
    c. Redeterminations.................................. IV-3
    d. Notices to Individual............................. IV-3
    e. Promptness........................................ IV-3
    f. Secretary’s Determination Standard................ IV-3
5. Appeal and Hearing.................................... IV-3
    a. Applicable State Law.............................. IV-3

                                                                   Page
     b. Rights of Appeal and Fair Hearing................. IV-4
     c. Promptness of Appeals Decisions................... IV-4
6.   Fraud and Overpayment................................. IV-4
     a. Fraudulent Claiming of TEUC....................... IV-4
     b. Recovery of Overpayments.......................... IV-5

Section V - Fiscal Instructions

1. Payments to States................................... V-1
    a. Requesting TEUC Benefit Funds.................... V-1
    b. TEUC Administrative Funds........................ V-1
2. TEUC Fiscal Reporting Instructions
    a. Time Distribution................................ V-1
    b. Administrative Fund Accounting................... V-1
    c. Accounting for TEUC Payments...................... V-2
3. Drawdown Instructions for TEUC........................ V-2
    a. Requesting Refunds................................ V-3

Section VI - Reporting Instructions

1. General............................................... VI-1
2. Data Items to be Reported............................. VI-1
    a. ETA 207........................................... VI-1
    b. ETA 218........................................... VI-1
    c. ETA 227........................................... VI-1
    d. ETA 5130.......................................... VI-1
    e. ETA 5159.......................................... VI-1
    f. ETA 2112.......................................... VI-2
    g. ETA 539........................................... VI-2
    h. UI-3 Worksheet.................................... VI-2
3. Notification of a Regular EB Trigger Under EUCA....... VI-3
4. OMB Approval.......................................... VI-3

                                                             Page

Title II of Public Law 107-147 is short-titled the
ATemporary Extended Unemployment Compensation Act of 2002"
and is referenced throughout this publication as the “Act”

The Act creates a federally funded benefit extension, called
Temporary Extended Unemployment Compensation (TEUC), which
provides up to 26 weeks of benefits to exhaustees, as
defined, who otherwise meet the requirements of the Act.

Throughout these instructions various references are made to
state laws pertaining to the payment of regular benefits by
using such phrases as "in accordance with" or "as required
by" or similar phrasing. In all cases such phrasing means
law provisions as they apply to the determination and
payment of regular benefits.

These instructions reference sections of the Federal-State
Extended Unemployment Compensation Act of 1970 by using such
phrases as "in accordance with" or "as required by" or
similar phrasing. In all cases such phrasing mean state law
provisions that are "in accordance with" or "as required by"
the specific provisions of the Federal-State Extended
Unemployment Compensation Act of 1970, as implemented by 20
CFR Part 615.

                                                     Page

                  Section I - Title II of Public Law

Section 201.   SHORT TITLE.

This title may be cited as the ATemporary Extended
Unemployment Compensation Act of 2002".

Section 202.   FEDERAL-STATE AGREEMENTS.

    (a) IN GENERAL.- Any State which desires to do so may
enter into and participate in an agreement under this Act
with the Secretary of Labor (in this title referred to as
the “Secretary”). Any State which is a party to an agreement
under this title may, upon providing 30 days’ written notice
to the Secretary, terminate such agreement.

    (b) PROVISIONS OF AGREEMENT.- Any agreement under
subsection (a) shall provide that the State agency of the
State will make payments of temporary extended unemployment
compensation to individuals who-

             (1) have exhausted all rights to regular
compensation under the State law or under Federal law with
respect to a benefit year (excluding any benefit year that
ended before March 15, 2001);

             (2) have no rights to regular compensation or
extended compensation with respect to a week under such law
or any other State unemployment compensation law or to
compensation under any other Federal law;

             (3) are not receiving compensation with respect
to such week under the unemployment compensation law of
Canada, and

             (4) filed an initial claim for regular
compensation on or after March 15, 2001.

    (c) EXHAUSTION OF BENEFITS.- For purposes of subsection
(b)(1), an individual shall be deemed to have exhausted such
individual’s rights to regular compensation under a State law
when -

        (1) no payment of regular compensation can be made
under such law because such individual has received all

                 Section I - Title II of Public Law

regular compensation available to such individual based on
employment or wages during such individual’s base period, or

        (2) such individual’s rights to such compensation
have been terminated by reason of the expiration of the
benefit year with respect to such rights existed.

    (d) WEEKLY BENEFIT AMOUNT, ETC.- For purposes of any
agreement under this title-

        (1) the amount of temporary extended unemployment
compensation which shall be payable to any individual for
any week of total unemployment shall be equal to the amount
of the regular compensation (including dependents’ allowances) payable to such individual during such
individual’s benefit year under the State law for a week of
total unemployment;

        (2) the terms and conditions of the State law which
apply to claims for regular compensation and to the payment
thereof shall apply to claims for temporary extended
unemployment compensation and the payment thereof, except-

            (A) that an individual shall not be eligible for
temporary extended unemployment compensation under this
title unless, in the base period with respect to which the
individual exhausted all rights to regular compensation
under the State law, the individual had 20 weeks of full-
time insured employment or the equivalent in insured wages,
as determined under the provisions of the State law
implementing section 202(a)(5) of the Federal-State Extended
Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note);
and

            (B) where otherwise inconsistent with the
provisions of this title or with the regulations or
operating instructions of the Secretary promulgated to carry
out this title; and

        (3) the maximum amount of temporary emergency
unemployment compensation payable to any individual for whom
a temporary emergency unemployment compensation account is
established under section 203 shall not exceed the amount
established in such account for such individual.

                  Section I - Title II of Public Law

    (e) ELECTION BY STATES. - Notwithstanding any other
provision of Federal law (and if State law permits), the
Governor of a State that is in an extended benefit period
may provide for the payment of temporary extended
unemployment compensation in lieu of extended compensation
to individuals who otherwise meet the requirements of this
section. Such an election shall not require a State to
trigger off an extended benefit period.

Section 203.   TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION
ACCOUNT.

    (a) IN GENERAL.- Any agreement under this title shall
provide that a State will establish, for each eligible
individual who files an application for temporary extended
unemployment compensation, a temporary extended unemployment
compensation account with respect to such individual’s
benefit year.

   (b)   AMOUNT IN ACCOUNT.-

         (1) IN GENERAL.- The amount established in an
account under subsection (a) shall be equal to the lesser
of-

            (A) 50 percent of the total amount of regular
compensation (including dependents’ allowances) payable to
the individual during the individual’s benefit year under
such law; or
            (B) 13 times the individual’s average weekly
benefit amount for the benefit year.

        (2) WEEKLY BENEFIT AMOUNT.- For purposes of this
subsection, an individual’s weekly benefit amount for any
week is the amount of regular compensation (including
dependents’ allowances) under the State law payable to such
individual for such week for total unemployment.

