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[Federal Register Volume 81, Number 164 (Wednesday, August 24, 2016)]
[Rules and Regulations]
[Pages 57764-57784]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-18382]

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DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 615

RIN 1205-AB62

Federal-State Unemployment Compensation Program; Implementing the 
Total Unemployment Rate as an Extended Benefits Indicator and Amending 
for Technical Corrections; Final Rule

AGENCY: Employment and Training Administration, Labor.

ACTION: Final rule.

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SUMMARY: The Employment and Training Administration (ETA) of the U.S. 
Department of Labor (Department) issues this final rule to implement 
statutory amendments to the Extended Benefits (EB) program, which pays 
extra weeks of unemployment compensation during periods of high 
unemployment in a State. Specifically, this final rule codifies a 
methodology for computing the Total Unemployment Rate (TUR) indicator 
which is an optional indicator used to measure unemployment in a State. 
Also, the final rule makes technical corrections to the current 
regulations and corrects minor mistakes.

DATES: This rule is effective October 24, 2016.

FOR FURTHER INFORMATION CONTACT: Gay Gilbert, Administrator, Office of 
Unemployment Insurance, Employment and Training Administration, (202) 
693- 3029 (this is not a toll-free number) or 1-877-889-5627 (TTY). 
Individuals with hearing or speech impairments may access the telephone 
number above via TTY by calling the toll-free Federal Information Relay 
Service at (800) 877- 8339.

SUPPLEMENTARY INFORMATION:

Executive Summary

I. Purpose of the Regulatory Action

    a. ETA issues this final rule to implement statutory amendments to 
the EB program, which pays extra weeks of unemployment compensation 
during periods of high unemployment in a State. Specifically, this 
final rule codifies a methodology for computing the TUR indicator, 
which is an optional indicator used to measure unemployment in a State. 
Also, the final rule makes technical corrections to the current 
regulations and corrects minor mistakes.
    b. The Unemployment Compensation Amendments of 1992, Public Law 
102-318, added Section 203(f), EUCA, to provide for an optional 
alternative indicator that States may use to trigger ``on'' EB based on 
the TUR. That indicator requires that, for the most recent 3 months for 
which data for all States is published, the average TUR in the State 
(seasonally adjusted) for the most recent 3-month period equals or 
exceeds 6.5 percent and the average TUR in the State (seasonally 
adjusted) equals or exceeds 110 percent of the average TUR for either 
or both of the corresponding 3-month periods in the 2 preceding 
calendar years (look-back). The 1992 amendments also provided for a 
calculation of a ``high unemployment period'' when the TUR in a State 
equals or exceeds 8 percent and meets the 110-percent look-back 
described above, permitting the payment of additional weeks of EB. 
Section 203(f)(3), EUCA, provides that ``determinations of the rate of 
total unemployment in any State for any period . . . shall be made by 
the Secretary.'' An EB period ends when the State no longer meets any 
of the ``on'' triggers provided for in State law.

[[Page 57765]]

II. Summary of the Major Provisions of the Regulatory Action in 
Question

    To conform the regulations to current practice, the Department is 
issuing this final rule to describe how the TUR indicators are computed 
for purposes of determining whether a State meets the 110 percent look-
back requirements. The final rule regulations at 20 CFR 615 implement 
the provisions of EUCA relating to the insured unemployment rate (IUR) 
indicators, including how they will be computed. The regulation, at 20 
CFR 615.12, explains the IUR triggers and how the rates are computed. 
Until this final rule, the regulation did not address the TUR indicator 
although the Department issued UIPLs No. 45-92 and No. 16-11, 
respectively, addressing the TUR indicator and its computation.
    Because of these differences in the calculation of the insured and 
total unemployment rates, the appropriate methodology for computing the 
look-back percentage for the TUR indicator is to switch from truncation 
at the second decimal place, which is used for calculating the IUR 
indicator, to rounding to the second decimal place.

III. Costs and Benefits

    This rule has not been designated an economically significant rule 
under section 3(f) of Executive Order 12866. However, the Department 
provides an analysis of the impact of the final rule, including a costs 
and benefits analysis under Executive Order 13563, in the 
Administrative Section of this final rule. This costs and benefits 
analysis was conducted for the proposed rule. Since the Department made 
no changes in the final rule, a new analysis was not conducted.
    The Preamble to this final rule is organized as follows:

I. Background--provides a brief description of the development of 
the final rule.
II. Review of the Final Rule--analyzes comments and summarizes and 
discusses changes to the Federal-State Unemployment Compensation 
Program.
III. Administrative Information--sets forth the applicable 
regulatory requirements.

I. Background

    An understanding of the basic elements that comprise the mechanisms 
used to determine if EB is payable in a State is necessary to 
appreciate the dynamics of the EB program. EB programs can be triggered 
by two different measures for unemployment: The IUR and TUR. The table 
below compares the characteristics of each.

------------------------------------------------------------------------
       Characteristics                 IUR                   TUR
------------------------------------------------------------------------
Type of Data................  Administrative......  Sample.
Definition..................  Continued Claims/     Unemployed/
                               Covered Employment.   Employed+Unemployed
                                                     .
Seasonally Adjusted.........  No..................  Yes.
Data Source.................  States..............  Bureau of Labor
                                                     Statistics.
Collection Frequency........  Weekly..............  Monthly.
Trigger Value Computation...  13-Week Moving        3-Month Moving
                               Average.              Average.
------------------------------------------------------------------------

    EB is payable in a State only during an EB period of unusually high 
unemployment in the State. Section 203 of the Federal-State Extended 
Unemployment Compensation Act of 1970 (EUCA), Public Law 91-373, 
provides methods for determining whether a State's current unemployment 
situation qualifies as an EB period. EB periods are determined by 
``on'' and ``off'' indicators (commonly referred to as triggers) in the 
State. Section 203(d), EUCA, provides for an ``on'' indicator based on 
the IUR. The IUR is computed weekly by the States using administrative 
data on State unemployment compensation claims filed and the total 
population of employed individuals covered by unemployment insurance. 
States trigger ``on'' EB if the IUR trigger value for the most recent 
13-week period equals or exceeds 5 percent and equals or exceeds 120 
percent of the average of such trigger values for the corresponding 13-
week period ending in each of the preceding 2 calendar years. The 
calculation of the relationship between the current rate and prior 2 
years' rates is commonly referred to as the ``look-back.''
    The Unemployment Compensation Amendments of 1992, Public Law 102-
318, added Section 203(f), EUCA, to provide for an optional alternative 
indicator that States may use to trigger ``on'' EB based on the TUR. 
That indicator requires that, for the most recent 3 months for which 
data for all States is published, the average TUR in the State 
(seasonally adjusted) for the most recent 3-month period equals or 
exceeds 6.5 percent and the average TUR in the State (seasonally 
adjusted) equals or exceeds 110 percent of the average TUR for either 
or both of the corresponding 3-month periods in the 2 preceding 
calendar years (look-back). The 1992 amendments also provided for a 
calculation of a ``high unemployment period'' when the TUR in a State 
equals or exceeds 8 percent and meets the 110 percent look-back 
described above, permitting the payment of additional weeks of EB. 
Section 203(f)(3), EUCA, provides that ``determinations of the rate of 
total unemployment in any State for any period . . . shall be made by 
the Secretary.'' An EB period ends when the State no longer meets any 
of the ``on'' triggers provided for in State law.
    Regulations at 20 CFR part 615 implement the provisions of EUCA 
relating to the IUR indicators, including how they will be computed. 
The regulation at 20 CFR 615.12 explains the IUR triggers and how the 
rates are computed. The regulation does not address the TUR indicator 
although the Department issued UIPLs No. 45-92 and No. 16-11, 
respectively, addressing the TUR indicator and its computation. To 
conform the regulations to current practice, the Department is issuing 
this final rule to describe how the TUR indicators are computed for 
purposes of determining whether a State meets the 110 percent look-back 
requirements.
    In the absence of explicit guidance and regulation, the Department 
previously adapted a portion of the existing guidance for the IUR look-
back as a basis for calculating the TUR look-back. Specifically, in 
computing the look-back percentage for the TUR trigger the procedure 
for determining the number of significant digits from the resulting 
fraction followed 20 CFR 615.12(c)(3).
    The TUR indicator uses total unemployment rates determined by the 
Bureau of Labor Statistics (BLS). These rates are measured using 
sampled data and therefore are imprecise due to sampling error. In 
order to ensure that the TUR indicator is measured with more 
consistency to similar measures, and to the extent possible, a more 
accurate measure, the Department has determined that an appropriate 
methodology for computing the look-back on the TUR indicator is to 
switch from truncation to rounding to the nearest hundredth, or second 
decimal place. Additionally, rounding, rather than truncating, is 
consistent with BLS practices in treating the TUR data. UIPL No. 16-11, 
dated May 20, 2011,

[[Page 57766]]

informed the State Workforce Agencies (SWAs) that the full effect of 
this new rounding procedure was implemented retroactive to April 16, 
2011.