   (c) SPECIAL RULE.-

        (1) IN GENERAL.- Notwithstanding any other provision
of this section, if, at the time that the individual’s
account is exhausted, such individual’s State is in an

                 Section I - Title II of Public Law

extended benefit period (as determined under paragraph (2)),
then, such account shall be augmented by an amount equal to
the amount originally established in such account (as
determined under subsection (b)(1)).

        (2) EXTENDED BENEFIT PERIOD.- For purposes of
paragraph (1), a State shall be considered to be in an
extended benefit period if, at the time of exhaustion (as
described in paragraph (1))-

            (A) such a period is then in effect for such
State under the Federal-State Extended Unemployment
Compensation Act of 1970; or

            (B) such a period would then be in effect for
such State under such Act if section 203(d) of such Act were
applied as if it had been amended by striking A5" each place
it appears and inserting A4".

Section 204. PAYMENTS TO STATES HAVING AGREEMENTS FOR THE
PAYMENT OF TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION.

    (a) GENERAL RULE.- There shall be paid to each State
which has entered into an agreement under this title an
amount equal to 100 percent of the temporary extended
unemployment compensation paid to individuals by the State
pursuant to such agreement.

    (b) TREATMENT OF REIMBURSABLE COMPENSATION.- No payment
shall be made to any State under this section in respect of
any compensation to the extent the State is entitled to
reimbursement in respect of such compensation under the
provisions of any Federal law other than this title or
chapter 85 of title 5, United State Code. A State shall not
be entitled to any reimbursement under such chapter 85 in
respect of any compensation to the extent the State is
entitled to reimbursement under this title in respect of
such compensation.

    (c) DETERMINATION OF AMOUNT.- Sums payable to any State
by reason of such State having an agreement under this title
shall be payable, either in advance or by way of
reimbursement (as may be determined by the Secretary), in
such amounts as the Secretary estimates the State will be

                  Section I - Title II of Public Law

entitled to receive under this title for each calendar
month, reduced or increased, as the case may be, by any
amount by which the Secretary finds that the Secretary's
estimates for any prior calendar month were greater or less
than the amounts which should have been paid to the State.
Such estimates may be made on the basis of such statistical,
sampling, or other method as may be agreed upon by the
Secretary and the State agency of the State involved.

Section 205.   FINANCING PROVISIONS.

    (a) IN GENERAL.- Funds in the extended unemployment
compensation account (as established by section 905(a) of
the Social Security Act (42 U.S.C. 1105(a)) of the
Unemployment Trust Fund (as established by section 904(a) of
such Act(42 U.S.C. 1104(a)) shall be used for the making of
payments to States having agreements entered into under this
title.

    (b) CERTIFICATION.- The Secretary shall from time to
time certify to the Secretary of the Treasury for payment to
each State the sums payable to such State under this title.
 The Secretary of the Treasury prior to audit or settlement
by the General Accounting Office, shall make payments to the
State in accordance with such certification, by transfers
from the extended unemployment compensation account (as so
established) to the account of such State in the
Unemployment Trust Fund (as so established).

    (c) ASSISTANCE TO STATES.- There are appropriated out of
the employment security administration account (as established
by section 901(a) of the Social Security Act (42 U.S.C.
1101(a)) of the Unemployment Trust Fund, without fiscal year
limitation, such funds as may be necessary for purposes of
assisting States (as provided in title III of the Social
Security Act (42 U.S.C. 501 et seq.)) in meeting the costs of
administration of agreements under this title.

    (d) APPROPRIATIONS FOR CERTAIN PAYMENTS.- There are
appropriated from the general fund of the Treasury, without
fiscal year limitation, to the extended unemployment
compensation account (as so established) of the Unemployment
Trust Fund (as so established) such sums as may be necessary
for to make payments under this section in respect of-

                   Section I - Title II of Public Law

        (1) compensation payable under chapter 85 of title 5,
United States Code, and

        (2) compensation payable on the basis of services to
which section 3309(a)(1) of the Internal Revenue Code of 1986
applies.

Amounts appropriated pursuant to the preceding sentence shall
not be required to be repaid.

SECTION 206.   FRAUD AND OVERPAYMENTS.

    (a) IN GENERAL.- If an individual knowingly has made, or
caused to be made by another, a false statement or
representation of a material fact, or knowingly has failed, or
caused another to fail, to disclose a material fact, and as a
result of such false statement or representation or of such
nondisclosure such individual has received an amount of
temporary extended unemployment compensation under this title
to which he was not entitled, such individual-

        (1) shall be ineligible for further temporary
extended unemployment compensation under this title in
accordance with the provisions of the applicable State
unemployment compensation law relating to fraud in connection
with a claim for unemployment compensation; and

        (2) shall be subject to prosecution under section
1001 of title 18, United States Code.

    (b) REPAYMENT.- In the case of individuals who have
received amounts of temporary extended unemployment
compensation under this title to which they were not entitled,
the State shall require such individuals to repay the amounts
of such temporary extended unemployment compensation to the
State agency, except that the State agency may waive such
repayment if it determines that-

        (1) the payment of such temporary extended
unemployment benefits was without fault on the part of any
such individual; and
        (2) such repayment would be contrary to equity and
good conscience.

   (c)   RECOVERY BY STATE AGENCY.-

                   Section I - Title II of Public Law

        (1) IN GENERAL.- The State agency may recover the
amount to be repaid, or any part thereof, by deductions from
any temporary extended unemployment compensation payable to
such individual under this title or from any unemployment
compensation payable to such individual under any Federal
unemployment compensation law administered by the State agency
or under any other Federal law administered by the State
agency which provides for the payment of any assistance or
allowance with respect to any week of unemployment during the
3-year period after the date such individuals received the
payment of temporary extended unemployment benefits to which
they were not entitled.

        (2) OPPORTUNITY FOR HEARING.- No repayment shall be
required, and no deduction shall be made, until a
determination has been made, notice thereof and an opportunity
for a fair hearing has been given to the individual, and the
determination has become final.

    (d) REVIEW.- Any determination by a State agency under
this section shall be subject to review in the same manner and
to the same extent as determinations under the State
unemployment compensation law, and only in that manner and to
that extent.

SECTION 207. DEFINITIONS.

    In this title, the terms “compensation”, “regular compensation”, “extended compensation”, “additional compensation”, “benefit year”, “base period”, “State”, “State agency”, “State law”, and “week” have the respective meanings
given such terms under section 205 of the Federal-State
Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304
note).

SECTION 208.   APPLICABILITY.

    An agreement entered into under this title shall apply to
weeks of unemployment-

         (1) beginning after the date on which such agreement
is entered into; and

        (2)    ending before January 1, 2003.

               Section I - Title II of Public Law

     Section II - Definition of Terms Used Throughout this Document

This section contains the definitions of terms used
throughout this document. To the extent possible, these
definitions follow the EB regulations found at 20 C.F.R.
615.2 as required by Section 207 of the Act regarding these
terms listed there. References to 5 U.S.C. Chapter 85 are
to the UCFE/UCX law.

        1. "Act" means the Temporary Unemployment Compensation
Act of 2001, Title VII, Public Law    .

        2. "Additional Compensation" means compensation totally
financed by a state under its law by reason of conditions of
high unemployment or by reason of other special factors, and
when so payable includes compensation payable pursuant to 5
U.S.C. Chapter 85.

        3. "Agreement" means the agreement entered into pursuant
to the Act between a state and the Department of Labor,
under which the state agency makes payments of TEUC in
accordance with the Act as interpreted by the Secretary or
the Department of Labor as set forth in these instructions
or other instructions issued by the Department.

        4. "Applicable Benefit Year" means, with respect to an
individual, the current benefit year if, at the time an
initial claim for TEUC is filed, the individual has an
unexpired benefit year only in the state in which such
claim is filed, or, in any other case, the individual's
most recent benefit year ending during or after the week of
March 15, 2001. For this purpose, the most recent benefit
year, for an individual who has unexpired benefit years in
more than one state when an initial claim for TEUC is
filed, is the benefit year with the
latest ending date or, if such benefit years have the same
ending date, the benefit year in which the latest continued
claim for regular compensation was filed.

        5. "Applicable State" means, with respect to an
individual, the state with respect to which the individual
is an exhaustee for TEUC purposes, and, in the case of a
combined wage claim for regular compensation, the term
means the "paying State" for such claim as defined in 20
C.F.R. 616.6(e).

        6. "Applicable State Law" means the state law of the
 state which is the applicable state for an individual.

        7. "Base Period" means, with respect to an individual,
 the base period as determined under the applicable state
 law for the individual's applicable benefit year.

        8. "Benefit Year" means, with respect to an individual,
 the benefit year as defined in the applicable state law.
        9. "Compensation" means cash benefits (including
dependents' allowances) payable to individuals with respect
to their unemployment, and includes regular compensation,
additional compensation, extended compensation and TEUC as
defined in this section.

        10. "Extended Compensation" means the extended
unemployment compensation payable to an individual for weeks
of unemployment which begin in an extended benefit period,
under those provisions of a state law which satisfy the
requirements of the Federal-State Extended Unemployment
Compensation Act of 1970, and, when so payable, includes
compensation payable pursuant to 5 U.S.C. Chapter 85, but
does not include regular compensation or additional
compensation. Extended compensation is referred to as
Extended Benefits or EB.

        11. "Regular Compensation" means compensation payable to
an individual under any state law, and, when so payable,
includes compensation payable pursuant to 5 U.S.C. Chapter
85, but does not include extended compensation or additional
compensation.

        12. "Secretary" means the Secretary of Labor of the
United States.

        13. "State" means the States of the United States, the
District of Columbia, the Commonwealth of Puerto Rico, and
the Virgin Islands.

        14. “State Agency” means the Employment Security Agency
(currently referred to as the State Workforce Agency) of a
state which administers the state law.

        15. "State Law" means the unemployment compensation law
of a state approved by the Secretary under Section 3304(a) of
the Internal Revenue Code of 1954 (26 U.S.C. 3304(a)).

        16. "Temporary Extended Unemployment Compensation" means
the extended compensation payable under the Act, and which is
referred to as TEUC, TEUC first tier, TEUC second tier (TEUC-
X).

        17. “TEUC First Tier” means the amount of TEUC benefit
payable to an individual based on a determination of
entitlement under the requirements of Section 203(b)(1) of
the Act.

        18. “TEUC Second Tier” means the amount of TEUC benefit
payable to an individual based on a determination of
entitlement under the requirements of Section 203(c) of the
Act and is synonymous with TEUC-X.

        19. "Week" means, for purposes of eligibility for and
benefit payments under this Act, a week as defined in the
applicable state law.

        20. "Week of Unemployment" means a week of total,
part-total, or partial unemployment as defined in the
applicable state law, which shall be applied in the same
manner to the same extent to claims filed under the
requirements of this Act.

            Section III - Implementing the Requirements of the Act

1. Beginning and Ending of the TEUC Program in a State.
TEUC is payable in a state beginning with the first week
which begins after the date an Agreement is signed between
the state and the Department of Labor. The last week of
TEUC payable is the last week ending prior to January 1,
2003.

States may terminate the TEUC agreement upon 30 days written
notice. The TEUC period will end in a state 30 days from
the date the state notifies the Secretary of its election to
terminate the TEUC program. No TEUC will be payable for
weeks which begin after the date the termination of the
agreement is effective. However, TEUC is payable for weeks
of unemployment up to such termination date. The agreement
may also be terminated by the Secretary, as provided in the
agreement.

2.   Notifications.

    a. Identification and Notification of Potentially
Eligible Claimants. The state will identify individuals who
are potentially eligible for TEUC, and provide each such
individual with appropriate written notification of his/her
potential entitlement to TEUC.

A potentially eligible claimant is any claimant who has a
benefit year that ends during or after the week of March 15,
2001, and has received all regular compensation payable
based on employment and/or wages during the applicable base
period, or whose rights to regular compensation have been
terminated by reason of the expiration of the benefit year
with respect to which such rights existed.

            (1) Interstate Claims. TEUC is payable to
individuals filing under the Interstate Benefit Payment Plan
(IBPP) in the same manner and to the same extent that
benefits are payable to intrastate claimants without regard
to whether or not the claim is filed through an agent state
or directly with the liable state.

The liable state is responsible for identifying and
notifying all potentially eligible interstate claimants of

            Section III - Implementing the Requirements of the Act

 their potential eligibility, including filing instructions.

         b. Notification of Media. To assure public
 knowledge of the status of the TEUC program, the state shall
 notify all appropriate news media having coverage throughout
 the state of the beginning of the TEUC program.

3. Relation of EB to TEUC. Section 202(e) of the Act allows,
if state law permits, the payment of TEUC “in lieu of” EB to a
TEUC-eligible individual. If a state elects to pay TEUC in
lieu of EB, the amount of individual’s EB entitlement is not
otherwise affected: EB is deferred, not reduced. As a
result, if the state is in an EB period when the individual
exhausts all TEUC first and second-tier eligibility (see
section 6.b of this section of the operating instructions),
any individual meeting the EB eligibility requirements may
receive any remaining EB entitlement.

Under the Act, the receipt of EB does not reduce the amount
of TEUC payable. A state is not required to trigger “off” EB
if it elects to pay TEUC in lieu of EB.

4. Effect of Additional Benefit (AB) Eligibility in a State.
 Although Section 202(b) of the Act requires that an
individual have no rights to regular compensation or EB in
order to meet the eligibility requirements for TEUC, it
requires the payment of TEUC regardless of AB eligibility. A
state with an AB program in effect may pay AB following the
payment of TEUC. AB does not affect the TEUC maximum benefit
amount (MBA). Please note that Section 209(b) of the Act
amends Section 903 of the Social Security Act by adding
subsection (d)(3)(B)(i)(II) to allow the special $8 billion
Reed Act distribution to be used for the payment of AB to
exhaustees of TEUC.