General

    Section 3304(a)(11) of the Federal Unemployment Tax Act (26 U.S.C. 
3301 et seq.) (FUTA) requires, as a condition of employers in States 
receiving credits against the Federal unemployment tax, that the 
States' unemployment compensation laws provide for the payment of 
extended unemployment compensation during periods of high unemployment 
to eligible individuals. EUCA established the EB Program by which, if 
certain conditions are met in a State under its law, extended 
unemployment compensation is provided to workers in the State who have 
exhausted their regular compensation during a period of high 
unemployment referred to as an EB period. EUCA provides methods for 
determining whether an EB period exists in the State. These methods are 
referred to as ``on'' or ``off'' indicators.
    There were two ``on'' and ``off'' indicators in existence before 
the enactment of the UC Amendments. These indicators were based on the 
IUR. The IUR indicator's trigger value is, under section 203(e) of 
EUCA, the ratio of the average number of unemployment claims filed in a 
State during the most recent 13 weeks to the average monthly number of 
employed individuals covered by UC in that State during the first four 
of the last six completed calendar quarters. The first indicator has 
two conditions which must be met and is required to be in State law. 
Under section 203(d) of EUCA, the EB Program is activated if a State's 
IUR trigger value (first condition) is at least 5 percent (referred to 
as the regular IUR trigger threshold with ``look-back''), and is at 
least 120 percent of the average of the trigger values in the prior 2 
years for the corresponding 13-week calendar periods (second 
condition). The second condition--that the most recent 13-week period 
must be at least 120 percent of the average of the corresponding 
periods in the last 2 years--is commonly referred to as the ``look-
back'' provision. (The Tax Relief, Unemployment Insurance 
Reauthorization, and Job Creation Act of 2010, Public Law 111-312, 
allowed States to temporarily modify provisions in their EB laws to use 
the prior 3 years in applying the look-back.) The look-back provision 
supports activation of a State's EB Program only when the current 
unemployment rate is both high and increasing, which indicates that the 
State's labor market is worsening and additional compensation is 
warranted. Under the second indicator, which is an option for a State, 
section 203(d) of EUCA provides the EB Program may be triggered ``on'' 
with an IUR trigger value of at least 6 percent regardless of its 
relation to the IUR trigger values in the preceding 2 years. The 6 
percent value is referred to as the regular IUR trigger threshold 
without look-back.
Alternative Indicator
    Because the IUR indicator failed to trigger many States ``on'' to 
the EB Program during the recession of the early 1990s, the UC 
Amendments amended the EUCA to permit States to adopt an alternative, 
more labor market sensitive, indicator based on the TUR to trigger 
``on'' and ``off'' the EB Program. Specifically, paragraph (f) of 
section 203 of EUCA provides for a TUR indicator comprised of a Trigger 
Value and look-back provision. The Trigger Value for this indicator is 
the 3-month average of seasonally adjusted TURs for the most recent 3 
months for which data for all States is published. The regular TUR 
trigger threshold is 6.5 percent. The look-back provision requires that 
the Trigger Value equals or exceeds 110 percent of the TUR Trigger 
Values for either or both of the corresponding 3-month periods in the 2 
preceding calendar years. The TUR Trigger Value is determined by the 
Department based on data from BLS.
    As with the IUR indicator, the look-back provision ensures that the 
State's TUR Trigger Value is both high and increasing, indicating that 
the State's labor market is worsening and additional compensation is 
warranted. A State will trigger ``off'' its EB Program when either the 
TUR Trigger Value falls below 6.5 percent, or the requirements 
pertaining to the look-back provision are not satisfied.
    Regardless of whether a State's EB Program is triggered ``on'' 
based on the IUR or TUR indicators, sections 203(d)(2) and 203(f)(1)(B) 
of EUCA provide that the EB period is triggered ``off' when the 
conditions supporting the activation of the EB Program are no longer 
satisfied. Additionally, when the program triggers ``on'' or ``off'' EB 
payments, it must remain in the new status (``on'' or ``off'' EB 
payments) for a minimum of 13 weeks regardless of changes in future 
trigger values.
    The Department implemented EUCA's provisions on the IUR indicator 
at 20 CFR part 615, published in 53 FR 27928, Jul. 25, 1988. The 
Department implemented the alternative TUR indicator provided by the UC 
Amendments through guidance on August 31, 1993 (UIPL No. 45-92). The 
Department now incorporates the TUR indicator into regulations.
Payments of Additional Weeks of Extended Benefits
    The UC Amendments provided that States electing to use the new TUR 
indicator must also provide for the payment of additional weeks of EB 
during a ``high unemployment period'' that occurs during an EB period. 
These additional weeks of EB are available if State law provides for 
the use of the alternative TUR indicator.
    Consistent with EUCA Sec.  203(b)(1), no EB period or high 
unemployment period may begin in any State by reason of a State ``on'' 
indicator before the 13-week minimum status period expires after the 
ending of a prior EB period with respect to such State. Conversely, no 
EB period or high unemployment period may end in any State by reason of 
a State ``off'' indicator before the 13-week minimum status period 
expires after the beginning of an EB period with respect to such State.
    EUCA originally provided for the establishment of an EB account, 
and the amount in the account is the least of one of three amounts 
which is payable for regular extended compensation. The UC amendments 
added a new paragraph to section 202(b) of EUCA that increases the 
amount in these accounts during a high unemployment period. The amount 
payable in a high unemployment period is equal to whichever of the 
following is the least and is referred to as ``high unemployment 
extended compensation'':
--80 percent (as opposed to 50 percent in a ``normal'' EB period) of 
the total amount of regular UC (including dependent's allowances) 
payable to the individual during the benefit year;
--20 (as opposed to 13) times the individual's weekly benefit amount; 
or
--46 (as opposed to 39) times the individual's weekly benefit amount, 
reduced by the regular UC paid (or deemed paid) during the benefit 
year.

    The term ``high unemployment period'' is defined in Section 
202(b)(3)(B), EUCA, as any period during which an EB Program would be 
in effect if the TUR indicator equaled or exceeded 8 percent and the 
TUR indicator equals or exceeds 110 percent of the TUR indicators for 
either or both the corresponding 3-month periods in the 2 previous 
calendar years.
    Whether a high unemployment period exists in a State for a 
particular week is determined in accordance with provisions of State 
law implementing sections 202(b)(3) and 203(f) of EUCA

[[Page 57767]]

and the seasonally adjusted TUR indicator determined by BLS. When this 
determination is made, the State follows the requirements of sections 
203(a) and (b) of EUCA for determining the first and last week for 
which high unemployment EB is payable. Specifically, a high 
unemployment EB period begins on the first day of the third calendar 
week after the TUR indicator requirements are satisfied, and ends on 
the last day of the third week after the first week for which the TUR 
indicator requirements are not met. However, as stated above, no EB 
period or high unemployment period may begin in any State by reason of 
a State ``on'' indicator before the 13-week minimum status period 
expires after the ending of a prior EB period with respect to such 
State.

Alternative Indicator Rounding Methodology

    Before April 16, 2011, in absence of explicit statutory guidance 
and regulation, the Department adapted a portion of the requirement (in 
20 CFR 615.12) for calculating the look-back percentage for the IUR 
indicator as a basis for determining the significant number of digits 
from the look-back percentage for the TUR indicator. Specifically, the 
quotient is computed to two decimal places and multiplied by 100 with 
all numbers to the right of the decimal point being dropped (known as 
``truncation''). The result is expressed as a percentage.
    The UC Amendments provide for a State to trigger ``on'' EB using 
the TURs determined by BLS. As discussed above, because the TUR 
indicator uses unemployment rates determined by BLS using sampled data, 
the rates are imprecise due to sampling error. In order to ensure that 
the TUR indicator is measured with more consistency to similar 
measures, and to the extent possible, a more accurate measure, the 
Department has determined that an appropriate methodology for computing 
the look-back on the TUR indicator is to switch from truncation to 
rounding to the nearest hundredth. In contrast, the IUR indicator 
values are computed from administrative data and thus represent the 
full universe. Because of these differences in the calculation of the 
insured and total unemployment rates, on May 20, 2011 the Department 
announced, in UIPL No. 16-11, that an appropriate methodology for 
computing the look-back percentage for the TUR indicator is to switch 
from truncation at the second decimal place to rounding to the second 
decimal place.
    UIPL No. 16-11 informed States of the new rounding methodology the 
Department now employs when computing the current trigger rate as a 
percent of the comparable trigger rates in prior years for the TUR 
indicator. Since TURs have been rounded, an expression of a ratio of 
two TURs must also be rounded.
    On a monthly basis, the 3-month average of the seasonally adjusted 
TUR is divided by the same measure for the corresponding 3 months in 
each of the applicable 2 prior years. The resulting decimal fraction is 
then rounded to the hundredths place (the second digit to the right of 
the decimal place). The resulting number is multiplied by 100, reported 
as an integer, and compared to the statutory threshold to determine if 
the State triggers ``on'' EB. UIPL No. 16-11 informed the SWAs that the 
full effect of this new rounding procedure was implemented retroactive 
to April 16, 2011.

II. Review of the Final Rule

    The Department published the Notice of Proposed Rulemaking (NPRM) 
on the subject of this final rule in the Federal Register on October 
27, 2014 at 79 FR 63859. The NPRM had a 60-day public comment period 
and allowed for the submission of comments by hand delivery or U.S. 
Mail or by electronic submission at www.regulations.gov.
    At the close of the 60-day public comment period at midnight on 
December 26, 2014, the Department had received one public comment. 
After a careful analysis of the comment, which was posted on 
www.regulations.gov, the Department determined that the comment did not 
raise any substantive issues that required a response in the final 
rule. In addition, the Department received no requests for extensions 
of the public comment period.
    Therefore, because the Department did not receive any comments that 
required a response on the NPRM, this final rule adopts the regulation 
as proposed, with minor technical corrections explained below.
    The final rule updates 20 CFR part 615 so that it includes the TUR 
indicator. In addition, the final rule updates Part 615 to incorporate 
the rounding method adopted for the look-back. Also, the final rule 
makes technical amendments to this part to update its provisions since 
the last regulatory revision and to correct minor errors in the text of 
the existing regulations.
    However, since the NPRM publication, the Department discovered that 
minor technical corrections were needed. A non-substantive technical 
addition of a phrase was made in the definition of ``Department'' in 
Sec.  615.2 to acknowledge that a Secretary's Order delegating 
authority to ETA can be superseded. A non-substantive technical 
addition was made in the definition of ``Extended compensation'' in 
Sec.  615.2 to clarify that ``extended benefits'' can be used 
interchangeably with ``extended compensation.'' Non-substantive 
deletions were made, in the definition of ``Extended unemployment 
compensation'' in Sec.  615.2, of paragraphs (3) and (4). Paragraph (3) 
of Sec.  615.2 in the NPRM was deleted because it redundantly repeats 
the substance in paragraph (1) of that section. Paragraph (4) of Sec.  
615.2 was deleted because it was placed in this location of the NPRM 
erroneously, simply as a typographical error.
    For ease of reading Sec.  615.2, the definitions in this section 
have been printed in their entirety. The following definitions are 
unchanged with the exception of changing Act to EUCA where appropriate: 
Additional compensation; And; Applicable State; Applicable State law; 
Average weekly benefit amount; Base period; Benefit structure; Benefit 
year; Claim filed in any State under the interstate benefit payment 
plan; Compensation and unemployment compensation; Date; Employed; Gross 
average weekly remuneration; Hospitalized for treatment of an emergency 
or life-threatening condition; Individual's capabilities; Jury duty; 
Reasonably short period; Regular compensation; Secretary; State; State 
agency; State law; systematic and sustained effort; Tangible evidence; 
and Week of unemployment. Also, an ``s'' was removed from the word 
``mean'' in the definition of ``Employed,'' and since the paragraph 
designations were removed in order to reorder the definitions 
alphabetically, the phrase ``(n)(2) of this section'' was replaced with 
``(2) of this definition'' in paragraph (1), and the phrase ``(n)(1) of 
this section'' was replaced with ``(1) of this definition'' in 
paragraph (2) in the definition of ``Week of unemployment.''
    Paragraph (a) of Sec.  615.7 in the NPRM was revised in the final 
rule to delete the following language--

    Removing the term ``Extended Benefits'' wherever it appears and 
replacing it with the term ``Extended compensation'' throughout.

This is no longer necessary since a technical correction was made in 
the definition of ``Extended compensation'' in Sec.  615.2 to clarify 
that ``extended benefits'' can be used interchangeably with ``extended 
compensation.''
    Non-substantive deletions were made in paragraph (d) of Sec.  
615.11, which discusses the limitations in an extended

[[Page 57768]]

benefit period. The paragraph was revised to delete from the NPRM 
language which reads--

extended benefit period or high unemployment period may begin in any 
State by reason of a State ``on'' indicator before the 14th week 
after the ending of a prior extended benefit period or high 
unemployment period in such State. Conversely, no extended benefit 
period or high unemployment period may end in any State by reason of 
a State ``off'' indicator before the 14th week after the beginning 
of an extended benefit period or high unemployment period in such 
State. In addition, no . . .