5. Eligibility for Temporary Extended Unemployment
Compensation.

    a. Basic Eligibility Requirements. To be eligible for a
week of TEUC an individual, in addition to meeting other
applicable State law provisions, must:

               Section III - Implementing the Requirements of the Act

        (1) have exhausted all rights to regular compensation
under the applicable state law with respect to the applicable
benefit year.

        (2) have no rights to regular or extended
compensation with respect to the week under such law or any
other state or Federal unemployment compensation law.

        (3) not be receiving compensation with respect to
such week under the unemployment compensation law of Canada,

        (4) have filed an initial claim, new or additional,
effective during or after the week of March 15, 2001.
Although the Act says “on or after” March 15, UI eligibility is
determined on a weekly basis; therefore the Act is read to
apply to the entire week. Please note that the period of time
during which the filing of an initial claim that satisfies
this requirement extends through the life of the TEUC program
if the claimant had a benefit year on file as of the week of
March 15, 2001.

      b.   Determining Exhaustees.

        (1) In General. For an individual to be deemed to
have exhausted benefit rights to regular compensation with
respect to an applicable benefit year for purposes of meeting
the first TEUC eligibility criterion, the individual must have
either:

S     the individual must have received all regular compensation
      payable based on employment and/or wages during the
      applicable base period; or

S     the individual's rights to regular compensation have been
      terminated by reason of the expiration of the benefit year
      with respect to which such rights existed;

        (2) Special Rules for Determining an Exhaustee for
TEUC Purposes. An individual shall be deemed to have received
all regular benefits available during the applicable benefit
year or payable according to the monetary determination, even
though:

            Section III - Implementing the Requirements of the Act

            (A) as a result of an appeal concerning wages or
employment or both which were not included in the original
monetary determination, the individual may subsequently be
determined to have entitlement to more or less compensation;

            (B) the individual may be denied benefits under a
state law seasonality provision, but who has entitlement to
future weeks in the off season;

            (C) after having established a benefit year during
such year his/her wage credits were canceled or the right to
regular or extended compensation was totally reduced as the
result of a disqualification;

           (D)   the individual has not exhausted AB;

            (E) the individual is precluded from establishing
a subsequent benefit year or qualifying for benefits in a
subsequent benefit year by reason of state law requalifying
provisions that require earnings after the beginning of the
first benefit year;

Note that an individual who has no rights to benefits in cases
involving the failure to meet requalifying requirements ceases
to be an exhaustee when the requalifying earnings requirement
is met and regular compensation is payable in a new benefit
year. When regular compensation becomes payable, the
individual is no longer entitled to TEUC.

            Section III - Implementing the Requirements of the Act

    c. Applicability of State Law Provisions. Under Section
202(d)(2) of the Act, state law provisions of the applicable
state that apply to the payment and continuing eligibility for
regular compensation apply to the payment of TEUC except for
the EB “20 weeks of work” requirement discussed in paragraph d.
below.

An individual is not entitled to receive TEUC for a week to
which a disqualification would apply but for the fact that the
individual has exhausted all rights to regular compensation.

For example, an individual is disqualified for voluntary
leaving until the individual earns six times the WBA. The
individual’s benefit year has ended and the individual has
insufficient earnings to establish a new benefit year and,
therefore, files a TEUC claim. Until this individual
satisfies the requalification requirement imposed during the
benefit year of the regular claim, the individual is not
eligible to receive TEUC.

    d. Applicability of EB Provisions. Section 202(d)(2)(A)
of the Act requires an individual to have 20 weeks of full-
time insured employment or the equivalent insured wages, as
determined under “the provisions of the state law implementing Section 202(a)(5)” of the Federal-State Extended Unemployment
Compensation Act (EUCA) of 1970. The equivalent in insured
wages under EUCA equals: 40 times the individual’s most recent
weekly benefit amount, or 1 and 2 times the individual’s high
quarter insured wages.

To determine which of these earnings requirements the state
may use to determine if the claimant has a qualifying
applicable benefit year for TEUC, the state must consult “the provisions of state law implementing Section 202(a)(5).” Thus,
for example, if the state law authorizes the use of just one
of the three requirements, the state may only use that single
requirement for TEUC purposes. If the state law authorizes
the use of two alternatives, then the state may use the two
alternatives and if the state law authorizes the use of all
three alternatives, then all three alternatives may be used.

The suitable work and work search requirements of Section

              Section III - Implementing the Requirements of the Act

202(a)(3) of the EUCA of 1970 do not apply to the TEUC
program. Neither do the subsequent employment provisions of
Section 202(a)(4) of the EUCA of 1970.

    e.   Effect of Other UI-Related Programs on Eligibility for
TEUC.

        (l) Trade Readjustment Allowances (TRA). The maximum
amount of TEUC payable to an individual who is also entitled
to TRA shall not be reduced by reason of TRA entitlement.
However, under Section 233(a)(1) of the Trade Act of 1974, the
individual's entitlement to TEUC will reduce the individual's
maximum amount of "basic" TRA payable if the TEUC is payable
during the UI benefit period established by or in effect at
the time of the individual's first TRA qualifying separation
under the applicable trade adjustment assistance certification
issued by this Department. (For the definition of "benefit
period," see 20 CFR 617.3(h).) If the TEUC entitlement occurs
during a UI benefit period subsequent to the one in which the
individual's first TRA qualifying separation occurred, the
maximum amount of "basic" TRA payable will not be reduced by
the amount of TEUC entitlement. In either case, however, the
individual is not eligible for TRA until TEUC entitlement is
exhausted.

The provisions of Section 233(d) of the Trade Act of 1974
(relating to reduction of EB entitlement because of the
receipt
of TRA in the most recent benefit year) are not applicable to
determinations of entitlement to TEUC.

        (2) Disaster Unemployment Assistance (DUA). An
individual is not eligible for DUA with respect to a week of
unemployment under Section 4l0 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5177)
if the individual is eligible to receive TEUC for that week.

6. Establishment of TEUC Account. Section 203 of the Act
requires the state to establish a TEUC account for each
eligible individual. There is no restriction on the total
amount of TEUC and regular compensation that is payable. Each
program stands alone.

            Section III - Implementing the Requirements of the Act

    a. TEUC Maximum Benefit Amount (MBA). The MBA in the
individual's account will be equal to the lesser of 50 percent
of the total amount of regular benefits (including dependents’ allowances) or 13 times the regular compensation WBA
(including dependents' allowances) payable to the individual
with respect to the “applicable benefit year” for TEUC purposes.
 In states with a regular duration in excess of 26 weeks, the
individual will be entitled to an MBA equal to 13 times the
average WBA, including dependents’ allowance.

If a redetermination or an appeal decision results in a
determination that an individual is entitled to more or less
regular compensation, the individual's status as an exhaustee
must be redetermined, as appropriate, and an appropriate
change shall be made in the individual's TEUC account.

    b. TEUC Second-Tier (TEUC-X). Individuals in some states
may be eligible for a second tier of TEUC depending on when
they exhaust their initial TEUC entitlement. Specifically,
individuals who exhaust their initial TEUC entitlement in an
EB period will qualify for TEUC-X in an amount equal to the
original TEUC entitlement. The same terms and conditions
applicable to the payment of the initial TEUC entitlement also
apply to TEUC-X.

TEUC-X may also be payable in some states where EB has not
triggered on. Section 203(d)(2)(B) of the Act provides that a
state will be treated as being in an EB period if Section
203(d) of the EUCA of 1970, which sets the 5 percent insured
unemployment rate trigger, contained a 4 percent trigger. All
requirements for an EB period using a 5 percent IUR must also
be met under the 4 percent trigger, including the 120 percent
“lookback” provision, the 13-week minimum “on” period, and the
13-week minimum “off” period if the state dips below the
required trigger. The beginning date of a state’s 4 percent
TEUC EB period will be based on when the state would have
triggered “on” using such a trigger. For example, if a state
would have triggered on EB for the week beginning March 3
using the 4 percent trigger, the state will remain on for a
TEUC EB period for at least 13 weeks from that date.

             Section III - Implementing the Requirements of the Act

The Department will provide regular notices to states of which
states qualify for TEUC second tier, and the beginning and
ending dates of the 4 percent TEUC EB period during which
TEUC-X is payable. See the reporting instructions for the ETA
539 in Section VI of this document.

7.   TEUC Weekly Benefit Amount.

    a. Total Unemployment. The WBA payable to an individual
for a week of total unemployment is equal to the individual's
most recent regular WBA including dependents' allowance for
the “applicable benefit year.”

    b. Partial and Part-Total Unemployment. To determine the
amount payable for a week of partial or part-total
unemployment, the state will calculate the payment amount in
accordance with the state law applicable to such a week of
unemployment.

8. Record Maintenance and Disposal of Records. The state
will maintain TEUC claims and payment data (including data on
eligibility, disqualification and appeals) as required by the
Employment and Training Administration (ETA).

    a. Record Maintenance. Each state will maintain records
pertaining to the administration of the TEUC program, and will
make all such records available for inspection, examination,
and audit by such federal officials or employees as the
Secretary of Labor or ETA may designate or as may be required
by the law.

    b. Disposal of Records. The electronic/paper records
created in the administration of the TEUC program shall be
maintained by the state for 3 years after final action
(including appeals or court action) on the claim, or for less
than the 3-year period if copied by micro photocopy or by an
electronic imaging method. At the end of the 3 year period,
the TEUC records are transferred to state accountability under
the conditions for the disposal of records that apply to UCFE
and UCX records as explained in Chapter XXII of ET Handbook
No. 391 (1992 Edition) and Chapter I, Page I-15, of ET
Handbook No. 384 (1984 Edition).

            Section III - Implementing the Requirements of the Act

9. Disclosure of Information. Information in records made
and maintained by the state agency in administering the Act
shall be kept confidential, and information in such records
may be disclosed only in the same manner and to the same
extent as information with respect to regular compensation,
and the entitlement of individuals thereto, may be disclosed
under the applicable state law. This provision on the
confidentiality of information obtained in the administration
of the Act shall not apply, however, to the requests for
information or reports from U.S. Department of Labor, or to
information, reports and studies with no individual
identifiers, or where the result would be inconsistent with
the Freedom of Information Act (5 U.S.C. 552), the Privacy Act
of 1974 (5 U.S.C. 552a) or regulations of the U.S. Department
of Labor promulgated thereunder.

10. Inviolate Rights to TEUC. Except as specifically
provided in these instructions, the rights of individuals to
TEUC shall be protected in the same manner and to the same
extent as the rights of persons to regular compensation are
protected under the applicable state law. Such measures must
include protection of claimants for TEUC from waiver, release,
assignment, pledge, encumbrance, levy, execution, attachment,
and garnishment, of their rights to TEUC. In the same manner
and to the same extent, individuals shall be protected from
discrimination and obstruction in regard to seeking, applying
for and receiving TEUC.

                 Section IV - Processing Claims for TEUC

1. Applicability of State Law Provisions. Under Section
202(d)(2) of the Act, except where inconsistent with the
Act, the terms and conditions of the state unemployment
compensation law which are applicable to claims for and
payment of regular compensation, apply to claims for, and
payment of, TEUC. The provisions of the applicable state
law apply to claims for TEUC include but are not limited to:

     a.   Claim Filing and Reporting;

     b.   Information to individuals, as appropriate;

    c. Notices to individuals and employers, as
appropriate, including notice to each individual of each
determination and redetermination of eligibility for or
entitlement to TEUC;

    d. Determinations, redeterminations, appeals, and
hearings;

    e. Disqualification, including disqualifying income
provisions;

     f.   Ability to work and availability for work;

     g.   The Interstate Benefit Payment Plan; and

    h. The Interstate Arrangement for Combining Employment
and Wages.

2.   Claims for TEUC.

    a. Intrastate Initial Claims. An initial claim for
TEUC shall be filed by an individual according to the
applicable state’s manual, remote or electronic filing
procedures.

    b. Interstate Initial Claims. Interstate TEUC claims
are filed on the same forms and in the same manner as all
other interstate initial claims against the liable state.
Before accepting an initial TEUC claim, the agent or liable
state, whichever is taking the claim, must review the
individual's work history, examine potential entitlement and
advise the individual of all filing options. If the
individual has sufficient employment and wages to establish

                 Section IV - Processing Claims for TEUC
 a new benefit year under any state or federal program,
 including the combined wage arrangement, no right to file
 under the TEUC program exists. When an initial TEUC claim
 is filed through the agent state, the state will:

          (1) Complete an Initial Interstate Claim, Form
  IB-1, check claim type "other" and identify as TEUC;
        (2) Review the individual's work history and advise
the individual of all filing options;

       (3)   Transmit a TC-IBl to the liable state.

    c. Intrastate and Interstate Weeks Claimed. Claims for
payments of TEUC for weeks of unemployment shall be filed at
the same times and in the same manner as claims for regular
compensation are filed under the applicable state law, and on
forms or following electronic filing procedures as furnished
to the individual by the state agency.

    d. Combined Wage Claims. TEUC shall be payable to
individuals filing under the Interstate Arrangement for
Combining Employment and Wages (CWC) in the same manner and to
the same extent that benefits are payable to other intrastate
or interstate claimants.

Administrative, entitlement and eligibility requirements
provided in this document also apply to claims filed under the
CWC program, except where clearly inconsistent with combined
wage (and interstate, when applicable) procedures, policies
and rules.