since this criteria is covered in paragraph (c) of the same section.
    Three technical corrections were made in Sec.  615.12. First, ``our 
concurrence'' was replaced with ``the concurrence of the Department'' 
in paragraph (d)(1). Second, in paragraph (d)(2), ``Bureau of Labor 
Statistics'' was spelled out since it is the first use in the rule 
text, and the paragraph was slightly revised to clarify that 
unemployment data released by BLS for each month have an initial 
release and then regular revisions. Third, an identical sentence in 
paragraphs (e)(1)(ii) and (e)(2)(ii) referencing the Tax Relief, 
Unemployment Insurance Reauthorization, and Job Creation Act of 2010, 
Public Law 111-312, was deleted from both paragraphs because it 
describes a temporary provision of law that no longer applies. Several 
non-substantive additions and deletions were made in Sec.  615.13. The 
first was to clarify that paragraphs (a) and (b) were revised by adding 
paragraphs (a)(1), (a)(2), (b)(1), (b)(2), and (b)(3). Second, the 
phrase ``the Department determines'' was added after the word ``which'' 
in paragraph (a)(1). Third, the phrase ``or high unemployment period'' 
was added in paragraphs (a)(1) and (a)(2). Fourth, ``a result of our 
determination'' was replaced with ``determined by the Department to 
be'' in paragraph (a)(1).
    Finally, typographical errors were corrected in Sec. Sec.  615.2, 
615.12, 615.13, 615.14, and 615.15. In Sec.  615.2, a comma was added 
after the word ``published'' in the definition of ``High unemployment 
period,'' and ``is'' was replaced with ``as'' before the word 
``described'' in the definition of ``Trigger Value.'' In Sec.  615.12, 
an ``s'' was added to the word ``State'' in paragraph (e)(2)(i), and 
``However'' was deleted and the ``t'' in the word ``the'' was 
capitalized to begin the sentence in paragraph (f). In paragraph (a)(1) 
of Sec.  615.13, ``the'' was replaced with ``a'' before the word 
``notice''; ``to us'' located after the word ``acceptable'' was 
deleted; ``we'' was replaced with ``the Department''; ``will'' was 
added before the phrase ``publish in the Federal Register''; and the 
word ``publish'' was revised to read ``publishes'' before the phrase 
``that information''. In paragraph (a)(2) of Sec.  615.13, ``our'' was 
replaced with ``of the Department's'' before the word 
``determination''. In Sec.  615.14, the citation to paragraph (a) was 
corrected to paragraph (c), and the citation to paragraph (a)(4) was 
corrected to paragraph (c)(4). In Sec.  615.15, ``we'' was replaced 
with ``the Department,'' and ``require'' was revised to read 
``requires''.
    The final rule, as explained also in the discussion of Paperwork 
Reduction Act requirements below, retains proposed revisions in the 
NPRM to regulatory requirements at Sec.  615.15, pertaining to records 
and reports State agencies must submit. Paragraphs (a) and (b) are 
revised for clarity by deleting unnecessary language regarding the 
Secretary's authority to request Extended Benefit Program reports and 
to appoint audit officials for those reports. Furthermore, the final 
rule deletes paragraphs (c) and (d). In reference to reporting 
guidelines discussed in the Paperwork Reduction Act, the ET Handbook is 
a more effective way to communicate reporting requirements, because 
codifying the reporting requirements in paragraphs (c) and (d) of Sec.  
615.15 prevents the Department from adapting reporting instructions to 
changing conditions or needs. The ET Handbook requires the weekly 
submission of Forms ETA-538 and ETA-539. These forms have been 
computerized and contain information on initial Unemployment Insurance 
claims and continued weeks claimed. These figures are important 
economic indicators. Form ETA-538 provides information allowing release 
of advance unemployment claims information to the public five days 
after the close of the reference period. Form ETA-539 contains more 
detailed weekly claims information and the State's 13-week IUR that is 
used to determine eligibility for the Extended Benefits program. The 
reporting requirements in paragraphs (c) and (d) of the old regulation 
are included in the ET Handbook, and elimination of the requirements in 
regulation allow for ease in making future modifications by simply 
updating the ET Handbook.
    Furthermore, paragraph (d) existed during the implementation phase 
of the IUR indicator and required States to submit the method used to 
identify and select the weeks used for EB trigger purposes to ensure 
that States were consistent and comparable in their methods. With 30 
years of experience, as well as numerous data validation and data 
quality programs in effect, the Department has determined it is 
unnecessary to compel State administrators to provide this information. 
Current reporting guidelines contained in the ET Handbook are clear 
enough that States continue to have clear standards about which claims 
are used for constructing totals used to compute trigger values, thus 
permitting the deletion of this paragraph. The NPRM did not change the 
existing reporting requirements for Forms ETA-538 or ETA-539, and the 
Department received no substantive comments on the NPRM during the 
public comment period.

III. Administrative Information

Executive Orders 12866 and 13563

    Executive Orders (E.O.) 13563 and 12866 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects; distributive impacts; and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility.
    Section 3(f) of E.O. 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule that: (1) Has 
an annual effect on the economy of $100 million or more or adversely 
and materially affects a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local or Tribal governments or communities (also referred to as 
``economically significant''); (2) creates serious inconsistency or 
otherwise interferes with an action taken or planned by another agency; 
(3) materially alters the budgetary impacts of entitlement grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raises novel legal or policy issues arising out of 
legal mandates, the President's priorities, or the principles set forth 
in E.O. 12866. Regarding item (4), any novel legal or policy issues 
raised by this rule do not arise from legal mandates, Presidential 
priorities, or the principles set forth in E.O. 12866.
    For a ``significant regulatory action,'' E.O. 12866 asks agencies 
to describe the need for the regulatory action and explain how the 
regulatory action will meet that need, as well as assess the

[[Page 57769]]

costs and benefits of the regulation.\1\ In the Unemployment 
Compensation Amendments of 1992 (UC Amendments), Congress adopted an 
optional indicator for the existing EB Program that is based on both 
the level of the TUR Trigger Value and the percentage the Trigger Value 
is of Trigger Values in comparable periods in each of the prior years 
(referred to as the look-back).\2\ Although the TUR indicator was 
implemented in the early 1990s, there was never any regulation put in 
place defining its computation and its application. The Department is 
establishing regulations for the TUR indicator which interpret the law 
related to the TUR indicator and clarify the computation of its look-
back provision. As discussed in more detail in the Background section 
above, the Department uses rounding to calculate the TUR because it is 
consistent with the BLS's calculation of unemployment rates. Based on 
the economic impact analysis that follows, the Department believes this 
is not an economically significant regulatory action.
---------------------------------------------------------------------------

    \1\ Executive Order No. 12866, Sec.  6(a)(3)(B).
    \2\ Unemployment Compensation Amendments of 1992, Public Law 
102-318 (1992). This law added Section 203(f) to EUCA to provide for 
an optional alternative indicator that States may use to trigger 
``on'' or ``off'' EB based on the total unemployment rate. EUCA 
originally provided for an ``on'' indicator based only on the IUR. 
EUCA, Sec.  203(d)-(e).
---------------------------------------------------------------------------

    EUCA, as amended by the UC Amendments, requires two conditions be 
met for a TUR-based ``on'' indicator to occur in a State: (1) For the 
most recent 3 months for which data for all States is published, the 3-
month average seasonally adjusted TUR in the State equals or exceeds 
6.5 percent, and (2) that the Trigger Value equals or exceeds 110 
percent of the Trigger Values for either or both of the corresponding 
3-month periods in the 2 preceding calendar years (look-back). The UC 
Amendments also provide for a ``high unemployment period'' when the TUR 
Trigger Value in a State equals or exceeds 8 percent and meets the 110 
percent look-back described above, permitting the payment of additional 
weeks of compensation.\3\ States that want to use the optional TUR 
indicator must have authority under State law which may require States 
to enact legislation that implements the Federal requirements. An EB 
period ends when the State no longer meets any of the ``on'' 
requirements provided for in State law.
---------------------------------------------------------------------------

    \3\ EUCA, Sec.  202(b)(3)(B). Meeting the 6.5 percent TUR 
indicator permits eligible claimants to receive up to an additional 
50 percent of their regular entitlement during an EB period. Meeting 
the 8.0 percent indicator permits eligible claimant to receive up to 
a total of 80 percent of their regular entitlement during a high EB 
period.
---------------------------------------------------------------------------

    Under the original methodology by which the Department determined 
the look-back criterion for the optional TUR indicator, the indicator's 
Trigger Value was divided by the indicator's Trigger Value for the 
comparable period in the preceding year and 2nd preceding year. Digits 
beyond the hundredths place (the second digit to the right of the 
decimal place) in the resultant decimal fractions were truncated and 
the results multiplied by 100 to determine the percent the current 
indicator Trigger Value was of the indicator Trigger Value in the 
comparable periods in the prior years. If the result was greater than 
or equal to 110 for one of the fractions, the look-back criterion was 
met. This approach paralleled the method used for the IUR look-back 
computation established in regulations at 20 CFR 615.12(c)(3); however, 
neither the law nor regulations specify the method for computing the 
TUR indicator look-back.\4\
---------------------------------------------------------------------------

    \4\ EUCA provides that ``determinations of the rate of total 
unemployment in any State for any period . . . shall be made by the 
Secretary.'' EUCA, Sec.  203(f)(3).
---------------------------------------------------------------------------

    The Department is changing the method for computing the TUR look-
back by rounding to the hundredths place, rather than truncating. The 
TUR indicator uses total unemployment rates determined by BLS. These 
rates are measured using sampled data and therefore are imprecise due 
to sampling error. In order to ensure that the TUR indicator is 
measured with more consistency to similar measures, and to the extent 
possible, a more accurate measure, the Department has determined that 
an appropriate methodology for computing the look-back on the TUR 
indicator is to switch from truncation to rounding to the nearest 
hundredth, or second decimal place. In contrast, IUR indicators are 
computed from administrative data and thus represent the full universe. 
Because of these differences in the computation of the insured and 
total unemployment rates, the Department has determined that an 
appropriate methodology for computing the look-back for the TUR 
indicator is to switch from truncation at the second decimal place, to 
rounding to the second decimal place. Rounding, rather than truncating, 
is consistent with BLS practices for TUR data. UIPL No. 16-11, dated 
May 20, 2011, informed the SWAs that the full effect of this new 
rounding procedure was implemented retroactive to April 16, 2011.

Rounding Change in the TUR Look-Back Computation
[GRAPHIC] [TIFF OMITTED] TR24AU16.122

[[Page 57770]]

Where:

Three Mo. SATUR = 3-month average seasonally adjusted total 
unemployment rate.
Three Mo. SATUR (-1) = 3-month average seasonally adjusted total 
unemployment rate for the corresponding period in the prior year 
period.

Potential Impacts

    Changing the look-back computational method will have a marginal 
economic impact because of the new rounding method and no increased 
operational burden because it would result in no change in claimant 
behavior or in procedure from the existing process.\5\ The TUR 
indicator and new rounding method are currently implemented for the 
States to use; however, because the Department is implementing in 
regulations the TUR indicator as well as the new rounding method for 
the TUR look-back, the Department offers estimates of both impacts.
---------------------------------------------------------------------------

    \5\ The process of look-back calculation is done in the Division 
of Fiscal and Actuarial Services, Employment and Training 
Administration of the U.S. Department of Labor, using data from the 
Bureau of Labor Statistics which calculates the trigger values. The 
operational procedure will remain exactly the same as done 
previously by State and Federal staff.
---------------------------------------------------------------------------

    The UI program is a transfer payment program. For the purposes of a 
cost-benefit analysis under E.O.s 13563 and 12866, transfer payments 
are not considered a cost. Therefore, the analysis will be on the 
possible redistribution of wealth that may take place, as opposed to 
any impact on aggregate social welfare.\6\ In this case, the 
redistribution is primarily one that takes place over time rather than 
between groups. More specifically, the UI program is structured to act 
as a counter-cyclical program in terms of its impact on the economy--
during recessions increased benefit payments (much higher than taxes 
paid) provide temporary income support and greater economic stimulus 
which prevents greater economic distress, while during expansions the 
program acts through higher taxes to lower overall employment and 
demand levels. Because a State whose Trigger Value meets or exceeds the 
threshold and whose look-back falls short of meeting the requirement by 
0.05 percentage point or less would trigger ``on'' under the rounding 
computation while under the truncation method would keep the State 
``off,'' the change marginally increases extended compensation as the 
TUR Trigger Value increases in a recession. A change to increase the 
duration of benefits during recessions will ultimately increase the 
counter-cyclical nature of the program by increasing stimulus during 
recessions while slightly decreasing economic activity during 
expansions. Following is an impact analysis which estimates the change 
in the level and timing of the UI benefits paid and taxes collected as 
a result of the change for the look-back provision of the TUR 
indicator.
---------------------------------------------------------------------------

    \6\ See Office of Management and Budget, Circular A-4: 
Regulatory Analysis, p. 46 (Sept. 17, 2003), available at http://www.whitehouse.gov/omb/circulars_default.
---------------------------------------------------------------------------

    The actual future impacts of changing the look-back calculation on 
the flow of UI benefits and taxes are dependent upon the unemployment 
rate in relation to the TUR trigger threshold and the number of States 
that have actually implemented the optional TUR indicator. 
Historically, the proportion of months that the EB Program has been in 
effect was extremely low, due primarily to a relatively high threshold 
in relation to the level of unemployment, unwillingness by States to 
adopt the optional indicators, and Federal emergency benefit programs 
that at times can and have supplanted the EB Program. For example, on 
average for the 1991 and 2001 high unemployment periods, State 
indicators were ``on'' in roughly 3 percent of the State trigger 
months.\7\ In contrast, this past recession's high unemployment period 
(2007-2011) has been quite unique: In over 40 percent of the State 
trigger months, the EB Program has been ``on,'' due primarily to the 
large number of States adopting the optional TUR indicator once the 
Federal Government began paying 100 percent of the costs (see Table 1).
---------------------------------------------------------------------------

    \7\ State trigger months are the number of months during high 
unemployment periods (see notes to Table 1) multiplied by the number 
of States, i.e., 53. During non-recessionary the percentage would be 
even less and close to zero. Extended Benefit Program data is found 
in the DOL ETA-394 annual report. http://www.workforcesecurity.doleta.gov/unemploy/hb394.asp.

                            Table 1--How Often the Extended Benefit Program is ``On''
----------------------------------------------------------------------------------------------------------------
                                                                                   State trigger    Percent of
                    High unemployment periods                      State trigger   months EB was  trigger months
                                                                      months          ``on''       EB was ``on''
----------------------------------------------------------------------------------------------------------------
1991-1994 \1\...................................................           2,226             111             5.0
2001-2004 \2\...................................................           2,438              38             1.4
2007-2011 \3\...................................................           2,392           1,055              44
----------------------------------------------------------------------------------------------------------------
\1\ Period begins in July 1991 and goes to Dec. 1994 to include the post recessionary period of high
  unemployment.
\2\ Period begins in Mar. 2001 and goes to Dec. 2004 to include the post recessionary period of high
  unemployment.
\3\ Period begins in Dec. 2007 and goes to Sept. 2011 to include the post recessionary period of high
  unemployment.

    Only seven States adopted the optional TUR indicator upon its 
introduction in 1993. Then from 1994 through 2008, only four more 
States added the TUR indicator to their State law, bringing the number 
to 11 at the start of 2009 (see Table 2). The number of States 
implementing the optional TUR indicator and how often the EB Program is 
actually activated are critical pieces of information for estimating 
the impacts of the look-back rounding methodology change. In 2009, as 
part of the American Recovery and Reinvestment Act (Recovery Act), the 
Federal government began paying 100 percent of extended compensation 
and high unemployment extended compensation, so the number of States 
that adopted the optional TUR indicator went up to 38 in 2009, then 39 
in 2011.\8\ All of the 28 States that adopted the TUR indicator post-
Recovery Act instituted the TUR indicator on a temporary basis--for as 
long as the Federal government was paying 100 percent of the 
compensation for the EB Program.
---------------------------------------------------------------------------

    \8\ An additional feature of the TUR trigger that should be 
noted is that for claims beginning after December, 2010, Congress 
added a 3rd year to the look-back calculation, so that if for the 
most recent three-month period the TUR equals or exceeds 6.5 percent 
(or 8.0 percent) and the average TUR in the State equals or exceeds 
110 percent of the average TUR for any or all three of the 
corresponding three-month periods in the 3 preceding calendar years, 
then EB will trigger ``on.'' Tax Relief, Unemployment Insurance 
Reauthorization, and Job Creation Act of 2010, Pub. L. 111-312, 
Sec.  502 (Dec. 17, 2010). This feature expired on January 1, 2012, 
and was not included in the impact analysis.

[[Page 57771]]

                                             Table 2--States That Have Adopted the Optional EB TUR Indicator
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Years                  1993-1998         1999-2001           2002            2003-2004        2005-2008        2009-2010           2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
 Total TUR  indicator states           7                 8                 9                10                11               38               39
--------------------------------------------------------------------------------------------------------------------------------------------------------
States.......................  Alaska..........  New Hampshire...  North Carolina..  New Mexico......  New Jersey.....  Alabama........  Maryland.
                               Connecticut.....  ................  ................  ................  Arizona........
                               Kansas..........  ................  ................  ................  California.....
                               Oregon..........  ................  ................  ................  Colorado.......
                               Rhode Island....  ................  ................  ................  Delaware.......
                               Vermont.........  ................  ................  ................  District of
                                                                                                        Columbia.
                               Washington......  ................  ................  ................  Florida........
                                                                                                       Georgia........
                                                                                                       Idaho..........
                                                                                                       Illinois.......
                                                                                                       Indiana........
                                                                                                       Kentucky.......
                                                                                                       Maine..........
                                                                                                       Massachusetts..
                                                                                                       Michigan.......
                                                                                                       Minnesota......
                                                                                                       Missouri.......
                                                                                                       Nevada.........
                                                                                                       New York.......
                                                                                                       Ohio...........
                                                                                                       Pennsylvania...
                                                                                                       South Carolina.
                                                                                                       Tennessee......
                                                                                                       Texas..........
                                                                                                       Virginia.......
                                                                                                       West Virginia..
                                                                                                       Wisconsin......
--------------------------------------------------------------------------------------------------------------------------------------------------------

Impact Assessment Methodology

    ETA used two distinct methodologies, a time-series simulation and a 
Monte Carlo-type simulation analysis (each explained more fully below), 
to provide quantitative impact estimates for the change in the level 
and timing of the UI benefits paid and taxes collected as a result of 
the change in formulation of the TUR indicator. The specific goal of 
these two analyses is to provide a quantitative measure for: (1) The 
increased probability of a State turning ``on'' the EB Program under 
the new rounding rules, and (2) the likely change in the aggregate 
level of UI benefits and taxes with each instance of additional EB 
benefits paid. The results of these measures will allow a determination 
of the economic impact of that occurrence of additional EB benefits 
paid on the overall economy and on any subgroups.
    The time-series simulation estimates are developed using a 
historical simulation methodology: By first applying the existing TUR 
indicator computation, and then applying the new rounding rules to data 
from a specified period of time and measuring the difference in 
outcomes. To examine the impact on outcomes, the data used is from the 
introduction of the optional TUR indicator in 1993 through September 
2011 when this analysis was completed. This period encompasses two 
recessions of varying severity, two complete economic cycles, and a 
large number of States turning ``on'' the EB Program. This period also 
includes the temporary period of 100 percent Federal reimbursement of 
EB benefit payments when a majority of States, 39, adopted the TUR 
indicator.\9\
---------------------------------------------------------------------------

    \9\ The analysis does not include the computation of the 3 year 
look-back or the periods under which any State may have triggered 
``on'' the EB Program by using the 3 year look-back. State data on 
adoption of the TUR trigger can be found on the weekly trigger 
notice at http://www.workforcesecurity.doleta.gov/unemploy/claims_arch.asp.
---------------------------------------------------------------------------

    The baseline case is considered to be the simulated outcomes under 
the current TUR look-back computation for the States that had adopted 
the optional TUR indicator. For each month during this historical 
period (January 1993 through September 2011), the actual seasonally 
adjusted 3-month average TUR \10\ was used as well as the actual look-
back percentages for each State that had adopted the TUR indicator. The 
number of months in EB periods was then estimated for each state.\11\ 
The TUR look-back percentage was then computed using the new rounding 
methodology and the analysis rerun. These computations enabled 
measurement of the differences between the two types of trigger 
formulations in the number months when the EB Program is triggered 
``on,'' and then the amount of extended benefits paid.\12\
---------------------------------------------------------------------------

    \10\ The data for monthly seasonally adjusted State total 
unemployment rates is from Bureau of Labor Statistics LASST01000006 
(http://data.bls.gov/timeseries/LASST01000006). The total amount of 
monthly EB benefits paid is from the Division of Fiscal and 
Actuarial Services in the Employment and Training Administration of 
the Department of Labor report 394 can be found here: http://www.workforcesecurity.doleta.gov/unemploy/hb394.asp.
    \11\ The ``on'' period was computed for each state rather than 
using the actual historical outcome.
    \12\ Under the new rounding of the look-back formulation there 
will only be cases when the look back percentage in either of the 2 
years, will be higher than the original so the EB Program will turn 
``on'' while the original method will have the EB Program as 
``off.''
---------------------------------------------------------------------------

    Probability of Turning ``On'' EB. Using just the States that had 
adopted the TUR indicator, there were 2,271 monthly observations in 
this simulation, of which there were 1,170 instances when a State 
triggered ``on'' the EB Program by using the TUR indicator under the 
current methodology. When the new rounding rules were applied there 
were 1,177 instances--only 7 additional instances when a State would 
have triggered ``on'' EB, an increase of 0.6 percent (see Table 3).

[[Page 57772]]

                    Table 3--Extended Benefit Periods Under the Old and New TUR Indicator \1\
                                                   [1993-2011]
----------------------------------------------------------------------------------------------------------------
                                                                                  # of instances  # of instances
                                                                  Estimated # of    of EB w/TUR     of EB w/TUR
                                                                   instances of    indicator  >=   indicator  >=
                                                                     EB ``on''         6.0%            8.0%
----------------------------------------------------------------------------------------------------------------
Old Method......................................................           1,170             362             808
New Method......................................................           1,177             365             812
----------------------------------------------------------------------------------------------------------------
Source: Periods of EB are estimated using federal law and data from the Bureau of Labor Statistics seasonally
  adjusted Total Unemployment Rate series by State LASST01000006.
\1\ Data consists of measuring only the periods when the EB Program triggered ``on'' based on the TUR indicator
  and included only the States that had adopted the optional TUR indicator. The number of instances refers to
  the number of State months.

    The seven instances included six different States. In four of the 
instances, the State was triggering ``on'' because of the 8.0 percent 
high unemployment period. In none of the instances were there two 
consecutive months in which a State had a different EB triggering 
outcome under the new rounding methodology compared to the truncation 
method. Two of the instances when States triggered ``on'' EB due to the 
rounding calculation occurred following the 1991 recession, one 
occurred following the 2001 recession, and four occurred following the 
2007 recession when 39 States had adopted the optional TUR indicator 
(see Table 4). In six of the seven occurrences, the difference in the 
look-back calculation occurred in the 2nd prior year look-back 
calculation.

                                    Table 4--Periods When EB was Triggered ``on'' Under the New Rounding Formulation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            First year      Second year     First year      Second year
                          State                             EB Trigger      Rounded  3-      look-back       look-back       look-back       look-back
                                                               date         month SATUR      truncated       truncated        rounded         rounded
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alaska..................................................       2/28/1993             8.0           86.02          109.58              86             110
Connecticut.............................................       5/31/1993             6.8           91.89          109.67              92             110
Oregon..................................................      11/30/2003             8.0          106.66          109.58             107             110
Alaska..................................................       1/31/2009             6.8          109.67          109.67             110             110
Alabama.................................................       3/31/2011             9.2           90.19          109.52              90             110
Kansas..................................................       3/31/2011             6.8           94.44          109.67              94             110
Georgia.................................................       4/30/2011            10.0           98.03          109.89              98             110
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The 0.6 percent increase in the EB Program's being ``on'' in this 
simulation represents the percentage likelihood change in the number of 
times that the EB Program would trigger ``on'' due solely to the change 
in formulation of the look-back mechanism for, on average, 13 States 
having the TUR indicator in place. Therefore, the likelihood of a State 
turning ``on'' the EB Program with the new rounding formulation may be 
represented by .05 percent (.6/13).
    The time series estimates used the actual State unemployment rates 
as they occurred from 1993 through September 2011 and include only the 
States which had adopted the optional TUR indicator. To provide further 
support for the estimate of the difference in the number of times the 
EB Program may trigger ``on'' due to rounding in the look-back 
calculation during a recession, an additional analysis was employed 
based on a Monte Carlo-type methodology. The Monte-Carlo methodology 
allows the simulation of thousands of possible State TUR values rather 
than just the historical values used in the time series analysis. 
Thirteen States--the seven original States that adopted the optional 
TUR indicator and six additional randomly selected States--were 
chosen,\13\ and then, using the mean and standard deviation of their 
total unemployment rates during the past four recessions,\14\ one 
thousand TUR periods were created for each State using a random number 
generator with a normal distribution. The number of periods when the EB 
Program would trigger ``on'' by rounding as opposed to truncating was 
computed. Of the 13,000 total State observation periods (each 
representing recessionary periods), the EB Program would have triggered 
``on'' in 4,822 periods using the original method of truncation for the 
look-back computation, while the EB Program would have triggered ``on'' 
in 4,903 periods using the method of rounding, an increase of 81 
additional periods (see Table 5).
---------------------------------------------------------------------------

    \13\ Thirteen States were used as a number of States likely to 
maintain the TUR indicator in the future. The six States were 
randomly selected to insure a representative group from the 
remaining States. The six States randomly chosen were: Colorado; 
Delaware; Illinois; Kentucky; Maine; and Maryland.
    \14\ The mean and standard deviation were taken from actual 
monthly observations over the recession and post-recession periods 
of: 1980-1983; 1991-1993; 2001-2003; and 2008-2011.