        (1) Report of Determination of Combined-Wage Claim,
TC-IB5. When a TEUC determination or redetermination is issued
on a CWC claim, a TC-IB5 must be issued to the transferring
state.

        (2) Charging of TEUC to Transferring State. The
paying state will bill each transferring state for its pro
rata share of the amount paid during the quarter in the same
manner as regular benefits. This chargeback is necessary in
order for the state of coverage to identify benefits
attributable to state and local government employment and
employment with employers to which Section 501(c)(3) applies.
(See fiscal instructions in Section V).

                Section IV - Processing Claims for TEUC

3. Secretary's Standard. The procedures for reporting and
filing claims for TEUC shall be consistent with these
instructions and the Secretary's "Standard for Claim Filing,
Claimant Reporting, Job Finding and Employment Services"
(Employment Security Manual, Part V, sections 5000 et seq.).

4.   Determination of Entitlement:      Notices to Individual.

    a. Determination of Initial Claim. The state agency
shall promptly, upon the filing of an initial claim for TEUC,
determine whether the individual is eligible and, if the
individual is found to be eligible, the weekly and maximum
amounts of TEUC payable to the individual. The individual
must be issued an appealable determination.
    b. Determination of Weekly Claims. The state agency shall
promptly, upon the filing of a claim for a payment of TEUC for a
week of unemployment, determine whether the individual is
entitled to a payment of TEUC for such week, and, if entitled,
the amount of TEUC to which the individual is entitled to and
issue a prompt payment.

    c. Redetermination. The provisions of the applicable
state law concerning the right to request, or authority to
undertake, reconsideration of a determination pertaining to
regular compensation under the applicable state law shall
apply to determinations pertaining to TEUC.

    d. Notices to Individual. The state agency shall give
notice in writing to the individual of any determination or
redetermination of an initial claim and all weekly claims.
Each notice shall include such information regarding the right
to reconsideration or appeal, or both, as is furnished with
written notices of determinations and redeterminations with
respect to claims for regular compensation. The state agency
must also provide the following notice to all claimants filing
an initial claim for TEUC:

                                  NOTICE

       Under 18 U.S.C. ' 1001, knowingly and willfully
       concealing a material fact by any trick, scheme, or
       device or knowingly making a false statement in
       connection with this claim is a Federal Offense,
       punishable by a fine of not more than $10,000 or
       imprisonment for not more than five years, or both.

                 Section IV - Processing Claims for TEUC

    e. Promptness. Full payment of TEUC when due shall be
made with the greatest promptness that is administratively
feasible.

    f. Secretary's Determination Standard. The procedures
for making determinations and redeterminations and furnishing
written notices of determinations, redeterminations, and
rights of appeal to individuals claiming TEUC shall be
consistent with the Secretary's "Standard for Claim
Determinations - Separation Information" (Employment Security
Manual, Part V, sections 6010 et seq.)

5.    Appeal and Hearing

    a. Applicable State Law. The provisions of the
applicable state law concerning the right of appeal and fair
hearing from a determination or redetermination of entitlement
to regular compensation shall apply to determinations and
redeterminations of eligibility for or entitlement to TEUC.

         b. Rights of Appeal and Fair Hearing. The provisions on
     right of appeal and opportunity for a fair hearing with
     respect to claims for TEUC shall be consistent with these
     instructions and with sections 303(a)(1) and 303(a)(3) of the
     Social Security Act (SSA) (42 U.S.C. 5O3(a)(1) and 503(a)(3)).

        c.   Promptness of Appeals Decisions.

             (1) Decisions on appeals under the TEUC Program shall
     accord with the Secretary's "Standard for Appeals Promptness-
     Unemployment Compensation" in 20 CFR Part 650.

             (2) Any provision of an applicable state law for
     advancement or priority of unemployment compensation cases on
     judicial calendars, or otherwise intended to provide for the
     prompt payment of unemployment compensation when due, shall
     apply to proceedings involving entitlement to TEUC.

        6. Fraud and Overpayment. The Act contains specific
     provisions with respect to fraud and overpayments of TEUC.
     Provisions of the state law applied to detection and
     prevention of fraudulent overpayments of TEUC will be, as a
     minimum, commensurate with those applied by the state with
     respect to regular compensation and which are consistent with
     the Secretary's "Standard for Fraud and Overpayment Detection"

               Section IV - Processing Claims for TEUC
(Employment Security Manual, Part V, Sections 7510 et seq.).

    a. Fraudulent Claiming of TEUC. Section 206 of the Act
provides that, if an individual knowingly has made, or caused
to be made by another, a false statement or representation of
a material fact, or knowingly has failed, or caused another to
fail, to disclose a material fact, and as a result of such
false statement or representation or of such nondisclosure the
individual has received an amount of TEUC to which the
individual was not entitled, the individual:

        (1) shall be ineligible for further TEUC in
accordance with the provisions of the applicable state
unemployment compensation law relating to fraud in connection
with a claim for unemployment compensation, and

        (2) shall be subject to prosecution under Section
1001 of Title 18, U.S.C.

Provisions of state law relating to disqualification for
fraudulently claiming or receiving a payment of compensation
shall apply to claims for and payment of TEUC.

When a state has sufficient facts to make a prima facie case
under 18 U.S.C. 1001, it will consider referral for criminal
prosecution in accordance with the provisions of the
Memorandum of Understanding (MOU) between the Department's
Office of Inspector General and the Employment and Training
Administration, which was transmitted as an attachment to UIPL
10-87 (also see UIPL 16-85 and 21-90). If Federal prosecution
is recommended, the matter will be referred to the appropriate
Regional Office of the U.S. Department of Labor, Office of the
Inspector General (OIG).

For those cases not meeting the criteria for referral to the
OIG for investigation and prosecution, as outlined in the MOU,
or if the OIG does not accept the case for investigation, or
it is accepted, but is later returned because the U.S.
Attorney declines prosecution, the state should refer the case
for prosecution under state law provisions.

    b. Recovery of Overpayments. Under Section 206(b) of the
Act each state shall require repayment from individuals who
have received any payment of TEUC to which they are not
entitled (whether fraudulent or non-fraudulent), unless the
state, under the optional language of Section 206(b), elects
to waive recovery. A state may elect to implement a TEUC
waiver procedure even if it has no waiver provisions under

               Section IV - Processing Claims for TEUC
state law for regular compensation. If the state elects to
have a TEUC waiver and has a state law waiver provisions for
regular compensation, the state provision may be applied to
TEUC.

Any state that does not have a state waiver provision but
elects to have a TEUC waiver may waive recovery of a non-
fraudulent TEUC overpayment if it determines that-

                - the payment of such TEUC was without fault on the
part of the individual, and

                - such repayment would be contrary to equity and
good conscience.