                                  Table 5--Difference Between EB Trigger Formulations Under Simulated Recessionary TURs
                                                         [For 1,000 simulations for each State]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            Mean TUR in      Standard
                                                             recession     deviation of   Instances when  Instances when                  % increase due
                        State \1\                           periods (%)      recession     EB ``on'' w/    EB ``on'' w/     Difference      to rounding
                                                                \2\         period \2\      truncating       rounding
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alaska..................................................            8.14            1.21             448             459              11            2.40

[[Page 57773]]

 
Colorado................................................            6.35            1.48             226             229               3            1.31
Connecticut.............................................            6.31            1.59             363             375              12            3.20
Delaware................................................            6.23            1.80             367             371               4            1.62
Illinois................................................            8.22            1.98             499             507               8            1.58
Kansas..................................................            5.32            1.08             119             120               1            0.83
Kentucky................................................            8.04            2.07             510             517               7            1.35
Maine...................................................            6.70            1.48             418             425               7            1.65
Maryland................................................            5.24            1.30             183             185               2            1.08
Oregon..................................................            8.53            2.03             512             521               9            1.73
Rhode Island............................................            8.01            2.08             497             506               9            1.78
Vermont.................................................            5.66            1.21             221             223               2            0.90
Washington..............................................            8.06            1.95             459             465               6            1.29
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Original seven States to adopt the optional TUR indicator are in bold.
\2\ The mean and standard deviation were taken from actual monthly TUR observations over the recession and post-recession periods of: 1980-1983; 1991-
  1993; 2001-2003; 2008-2011.

    Across the States this represents, on average, a 1.7 percent (81/
4822) increase in the likelihood of turning ``on'' the EB Program under 
the new rounding rules (see Table 6). This also represents the 
cumulative difference of the 13 States, meaning that each State in this 
simulation could be considered to have added a 0.13 percent increase of 
an added instance of turning ``on'' the EB Program (1.7/13). This value 
will be used as the per-State increase in the likelihood of turning 
``on'' the EB Program under the new rounding rules in this simulation.

                   Table 6--Monte Carlo-Type Analysis of Difference in EB Trigger Formulation
                             [For 1,000 simulated monthly trigger values per State]
----------------------------------------------------------------------------------------------------------------
                                                  # Instances EB  # Instances EB
                      State                         ``on''  w/      ``On''  w/      Difference     % Difference
                                                    truncating       rounding
----------------------------------------------------------------------------------------------------------------
13 States.......................................           4,822           4,903              81             1.7
Per State Average...............................             371             377               6
----------------------------------------------------------------------------------------------------------------
Source: Computations made by U.S. DOL ETA/OUI/DFAS.

Transfer to EB Recipients: Temporary Income Support (During Recession)

    The revision to the TUR indicator computation methodology will 
result in increased benefits payments during a recession, which provide 
temporary income support and greater economic stimulus than would 
otherwise exist during that economic time period. This increased 
economic stimulus will prevent greater economic distress during a 
recession. This impact is not a true benefit of the rule because, as 
explained above, the TUR indicator formulation would redistribute 
existing transfer payments only over time. That is, a change to 
increase extended benefits during recessions will ultimately increase 
the counter-cyclical nature of the program by increasing stimulus 
during recessions while doing the opposite during expansions.
    Increased Compensation. A value for the amount of additional 
extended compensation and number of people who would receive the 
extended compensation under the rounding rules was estimated using a 
time-series methodology. The estimated total level of extended 
compensation that would have been paid under the look-back computation 
was estimated using a weekly survival rate method. In this methodology, 
for each week that the EB Program is ``on,'' the number of State EB 
claimants is multiplied by the State average weekly benefit amount to 
get the weekly total benefit amount. To arrive at the weekly number of 
EB claimants, a weekly survival rate is applied for each week of EB to 
a beginning number of regular UI program exhaustees.\15\ This was done 
for each week of the EB period (either 13 or 20 weeks) and aggregated 
to get total EB payments for the applicable period, i.e., the period 
during which each State was ``on'' EB. This computation is represented 
in the formula below.
---------------------------------------------------------------------------

    \15\ Survival rate is the probability that a claimant will 
collect Unemployment Compensation from one week to the next. An 
exhaustee is a person collecting Unemployment Compensation who would 
be in their last week of compensation but for the EB Program.
---------------------------------------------------------------------------

Computation of Total Extended Compensation Paid

    Total Wkly Extended Compensation EB Benefits = [Sigma] (Reg. 
Program Wkly Exhaustions \16\ * Wkly Survival Rate \17\) * Avg. Wkly 
Benefit \18\ (Summed over each week of the EB period.)
---------------------------------------------------------------------------

    \16\ ETA-5159 report includes monthly regular program exhaustees 
which were divided by the number of weeks in a month to get weekly 
data.
    \17\ The weekly survival rate is the proportion of individuals 
claiming unemployment compensation in week n that will also claim 
unemployment compensation in week n+1. A weekly survival rate of 
0.97 was used as a constant for each week of extended benefits. This 
level is derived from the Division of Fiscal and Actuarial Services 
State Benefit Forecasting Model.
    \18\ State average weekly benefit is derived from the ETA-5159 
monthly claims report: http://www.workforcesecurity.doleta.gov/unemploy/finance.asp.
---------------------------------------------------------------------------

    Applying this computation to the seven State periods that turned 
``on'' the EB Program under the rounding formulation in the time series 
simulation, it was estimated that in total

[[Page 57774]]

$294 million \19\ more would have been paid out in extended 
compensation, and there would be an increase of 148,000 \20\ new first 
payments in the EB Program. This translates into an estimated 1.2 
percent increase ($294 million/$24,897 million--total extended 
compensation in the simulation) in extended compensation and a 1.5 
percent increase ($148,000/$9.6 million--total EB first pays in the 
simulation) of EB first payments under the rounding rules compared to 
the current methodology (i.e., truncating the look-back computation 
after two decimal places).
---------------------------------------------------------------------------

    \19\ This amount is, of course, dependent on the size of the 
States, but it does represent a reasonable estimate since these are 
the States most likely to have the TUR indicator in the future. 
Also, this amount is considered a high estimate, since 4 of the 
States triggered on to 20 weeks of benefits, and the average is a 
reasonable expected value for the level of per State extended 
benefits. For all of the periods except one (Alaska, 1/2009) during 
the State EB period triggered on by the rounding calculation, there 
was no ``on'' period for the truncation calculation. The Alaska data 
was adjusted for the truncation period.
    \20\ Estimated increase in the number of first payments in the 
seven state periods of triggering on EB found in the Time-series 
analysis.
---------------------------------------------------------------------------

    Again, dividing these results into the per State added percentage 
point increase for each instance of triggering ``on'' the EB Program 
means there would be a 0.17 percent increase in extended compensation 
paid \21\ and a 0.22 percent increase \22\ in first payments.
---------------------------------------------------------------------------

    \21\ Total additional extended compensation from rounding, $294 
million divided by the number of State periods, 7, and then divided 
by the total extended compensation for the entire period, $24,897 
million.
    \22\ The increase in first pays due to rounding, 148,000, 
divided by the number of State periods, 7, and then dividing by the 
total number of EB first pays during the period of 9.6 million.
---------------------------------------------------------------------------

    In terms of how the increased extended compensation paid would be 
distributed among subgroups of EB recipients, attempting to 
disaggregate this level of benefits into numerically small select 
subgroups of claimants such as low-wage workers, or minority claimants, 
would mean working with monetary flows of very little statistical 
consequence. Therefore, the Department has determined that no 
distributional analysis is necessary.

Transfer From State Unemployment Insurance Accounts: Increased Employer 
Taxes (During Expansions)

    The revision to the TUR indicator computation methodology will 
result in increased economic stimulus during recessions. However, a 
significant increase in extended compensation may result in a State UI 
tax increase on employers. An increased UI tax on employers might 
result in dampened overall economic activity as employers postpone 
equipment purchases or hiring. This impact does not represent a true 
cost of the changes made in this rule because it is associated with a 
corresponding transfer of payments to EB recipients during recessions. 
That is, the regulation would result in redistribution of wealth over 
time (based on the counter-cyclical nature of the EB Program), rather 
than have a net social welfare impact.
    UI Taxes. Except for the temporary provisions that are no longer in 
effect, Federal statutes specify that 50 percent of extended 
compensation is paid from the Extended Unemployment Compensation 
Account (EUCA) in the Unemployment Trust Fund (UTF), which is funded 
through the Federal Unemployment Tax Act (FUTA), and 50 percent is paid 
by the liable State from its account in the UTF.
    The Federal monies for extended compensation flow from EUCA, which 
is also used to fund additional Federal emergency benefit programs. 
Historically, the balance of this account has been sufficient to pay 
the level of extended compensation during a recession and would 
therefore be much greater than the estimated amounts that may result 
from the change in the look-back mechanism.\23\ Nevertheless, even if 
EUCA, together with the other Federal accounts in the UTF is depleted, 
the account can obtain advances from the General Fund with no impact on 
the FUTA tax, which means there would be no expected increase in 
Federal taxes from the change in formulation of the TUR indicator.
---------------------------------------------------------------------------

    \23\ Historical balances of the EUCA fund can be found here: 
http://www.treasurydirect.gov/govt/reports/tfmp/tfmp_utf.htm.
---------------------------------------------------------------------------

    On the State side, every State has a tax structure that responds 
with higher taxes when the amount of reserves in its UTF account 
declines.\24\ Thus, a significant increase in paid extended 
compensation may result in a State UI tax increase on employers. 
However, the tax response takes place only with relatively large 
changes in the State trust fund account balance, and differs by State 
depending on the size of the account balance; small changes in a State 
trust fund account balance may actually have no impact in a State's UI 
taxes. To gauge the magnitude of the tax impact from an increase in 
extended compensation paid, a generalized rule of State UI tax 
collections can be applied: For any specified increase in unemployment 
compensation, 100 percent of the increase will be collected in UI taxes 
over a 10-year period.\25\
---------------------------------------------------------------------------

    \24\ For applicable State triggering laws see Comparison of 
State UI Laws: http://www.workforcesecurity.doleta.gov/unemploy/comparison2011.asp.
    \25\ Recoupment rule of UI taxes in response to a compensation 
increase is from an Office of Unemployment Insurance, Division of 
Fiscal and Actuarial Services State Revenue model run over a range 
of scenarios, 12/2011.
---------------------------------------------------------------------------

    Using the estimated increase of extended compensation paid (due to 
the TUR indicator rounding computation) from the time-series 
simulation, $294 million, an estimate was derived for the amount of 
potential State tax increases by assuming the increase in extended 
compensation was divided among the average number of States that 
experienced an increase in extended EB compensation paid over a 10-year 
period. To arrive at an estimate for the expected increase in State 
unemployment compensation taxes due to a change in the rounding rule 
for the look-back feature of the TUR indicator, 50 percent of the total 
extended compensation, $147 million, is assumed to be financed by seven 
States for an average of $21 million per State. The amount is assumed 
to be financed by increased State taxes over a 10-year period for an 
average of $2.1 million per year. This amount represents an estimated 
increase of 0.14 percent \26\ in State unemployment compensation taxes 
for each State that turns ``on'' the EB Program under the new rounding 
rules.
---------------------------------------------------------------------------

    \26\ Derived by taking the average estimated yearly tax increase 
per State, $2.1 million, divided by the estimated amount of 
contributions per State per year, $1.4 billion. This is certainly a 
very rough estimate that depends on the size of the States having 
the optional TUR indicator in the simulation. However, because those 
States would be expected to continue having the indicator, it is 
considered a reasonable level.

[[Page 57775]]

               Table 7--Estimated Increase in State Taxes Collected Under New Rounding Formulation
               [Based on the estimated extended compensation from the Time-Series data, 1993-2011]
----------------------------------------------------------------------------------------------------------------
                                         Est. amt. of
                                        added extended                          Avg. amt.        % Increase in
               Period                  compensation to   Amt. financed per  financed per year   taxes per state
                                         finance \1\     state \2\  (mil.)        (mil.)              \3\
                                            (mil.)
----------------------------------------------------------------------------------------------------------------
1993-2011 data period...............               $147                $21               $2.1               0.14
----------------------------------------------------------------------------------------------------------------
\1\ Fifty percent of total estimated amount of increased extended compensation paid due to rounding from the
  Time-Series Data.
\2\ Derived from 50 percent of the estimated increase in extended compensation payments under the Time Series
  data divided by the number of States that experienced an increase.
\3\ Total extended compensation to be financed divided by the total unemployment compensation contributions over
  the period: http://www.workforcesecurity.doleta.gov/unemploy/hb394.asp.

    In terms of specific distribution of these impacts, disaggregating 
the tax increases into subgroups of employers such as small businesses 
would mean working with monetary flows of very little consequence. 
Therefore, the Department has determined that no distributional 
analysis is necessary.

Non-Quantified Impacts

    OMB Circular No. A-4 requires the identification of any non-
quantifiable benefits and costs that cannot be reasonably measured.\27\ 
One primary non-quantifiable benefit of implementing regulations for 
the TUR indicator and the associated rounding rule, and which is a 
driving factor for its adoption, is that by codifying the TUR indicator 
the Department will explicitly clarify a methodology for computing the 
TUR look-back that regulations previously left unspecified. This final 
rule will remove the potential for future misunderstanding in the 
computation of the optional TUR indicator, as compared to the current 
status quo where the TUR look-back computation method is not specified 
in Department regulations.
---------------------------------------------------------------------------

    \27\ See Office of Management and Budget, Circular A-4: 
Regulatory Analysis, pp. 2-3, 10, 26-27 (Sept. 17, 2003), available 
at http://www.whitehouse.gov/omb/circulars_default.
---------------------------------------------------------------------------

    Regarding the secondary impacts from increased temporary income 
during recessions and increased employer taxes during expansions, the 
Department has determined that the estimates of extended compensation 
and UI tax increases are too small to meaningfully model their impact 
on the macro economy. With a likely impact of increasing the number of 
instances the EB Program triggers ``on'' by two during an average 
recession and nine instances during a severe recession (as computed in 
detail in the scenarios below), these impact numbers are too small to 
model any stimulus impact during a recession or a dampening effect of 
the tax increases during expansions. Not only are the impacts on 
extended compensation and taxes small compared to the U.S. economy 
(e.g., far below the $1 billion limit for use of an economic multiplier 
effect on the level of employment or economic activity \28\), but even 
compared to aggregate unemployment compensation payments and taxes the 
numbers are rather insignificant.
---------------------------------------------------------------------------

    \28\ In OMB Circular A-4 in reference to the size of stimulative 
impacts: ``. . . that rules with annual costs that are less than one 
billion dollars are likely to have a minimal effect on economic 
growth.''
---------------------------------------------------------------------------

Potential Future Stimulative and Distributional Impacts Scenarios

    By increasing the overall level of benefits paid by States during 
recessionary periods, the change in TUR indicator computation 
methodology would aid in the counter-cyclical nature of the 
Unemployment Compensation program by increasing the economic stimulus 
during recessions and possibly dampening overall activity with possible 
higher taxes. The estimates for the increased probability of States 
triggering ``on'' the EB Program, increased benefits, higher first 
payments, and potential changes to UI taxes, can provide estimates for 
the change in flows of the Unemployment Compensation program that this 
proposal may cause under various future recessionary scenarios.
    Scenario 1 (11 States with the optional TUR indicator; typical 
severity 3-year recession and post-recession period).\29\ In a likely 
scenario, assuming a recession and post-recession high unemployment 
period lasting 3 years, with 11 States having the optional TUR 
indicator in place, it would mean 396 possible State months (11 States 
* 36 months) of high enough unemployment for the EB Program to trigger 
``on.'' Using the results from the high unemployment periods in the 
Monte Carlo-type analysis, the Department could expect approximately 
147 periods of the EB Program to be triggered ``on'' in States with the 
optional TUR indicator (37 percent \30\ * 396 State months) using the 
original truncation methodology. With 11 States having the optional TUR 
indicator, the likelihood of turning ``on'' the EB Program under the 
rounding methodology would be 1.4 percent (11 States * 0.13 percent per 
State likelihood), this would increase the number of EB Program periods 
by two instances (1.4 percent * 147 periods). Assuming a recession with 
$2 billion in total extended compensation paid and 1.5 million first 
payments in the EB Program, then with two more instance of the EB 
Program triggering ``on'' the Department would expect an increase in 
extended compensation paid of $7 million (0.34 percent * $2 billion) 
and an increase of 7,000 in the number of first payments (1.5 million * 
0.44 percent). The resulting tax increases spread over a 10-year period 
in one State would then be expected to be approximately $350,000 per 
year (($7 million * 0.5 State cost)/10 years).
---------------------------------------------------------------------------

    \29\ Similar in severity to the 1991 recession.
    \30\ A value similar to the percentage of State months that 
triggered on to EB in the 1991 and 2001 recessions.
---------------------------------------------------------------------------

    Scenario 2 (20 States with optional TUR indicator; more severe 3-
year recession and post-recession period).\31\ In a less likely 
scenario, but one with possibly the highest expected impact, assuming a 
recession and post-recession period lasting 3 years, with 20 States 
having the optional TUR indicator in place--720 State months (20 States 
* 36 months). In a more severe recession the Department could expect 
360 periods of the EB Program to be triggered ``on'' with the optional 
TUR indicator (720 * 50 percent \32\). With 20 States having the 
optional TUR indicator the likelihood of triggering ``on'' the EB 
Program under the new rounding rules would be 2.6 percent (20 States * 
0.13 percent \33\) this would increase the number of periods

[[Page 57776]]

the EB Program would be triggered ``on'' by nine instances (2.6 percent 
* 360 periods). Assuming a recession with $5 billion in total extended 
compensation paid and 3.0 million first payments for the program,\34\ 
with nine more instances of the EB Program triggering ``on,'' the 
Department would expect an increase in extended compensation of $77 
million (0.17 percent \35\ * 9 periods * $5 billion) and an increase of 
59,000 in the number of first payments for the program (3 million * 9 
periods * 0.22 percent). The resulting tax increases spread over a 10-
year period in one State would then be expected to be approximately 
$190,000 per year ($77 million * 0.5 State cost)/20 States)/10 years).
---------------------------------------------------------------------------

    \31\ Similar in severity to the 2007 recession.
    \32\ Assumed likelihood of triggering on EB in a severe 
recession.
    \33\ Calculated likelihood of triggering on EB in the severe 
recession for States with optional TUR trigger under the new 
rounding rules.
    \34\ Calculated from average costs and payments made during 
recessions 1980-2001.
    \35\ Assumed likelihood of triggering on EB in this type of 
recession.
---------------------------------------------------------------------------

Impact of the TUR Option

    The preceding impact analysis focused on changing the computational 
methodology of the TUR look-back provision. Since the Department is not 
considering the removal of the optional TUR indicator, the analysis 
does not measure the impact of the original adoption of the TUR 
indicator in 1992. However, it should be noted that a review of the 
most evident differences caused by the implementation of this option 
shows a rather small impact.
    From 1993 to 2006, for the 11 States that adopted the TUR indicator 
by 2006 (Table 2), EB costs are totaled for each period when one of 
these States triggered on to the EB Program with the TUR option but 
would not have turned on extended compensation under the IUR 
option.\36\ During this 14-year period, there were 28 instances when a 
State triggered on to the EB Program using the TUR option and would not 
have triggered on using the IUR trigger. The total extended 
compensation costs of these instances were approximately $310 million 
and the number of First Payments was 330,000.
---------------------------------------------------------------------------

    \36\ For a state to trigger on extended compensation using the 
IUR, its insured unemployment rate (IUR) for the previous 13 weeks 
is at least 5 percent and is 120 percent of the average of the rates 
for the corresponding 13-week period in each of the 2 previous 
years.

                                          Table 8--States Triggering on to the EB Program Using the TUR Option
                                                        [Without qualifying with the IUR Option]
--------------------------------------------------------------------------------------------------------------------------------------------------------
              1993                       1994                1995                1996                1997                1998                1999
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alaska..........................  Alaska............  Alaska............  Alaska............  Alaska............  Alaska............  Alaska,
Oregon..........................  Oregon............  Rhode Is..........
Rhode Is........................  Rhode Is,.........
Washington......................
--------------------------------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------------------------------
              2000                       2001                2002                2003                2004                2005                2006
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alaska..........................  Alaska............  Alaska............  Alaska............  Alaska............  Alaska.
                                                                          N. Carolina.......  Michigan..........  Michigan..........
                                                                          Oregon............  N. Carolina.......  Oregon............
                                                                                              Oregon............  Washington........
                                                                                              Washington........
--------------------------------------------------------------------------------------------------------------------------------------------------------

    This is a relatively small number of States and amount spent, on 
average approximately $22 million per year, and in no year did the 
amount spent on extended compensation from States that triggered on 
using the TUR option ever exceed $100 million. Indeed, measuring the 
change in cyclical financial flows of the UI program does not seem 
necessary under these aggregates.

Conclusion

    Placing the optional TUR indicator in regulations does not impose 
any additional change in burden, since no change in the operational 
procedure will occur. In addition, it incorporates in regulations the 
computational methodology previously communicated in UIPL No. 16-11 for 
the TUR's look-back.
    Changing the look-back computation does have an impact, although it 
is estimated to be small. For each State that adopted the optional TUR 
indicator, it was found that the new rounding rule would likely add a 
0.13 percentage point increase in the likelihood of a single State 
triggering ``on'' the EB Program during a recession. For each State 
that triggered ``on'' the EB Program, it would likely add a 0.17 
percent increase in the level of extended compensation paid, a 0.22 
percent increase in people receiving extended compensation, and a per 
State increase in unemployment compensation taxes of 0.14 percent per 
year. These numbers indicate a negligible impact on the redistribution 
of the flows (unemployment compensation and taxes) in the Unemployment 
Compensation program. These impacts are so small that any stimulative 
or distributional effects would be considered of little consequence. 
Indeed, the probable economic impact encompasses the likely possibility 
(depending on the future level of the TUR) that there would be no 
measurable impact from a change in the derivation of the TUR indicator 
due to rounding the look-back proportion as opposed to truncating that 
value.