        (1) In determining whether fault exists, the
following factors shall be considered:

             (a) whether a material statement or
representation was made by the individual in connection with
the application for TEUC that resulted in the overpayment, and
whether the individual knew or should have known that the
statement or representation was inaccurate.

             (b) whether the individual failed or caused
another to fail to disclose a material fact, in connection
with an application for TEUC that resulted in the overpayment,
and whether the individual knew or should have known that the
fact was material.

             (c) whether the individual knew or could have
been expected to know that the individual was not entitled to
the TEUC payment.
             (d) whether, for any other reason, the
overpayment resulted directly or indirectly, and partially or
totally, from any act or omission of the individual or of
which the individual had knowledge, and which was erroneous or
inaccurate or otherwise wrong.

        (2) In determining whether equity and good conscience
exists, the following factors shall be considered:

            (a) whether the overpayment was the result of a
decision on appeal;

            (b) whether the state agency had given notice to
the individual that the individual may be required to repay
the overpayment in the event of a reversal of the eligibility

               Section IV - Processing Claims for TEUC
determination on appeal; and

            (c) whether recovery of the overpayment will
cause financial hardship to the individual.

        (3) Unless an TEUC overpayment is otherwise
recovered, or is waived, the state shall, during the three-
year period after the date the individual received the payment
of TEUC to which the individual was not entitled, recover the
overpayment by deductions from any sums payable to the
individual under:

            (a) any federal unemployment compensation law
administered by the state; or

            (b) any other federal law administered by the
state which provides for the payment of any assistance or an
allowance with respect to unemployment.

        (4) No single deduction may exceed 50 percent of the
amount otherwise payable to the individual.

        (5) To the extent permitted under state law, a TEUC
overpayment may be recovered by offset, within the 50 percent
and three-year limitations provided in paragraphs (3) and (4)
above, from benefits payable under the state unemployment
compensation law.

        (6) At the end of the three-year limitation, the
state may remove the overpayment from its accounting record.
Although no further active collection efforts by the state are
required, the state shall maintain an administrative record
during the subsequent three-year period to provide for
possible collection through methods other than offset. After
the subsequent three-year period, the state may dispose of the
overpayment record.

        (7) No repayment may be required, and no deduction
may be made, until a determination under paragraph 2. of this
section has been made, notice of the determination and an
opportunity for a fair hearing thereon has been given to the
individual concerned, and the determination has become final.

        (9) TEUC overpayment recovery shall be enforced by any
action or proceeding which may be brought under state or
federal law, unless recovery of the overpayment is waived or
prohibited in accordance with the Act and the instructions in
this section.

               Section IV - Processing Claims for TEUC

Overpayments of TEUC recovered in any manner shall be
deposited into the fund from which payment was made.

    (10) If a state has an agreement in effect with the
Secretary to implement the cross-program offset provisions of
Section 303(g)(2) of the SSA, TEUC payments shall be used to
offset state compensation overpayments, and state compensation
payments shall be used to offset TEUC overpayments. If the
state does not have an agreement with the Secretary under
Section 303(g)(2), SSA, the state must not use TEUC to offset
a state compensation overpayment, but may under Section
303(g)(1), SSA, offset state compensation payments to recover
a TEUC overpayments.

    (11) An individual who has a TEUC overpayment established
may have the amount of such overpayment restored to the TEUC
account established for such individual in accordance with the
state law for regular compensation.

    (12) If the state elects to implement a TEUC waiver
program, it may not put such election into effect unless it
has published agency instructions on such election.

                    Section V - Fiscal Instructions

1. Payment to States. Under Section 204 of the Act each
state which has entered into an agreement to pay TEUC will be
paid an amount equal to l00 percent of the amount of TEUC paid
to individuals by the state under the agreement and in full
accordance with the Act and these instructions.

    a. Requesting TEUC Benefit Funds. States will request
funds from the Extended Unemployment Compensation Account
(EUCA) to pay all TEUC benefits attributable to all claim
types (UI, UCFE, and UCX). Drawdown procedures are not
changed --- all requests go through the Automated Standard
Application for Payments (ASAP) system. Drawdown requests
must adhere to the funding mechanism stipulated in the
Treasury-State Agreement executed under the Cash Management
Improvement Act of 1990. Requests will be funded in the same
manner as all ASAP transactions elected by the states (FEDWIRE
or ACH to the state benefit payment account). See paragraph
3. of this section for specific instructions.

Benefits paid to former employees of state and local
governments, “501(c)(3)” nonprofit organizations and federally
recognized Indian tribes are funded from U.S. Treasury general
revenues through the EUCA.    This does not affect the process
for requesting funds, but does affect the reporting of those
benefits on the ETA 2112. States are to report all TEUC
payments, including reimbursable, UCFE/X on line 39, column F.
  (Note that it does not matter whether these employers have
elected reimbursement status.) See the reporting instructions
in Section VI for details.

    b. TEUC Administrative Funds. Section 205(c) of the Act
appropriated funds from the Employment Security Administration
Account (ESAA) in the Unemployment Trust Fund, to pay costs
related to the administration of the TEUC agreement. Section
205(c) also authorizes the Secretary to determine each state’s
share of the amount appropriated according to the factors
described in section 302(a) of the Social Security Act (42
U.S.C. 501(a)). States will receive TEUC administrative funds
through the contingency entitlement process. (See Section VI,
Paragraph 3.h.)

2.   TEUC Reporting Instructions.

    a. Time Distribution. Time used for all TEUC activities,
except for initial claims, will be charged to appropriate UI
functional activity codes, in conjunction with the regular UI

grant number. Time used for TEUC initial claims will be
charged to a functional activity code separate from the code
for all other UI initial claims, e.g., code 251.

      b. Administrative Fund Accounting. All accounting for
  administrative resources relating to the TEUC program will be
  recorded in the regular UI grant.

      c.   Accounting for TEUC Payments (Benefits).

          (1) TEUC advances to the states' UTF accounts, and
  disbursements for TEUC benefit payments will be reported on
  the monthly ETA 2112. Do not use a separate form for this
  report. (See Section VI, Reporting Instructions.) Accurate
  reporting of advances, reimbursements and payments is
  important due to the monthly reconciliation of balances with
  OWS records; balances are subject to constant congressional
  and public inquiries.

          (2) Since TEUC paid to UCFE and UCX will be funded
  out of General Revenues, the Federal Employees Compensation
  (FEC) Account will not be used to pay TEUC benefits.
  Therefore, federal agencies will not be required to reimburse
  the Unemployment Trust Fund for TEUC paid to federal
  employees. The ETA 191 report and UCFE/UCX detailed claimant
  data provided by states to Federal agencies must exclude TEUC.

    3. Drawdown Instructions for TEUC. Beginning on March 15,
  2002, there will be 5 new lines in the Automated Standard
  Application for Payments System (ASAP) as follows:

  ASAP Line TitleY                          Is Used forY

  TEUC (CONTRIBUTORY)                      State withdrawal of
                                           temporary extended
                                           unemployment compensation
                                           benefits for contributory
                                           workers.

  TEUC (FECA AND UCX)                      State withdrawal of
                                           temporary extended
                                           unemployment compensation
                                           benefits for
                                           federal/military workers.

  TEUC (LOCAL AND OTHER GOVT)              State withdrawal of
                                           temporary extended
                                           unemployment compensation

                                       benefits for local and other
                                       government workers, and
                                       Indian tribes.

TEUC (STATE GOVT)                      State withdrawal of
                                       temporary extended
                                       unemployment compensation
                                       benefits for state
                                       government workers.

TEUC (NON-PROFITS)                     State withdrawal of
                                       temporary extended
                                       unemployment compensation
                                       benefits for Non-Profit
                                       workers.

     a. Processing Refunds. There are two scenarios for
returning funds to these program lines. The most likely
scenario will be when the state has funds in their state UI
account and they need to return those funds. This should be
completed as a negative amount posted to the appropriate line
in ASAP. To accomplish this, the total draw for the day in
ASAP must be greater than the negative balance posted to the
appropriate line.

The second scenario is when a state actually has the funds in
its federal UI account that are required to be returned to the
appropriate program line. This should be accomplished by the
state processing a book transfer transaction that accomplishes
a transfer from its UI account to the appropriate program
under the EUCA account.

                     Section VI - Reporting Instructions

1. General. The TEUC program reports, ETA 207, ETA 218, ETA
227, ETA 5130 and ETA 5159 should be submitted electronically
by utilizing separate TEUC entry screens that are available
through the UI Required Reports electronic reporting system.
These reports will mirror the reports required for the regular
Federal-State Extended Benefits program. TEUC activity should
also be reported on the ETA 2112, ETA 539 and UI-3 as
specified below in section 2. Unless otherwise noted,
definitions of items will follow definitions in the regular
program as specified in ETA Handbook 401, 3rd Edition. Due
dates will be the same as the regular versions of reports.

Reporting will begin with the first reporting period in which
the effective date of the TEUC program falls. Reporting for
all
reports except the ETA 2112 will continue for twelve full
months
or four full quarters after the last payable week of the TEUC
program. For those reporting periods in this post-TEUC time
frame, only reports which have non-zero data need be
submitted.
Reporting on the ETA 2112 should continue for as long as there
is activity.

2.   Data Items to be Reported.

     a. ETA 207. Report column 1, Total Determinations and
Redeterminations, for lines 101 through 106. Report also
lines
201 and 202, columns 7 through 10; and lines 301 and 302,
columns 11, 12, 14, and 17.

     b.   ETA 218.     Report line 100, columns 1 through 3.

     c. ETA 227. Report Section A, Overpayments Established,
lines 101 and 103, for columns 2 through 5. Also report all
of Section C, Recovery/Reconciliation, excluding lines 303-
307, columns 11-14.

     d.   ETA 5130.    Report all data elements.

     e. ETA 5159. For Section A Claims Activities, report
initial claims information for columns 2 through 5 and column
7 for lines 101 through 103. Report eligibility reviews and
continued weeks claimed activity for columns 8 through 12 for
lines 201 through 203. The claims information needed for

column 11 for lines 201 through 203 will be identified as
entitlement type Acode 2" (Federal Benefit Extension) field
number 28 on the Interstate Liable-Agent Data Transactions
(LADT). For Section B, Payment Activities, report columns 14,
15, 17, 18, and 19 for lines 301 through 302 and columns 21
and columns 24 through 28 for line 303.

         (1)   First Payments.      One first payment under TEUC.

            (2) Final Payments. A final payment is to be
  reported when a payment is issued that exhausts the benefit
  entitlement in the individual’s TEUC account.

       f. ETA 2112. Regular activity should be reported in the
  aggregate on the electronic regular ETA 2112 report as usual.
   Information reflecting TEUC activity should be reported as
  follows:

            Line 15. Reed Act Distributions. Include all Reed
  Act distributions to the state account in the UTF.

            Line 16. Intra-Account Transfer. Include in line
  16F the amount of TEUC funds transferred from the UTF to the
  state benefit payment account.

            Line 23. Federal Emergency Compensation. Enter in
  columns C and E the amount of Federal funds received as
  advances or reimbursement for emergency compensation including
  the TEUC.

            Lines 33, 34, 35. Enter total benefits paid,
  attributable to state and local governments, “501(c)(3)”
  nonprofits, and Indian tribes, as appropriate, on the
  appropriate line for the type of employer. Break out the TEUC
  amounts paid for each line in the “Comments” section.

            Line 39. Federal Emergency Compensation. Enter all
  disbursements for federal emergency programs. Include in
  columns C and F the amounts of the TEUC for which the Federal
  government is liable. Include residual activity (e.g.,
  overpayment recoveries) from expired emergency programs (e.g.,
  EUC, FSC, FSB) on line 39. Break out all disbursements by
  program in the “Comments” section.

            Line 41. Reed Act Withdrawals. Enter all Reed Act
  funds withdrawn from the state account in the UTF.

          Line 50. Withholding. States are to report gross
benefits in column F regardless whether amounts of withholding
transferred to the IRS goes through the state benefit payment
account. See ETA Handbook 401, 3rd Edition, for specific
instructions. Line 16 F must equal Line 44E.

     g. ETA 539. Total weeks claimed for State, UCFE, and
UCX under the TEUC program for the report period will be
reported in the comments section and labeled as "TEUC"
followed by the number. For example: "TEUC=239". (The agent
weeks claimed information needed for this report will be
obtained from the LADT identified in field 28 as Acode 2",
Federal Benefit Extension.)

     h. UI-3 Worksheet. TEUC claims activity/workload
activity will be reported electronically on the lines for
third tier programs on the regular UI-3 report.

3. Notification of a TEUC EB Trigger. States with a TEUC
agreement with the Secretary may already have triggered or may
trigger a TEUC EB period under the requirements of Section
203(c) of the Act. A letter from the governor or appropriate
state official declaring that the state has triggered either
on or off the TEUC EB period based on the 4 percent IUR is
required in the same manner as for an EB period under EUCA.

States with a 4 percent IUR as of enactment of the TEUC Act
should immediately declare a TEUC EB period indicating a
beginning date in accordance with the requirements of 20 CFR
615.12. Send letter to: Ms. Grace Kilbane
                        Office of Workforce Security
                        200 Constitution Avenue, N.W.
                        Room S-4231
                        Washington, D.C. 20210
.
Any paper reports should be faxed to 202-693-3229 instead of
mailing. The cover sheet should indicate delivery to UI
Required Reports.

4. OMB Approval. These instructions have been submitted to
the Office of Management and Budget (OMB), but have not yet
been approved. Therefore, they should be considered draft
instructions of proposed data collections. ETA will notify
states upon OMB approval and communicate any changes deemed
necessary during the OMB approval process.