Paperwork Reduction Act

    The purposes of the Paperwork Reduction Act of 1995 (PRA), 44 
U.S.C. 3501 et seq., include minimizing the paperwork burden on 
affected entities. The PRA requires certain actions before an agency 
can adopt or revise a collection of information, including publishing a 
summary of the collection of information and a brief description of the 
need for and proposed use of the information.
    A Federal agency may not conduct or sponsor a collection of 
information unless it is approved by OMB under the PRA, and displays a 
currently valid OMB control number, and the public is not required to 
respond to a collection of information unless it displays a currently 
valid OMB control number. Also, notwithstanding any other provisions of 
law, no person shall be subject to penalty for failing to comply with a 
collection of information if the collection of information does not 
display a currently valid OMB control number (44 U.S.C. 3512).

[[Page 57777]]

    The Department published an NPRM on October 27, 2014, in the 
Federal Register (79 FR 63859). The NPRM proposed to amend 20 CFR 615, 
Extended Benefits, by implementing the TUR indicator, an optional 
calculation methodology for triggering on Extended Benefits, in 
regulations. The NPRM also proposed to revise the regulatory 
requirements at Sec.  615.15, pertaining to records and reports State 
agencies must submit. More specifically, paragraphs (a) and (b) were 
proposed to be revised for clarity by deleting unnecessary language 
regarding the Secretary's authority to request Extended Benefit Program 
reports and to appoint audit officials for those reports. Furthermore, 
for reasons discussed in the Review of the Final Rule, the Department 
proposed to delete paragraphs (c) and (d). The reporting instructions 
for the proper and timely submission of data are provided in ET 
Handbook No. 401, which governs Unemployment Compensation required 
reporting.
    The preamble to the NPRM stated that the Department had determined 
the proposed rule did not contain new information collections. However, 
to ensure transparency and full opportunities for public participation 
under all appropriate authorities, the Department is submitting an 
Information Collection Request (ICR) to the Office of Management and 
Budget (OMB) to revise the PRA approval for the information collections 
to reflect this rulemaking. See 44 U.S.C. 3506(c)(2)(B); 5 CFR 1320.11. 
As part of that process, the Department sought public comments on the 
removal of specific information collection requirements in the NPRM and 
on the general Extended Benefit reporting requirements in Handbook 401 
and Forms ETA 538 and 539 in light of specific areas of interest to 
minimize so-called ``paperwork'' burdens on the public. The Department 
published a notice in the Federal Register on July 7, 2015 (80 FR 
38747) to provide the public a 60-day opportunity to comment on the 
information collections as described in the rule. No comments on the 
ICR were received during the public comment period.
    Concurrent with the publication of this final rule, the Department 
is submitting an ICR to OMB for approval. The Department will publish a 
Federal Register notice upon receipt of OMB's notice of approval.
Overview of the Information Collection
    Agency: DOL-ETA.
    Action: ICR Revision.
    Title of Collection: Weekly Claims and Extended Benefits Data and 
Weekly Initial and Continued Weeks Claimed.
    OMB Control Number: 1205-0028.
    Affected Public: State, Local, and Tribal Governments.
    Total Estimated Number of Respondents: 53.
    Total Estimated Number of Responses: 5,512.
    Total Estimated Annual Time Burden: 3,675 hours.
    Total Estimated Annual Other Costs Burden: $0.

Executive Order 13132

    Section 6 of Executive Order 13132 requires Federal agencies to 
consult with State entities when a regulation or policy may have a 
substantial direct effect on the States or the relationship between the 
National Government and the States, or the distribution of power and 
responsibilities among the various levels of government, within the 
meaning of the Executive Order. Section 3(b) of the Executive Order 
further provides that Federal agencies must implement regulations that 
have a substantial direct effect only if statutory authority permits 
the regulation and it is of national significance.
    This final rule does not have a substantial direct effect on the 
States or the relationship between the National Government and the 
States, or the distribution of power and responsibilities among the 
various levels of Government, within the meaning of the Executive Order 
13132. Any action taken by a State as a result of the final rule would 
be at its own discretion as the rule imposes no requirements.

Unfunded Mandates Reform Act of 1995

    This regulatory action has been reviewed in accordance with the 
Unfunded Mandates Reform Act of 1995 (Reform Act). Under the Reform 
Act, a Federal agency must determine whether a regulation proposes a 
Federal mandate that would result in the increased expenditures by 
State, local, or tribal governments, in the aggregate, or by the 
private sector, of $100 million or more in any single year. The 
Department has determined this final rule does not include any Federal 
mandate that may result in increased expenditure by State, local, and 
Tribal governments in the aggregate of more than $100 million, or 
increased expenditures by the private sector of more than $100 million.
    Accordingly, it is unnecessary for the Department to prepare a 
budgetary impact statement. Further, as noted above in the conclusion 
of the economic impact analysis, the impact is positive for State UTF 
accounts.

Effect on Family Life

    The Department certifies that this final rule has been assessed 
according to section 654 of the Treasury and General Government 
Appropriations Act, enacted as part of the Omnibus Consolidated and 
Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 
Stat. 2681), for its effect on family well-being. It will not adversely 
affect the well-being of the nation's families. Therefore, the 
Department certifies that this final rule does not adversely impact 
family well-being.

Regulatory Flexibility Act/SBREFA

    The Regulatory Flexibility Act (RFA) at 5 U.S.C. 603(a) requires 
agencies to prepare and make available for public comment an initial 
regulatory flexibility analysis which will describe the impact of the 
final rule on small entities. Section 605 of the RFA allows an agency 
to certify a rule, in lieu of preparing an analysis, if the final 
rulemaking is not expected to have a significant economic impact on a 
substantial number of small entities. Furthermore, under the Small 
Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801 
(SBREFA), an agency is required to produce compliance guidance for 
small entities if the rule has a significant economic impact on a 
substantial number of small entities.
    The RFA defines small entities as small business concerns, small 
not-for-profit enterprises, or small governmental jurisdictions. The 
final rule does not regulate small entities. As a result, any indirect 
impact on small entities would be from a tax increase resulting from a 
State triggering ``on'' because of the new computation method for the 
look-back. Therefore, the Department certifies that the final rule will 
not have a significant economic impact on a substantial number of these 
small entities.

Plain Language

    The Department drafted this final rule in plain language.

List of Subjects in 20 CFR Part 615

    Grant programs-labor; Reporting and recordkeeping requirements; 
Unemployment compensation.

    For the reasons discussed in the preamble, ETA amends 20 CFR part 
615 as follows:

[[Page 57778]]

PART 615--EXTENDED BENEFITS IN THE FEDERAL-STATE UNEMPLOYMENT 
COMPENSATION PROGRAM

0
1. The authority citation for part 615 is revised to read as follows:

    Authority: 26 U.S.C. 7805; 26 U.S.C. 1102; Secretary's Order No. 
6-10.

0
2. Revise Sec.  615.1 to read as follows:

Sec.  615.1  Purpose.

    This part implements the ``Federal-State Extended Unemployment 
Compensation Act of 1970'' (EUCA). Under the Federal Unemployment Tax 
Act, 26 U.S.C. 3304(a)(11), an approved State law must provide for the 
payment of extended compensation to eligible individuals who have 
exhausted all rights to regular compensation during specified periods 
of unemployment, as prescribed in EUCA and this part.

Sec. Sec.  615.3, 615.4, 615.7, 616.8, 615.9, 615.12, and 615.14   
[Amended]

0
3. In part 615 remove the words ``the Act'' and add in their place the 
acronym ``EUCA'' in the following places:
0
a. Section 615.3 (four places);
0
b. Section 615.4(a) and (b) introductory text;
0
c. Section 615.8(a) introductory text;
0
d. Section 615.8(c) introductory text;
0
e. Section 615.8(c)(2);
0
f. Section 615.8(d) introductory text;
0
g. Section 615.8(d)(3) (two places);
0
h. Section 615.8(d)(4);
0
i. Section 615.8(e) introductory text;
0
j. Section 615.8(e)(8);
0
k. Section 615.8(f)(1) introductory text;
0
l. Section 615.8(f)(1)(ii);
0
m. Section 615.8(f)(4);
0
n. Section 615.8(g)(1) and (5);
0
o. Section 615.9(d);
0
p. Section 615.14(a)(1) through (4);
0
q. Section 615.14(b) introductory text;
0
r. Section 615.14(c)(1);
0
s. Section 615.14(c)(2) (two places);
0
t. Section 615.14(c)(3) introductory text;
0
u. Section 615.14(c)(5) and (6);
0
v. Section 615.14(c)(7)(i) through (iii);
0
w. Section 615.14(d)(1);
0
x. Section 615.14(d)(2) (two places);
0
y. Section 615.14(d)(3)(four places);
0
z. Section 615.14(d)(6); and

0
4. Revise Sec.  615.2 to read as follows:

Sec.  615.2  Definitions.

    For the purposes of the EUCA and this part--
    Additional compensation means compensation totally financed by a 
State and payable under a State 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.
    And, as used in section 202(a)(3)(D)(ii), shall be interpreted to 
mean ``or''.
    Applicable benefit year means, with respect to an individual, the 
current benefit year if, at the time an initial claim for extended 
compensation 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. 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 extended compensation 
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. The 
individual's most recent benefit year which expires in an extended 
benefit period, when either extended compensation or high unemployment 
extended compensation is payable, is the applicable benefit year if the 
individual cannot establish a second benefit year or is precluded from 
receiving regular compensation in a second benefit year solely by 
reason of a State law provision which meets the requirement of section 
3304(a)(7) of the Internal Revenue Code of 1986 (26 U.S.C. 3304(a)(7)).
    Applicable State means, with respect to an individual, the State 
with respect to which the individual is an ``exhaustee'' as defined in 
Sec.  615.5, and in the case of a combined wage claim for regular 
compensation, the term means the ``paying State'' as defined in Sec.  
616.6(e) of this chapter.
    Applicable State law means the law of the State which is the 
applicable State for an individual.
    Average weekly benefit amount, for the purposes of section 
202(a)(3)(D)(i), means the weekly benefit amount (including dependents' 
allowances payable for a week of total unemployment and before any 
reduction because of earnings, pensions or other requirements) 
applicable to the week in which the individual failed to take an action 
which results in a disqualification as required by section 202(a)(3)(B) 
of the EUCA.
    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.
    Benefit structure as used in section 204(a)(2)(D), for the 
requirement to round down to the ``nearest lower full dollar amount'' 
for Federal reimbursement of sharable regular and sharable extended 
compensation means all of the following:
    (1) Amounts of regular weekly benefit payments,
    (2) Amounts of additional and extended weekly benefit payments,
    (3) The State maximum or minimum weekly benefit,
    (4) Partial and part-total benefit payments,
    (5) Amounts payable after deduction for pensions, and
    (6) Amounts payable after any other deduction required by State 
law.
    Benefit year means, with respect to an individual, the benefit year 
as defined in the applicable State law.
    Claim filed in any State under the interstate benefit payment plan, 
as used in section 202(c), means:
    (1) Any interstate claim for a week of unemployment filed pursuant 
to the Interstate Benefit Payment Plan, but does not include--
    (i) A claim filed in Canada,
    (ii) A visiting claim filed by an individual who has received 
permission from his/her regular reporting office to report temporarily 
to a local office in another State and who has been furnished 
intrastate claim forms on which to file claims, or
    (iii) A transient claim filed by an individual who is moving from 
place to place searching for work, or an intrastate claim for Extended 
Benefits filed by an individual who does not reside in a State that is 
in an Extended Benefit Period,
    (2) The first 2 weeks, as used in section 202(c), means the first 2 
weeks for which the individual files compensable claims for Extended 
Benefits under the Interstate Benefit Payment Plan in an agent State in 
which an Extended Benefit Period is not in effect during such weeks.
    Compensation and unemployment compensation means cash benefits 
(including dependents' allowances) payable to individuals with respect 
to their unemployment, and includes regular compensation, additional 
compensation and extended compensation as defined in this section.
    Date of a disqualification, as used in section 202(a)(4), means the 
date the disqualification begins, as determined under the applicable 
State law.
    Department means the United States Department of Labor, and shall 
include the Employment and Training Administration, the agency of the 
United States Department of Labor headed by the Assistant Secretary of 
Labor for Employment and Training to whom has been delegated the

[[Page 57779]]

Secretary's authority under the EUCA in Secretary's Order No. 6-2010 
(75 FR 66268) or any subsequent order.
    Eligibility period means, for an individual, the period consisting 
of--
    (1) The weeks in the individual's applicable benefit year which 
begin in an extended benefit period or high unemployment period, or for 
a single benefit year, the weeks in the benefit year which begin in 
more than one extended benefit period or high unemployment period, and
    (2) If the applicable benefit year ends within an extended benefit 
period or high unemployment period, any weeks thereafter which begin in 
such extended benefit period or high unemployment period,
    (3) An individual may not have more than one eligibility period for 
any one exhaustion of regular benefits, or carry over from one 
eligibility period to another any entitlement to extended compensation.
    Employed, for the purposes of section 202(a)(3)(B)(ii) of the EUCA, 
and employment, for the purposes of section 202(a)(4) of the EUCA, mean 
service performed in an employer-employee relationship as defined in 
the State law; and that law also shall govern whether that service must 
be covered by it, must consist of consecutive weeks, and must consist 
of more weeks of work than are required under section 202(a)(3)(B) of 
the EUCA.
    EUCA means the Federal-State Extended Unemployment Compensation Act 
of 1970, title II of Public Law 91-373, 84 Stat. 695, 708 (codified in 
note to 26 U.S.C. 3304), as amended.
    Extended benefit period means the weeks during which extended 
compensation is payable in a State in accordance with Sec.  615.11.
    Extended Benefits Program or EB Program means the entire program 
under which monetary payments are made to workers who have exhausted 
their regular compensation during periods of high unemployment.
    Extended compensation or extended benefits means the funds payable 
to an individual for weeks of unemployment which begin in a regular EB 
period or high unemployment period (HUP), under those provisions of a 
State law which satisfy the requirements of EUCA and this part with 
respect to the payment of extended unemployment compensation, and, when 
so payable, includes compensation payable under 5 U.S.C. chapter 85, 
but does not include regular compensation or additional compensation.
    Extended compensation account is the account established for each 
individual claimant for the payment of regular extended compensation or 
high unemployment extended compensation.
    Extended unemployment compensation means:
    (1) Regular extended compensation paid to an eligible individual 
under those provisions of a State law which are consistent with EUCA 
and this part, and that does not exceed the smallest of the following:
    (i) 50 percent of the total amount of regular compensation payable 
to the individual during the applicable benefit year; or
    (ii) 13 times the individual's weekly amount of extended 
compensation payable for a week of total unemployment, as determined 
under Sec.  615.6(a); or
    (iii) 39 times the individual's weekly benefit amount, referred to 
in paragraph (1)(ii) of this definition, reduced by the regular 
compensation paid (or deemed paid) to the individual during the 
applicable benefit year; or
    (2) High unemployment extended compensation paid to an eligible 
individual under an optional TUR indicator enacted under State law when 
the State is in a high unemployment period, in accordance with Sec.  
615.11(e) of this part, and that does not exceed the smallest of the 
following:
    (i) 80 percent of the total amount of regular compensation payable 
to the individual during the applicable benefit year; or
    (ii) 20 times the individual's weekly amount of extended 
compensation payable for a week of total unemployment, as determined 
under Sec.  615.6(a); or
    (iii) 46 times the individual's weekly benefit amount, referred to 
in paragraph (1)(ii) of this definition, reduced by the regular 
compensation paid (or deemed paid) to the individual during the 
applicable benefit year.
    Gross average weekly remuneration, for the purposes of section 
202(a)(3)(D)(i), means the remuneration offered for a week of work 
before any deductions for taxes or other purposes and, in case the 
offered pay may vary from week to week, it shall be determined on the 
basis of recent experience of workers performing work similar to the 
offered work for the employer who offered the work.
    High unemployment extended compensation means the benefits payable 
to an individual for weeks of unemployment which begin in a high 
unemployment period, under those provisions of a State law which 
satisfy the requirements of EUCA and this part for the payment of high 
unemployment extended compensation. When so payable, high unemployment 
extended compensation includes compensation payable under 5 U.S.C. 
chapter 85, but does not include regular compensation or additional 
compensation. Regular extended unemployment compensation, along with 
high unemployment extended compensation, are part of the program 
referred to in this part as Extended Benefits.
    High unemployment period (or HUP) means a period where the 
Department determines that the Trigger Value in a State, which has 
enacted the alternative Total Unemployment Rate indicator in law, for 
the most recent 3 months for which data for all States is published, 
equals or exceeds 8 percent and such Trigger Value equals or exceeds 
110 percent of such Trigger Value for either or both of the 
corresponding 3-month periods ending in the 2 preceding calendar years.
    Hospitalized for treatment of an emergency or life-threatening 
condition, as used in section 202(a)(3)(A)(ii), has the following 
meaning: ``Hospitalized for treatment'' means an individual was 
admitted to a hospital as an inpatient for medical treatment. Treatment 
is for an ``emergency or life threatening condition'' if determined to 
be such by the hospital officials or attending physician that provide 
the treatment for a medical condition existing upon or arising after 
hospitalization. For purposes of this definition, the term ``medical 
treatment'' refers to the application of any remedies which have the 
objective of effecting a cure of the emergency or life-threatening 
condition. Once an ``emergency condition'' or a ``life-threatening 
condition'' has been determined to exist by the hospital officials or 
attending physician, the status of the individual as so determined 
shall remain unchanged until release from the hospital.
    Individual's capabilities, for the purposes of section 
202(a)(3)(C), means work which the individual has the physical and 
mental capacity to perform and which meets the minimum requirements of 
section 202(a)(3)(D).
    Insured Unemployment Rate means the percentage derived by dividing 
the average weekly number of individuals filing claims for regular 
compensation in a State for weeks of unemployment in the most recent 
13-consecutive-week period as determined by the State on the basis of 
State reports to the United States Secretary of Labor by the average 
monthly employment covered under State law for the first 4 of the most 
recent 6 completed calendar quarters before the end of such 13-week 
period.
    Jury duty, for purposes of section 202(a)(3)(A)(ii), means the 
performance of service as a juror, during all periods

[[Page 57780]]

of time an individual is engaged in such service, in any court of a 
State or the United States pursuant to the law of the State or the 
United States and the rules of the court in which the individual is 
engaged in the performance of such service.
    Provisions of the applicable State law, as used in section 
202(a)(3)(D)(iii) of EUCA, means that State law provisions must not be 
inconsistent with sections 202(a)(3)(C) and 202(a)(3)(E). Therefore, 
decisions based on State law provisions must not require an individual 
to take a job which requires traveling an unreasonable distance to 
work, or which involves an unreasonable risk to the individual's 
health, safety or morals. Such State law provisions must also include 
labor standards and training provisions required under sections 
3304(a)(5) and 3304(a)(8) of the Internal Revenue Code of 1986 and 
section 236(d) of the Trade Act of 1974.
    Reasonably short period, for the purposes of section 202(a)(3)(C), 
means the number of weeks provided by the applicable State law.
    Regular compensation means compensation payable to an individual 
under a 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.
    Regular extended compensation means the benefits 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 EUCA and this part for the payment of extended 
unemployment compensation, and, when so payable, includes compensation 
payable under 5 U.S.C. chapter 85, but does not include regular 
compensation or additional compensation. Regular extended compensation, 
along with high unemployment extended compensation, are part of the 
program referred to in this part as Extended Benefits.
    Regular EB period means a period in which a state is ``on'' the EB 
Program because either the mandatory or optional IUR indicator 
satisfies the criteria to be ``on'' and the state is not in a 13-week 
mandatory ``off'' period; or the State is ``on'' the EB Program because 
the TUR indicator's Trigger Value is at least 6.5 percent and it is at 
least 110 percent of the Trigger Value for the comparable 3 months in 
either of the prior 2 years.
    Secretary means the Secretary of Labor of the United States.
    Sharable compensation means:
    (1) Extended compensation paid to an eligible individual under 
those provisions of a State law which are consistent with EUCA and this 
part, and that does not exceed the smallest of the following:
    (i) 50 percent of the total amount of regular compensation payable 
to the individual during the applicable benefit year; or
    (ii) 13 times the individual's weekly amount of extended 
compensation payable for a week of total unemployment, as determined 
under Sec.  615.6(a); or
    (iii) 39 times the individual's weekly benefit amount, referred to 
in paragraph (1)(ii) of this definition, reduced by the regular 
compensation paid (or deemed paid) to the individual during the 
applicable benefit year.
    (2) Extended compensation paid to an eligible individual under an 
optional TUR indicator enacted under State law when the State is in a 
high unemployment period, in accordance with Sec.  615.12(f) of this 
part, and that does not exceed the smallest of the following:
    (i) 80 percent of the total amount of regular compensation payable 
to the individual during the applicable benefit year; or
    (ii) 20 times the individual's weekly amount of extended 
compensation payable for a week of total unemployment, as determined 
under Sec.  615.6(a); or
    (iii) 46 times the individual's weekly benefit amount, referred to 
in paragraph (1)(ii) of this definition, reduced by the regular 
compensation paid (or deemed paid) to the individual during the 
applicable benefit year.
    (3) Regular compensation paid to an eligible individual for weeks 
of unemployment in the individual's eligibility period, but only to the 
extent that the sum of such compensation, plus the regular compensation 
paid (or deemed paid) to the individual for prior weeks of unemployment 
in the applicable benefit year, exceeds 26 times and does not exceed 39 
times the average weekly benefit amount (including allowances for 
dependents) for weeks of total unemployment payable to the individual 
under the State law in such benefit year: Provided, that such regular 
compensation is paid under provisions of a State law which are 
consistent with EUCA and this part.
    (4) Notwithstanding the preceding provisions of this paragraph, 
sharable compensation does not include any regular or extended 
compensation for which a State is not entitled to a payment under 
section 202(a)(6) or 204 of EUCA or Sec.  615.14 of this part.
    State means the States of the United States, the District of 
Columbia, the Commonwealth of Puerto Rico, and the U. S. Virgin 
Islands.
    State agency means the State unemployment compensation agency of a 
State which administers the State law.
    State law means the unemployment compensation law of a State, 
approved by the Secretary under section 3304(a) of the Internal Revenue 
Code of 1986 (26 U.S.C. 3304(a)).
    A systematic and sustained effort, for the purposes of section 
202(a)(3)(E), means--
    (i) A high level of job search activity throughout the given week, 
compatible with the number of employers and employment opportunities in 
the labor market reasonably applicable to the individual,
    (ii) A plan of search for work involving independent efforts on the 
part of each individual which results in contacts with persons who have 
the authority to hire or which follows whatever hiring procedure is 
required by a prospective employer in addition to any search offered by 
organized public and private agencies such as the State employment 
service or union or private placement offices or hiring halls,
    (iii) Actions by the individual comparable to those actions by 
which jobs are being found by people in the community and labor market, 
but not restricted to a single manner of search for work such as 
registering with and reporting to the State employment service and 
union or private placement offices or hiring halls, in the same manner 
that such work is found by people in the community,
    (iv) A search not limited to classes of work or rates of pay to 
which the individual is accustomed or which represent the individual's 
higher skills, and which includes all types of work within the 
individual's physical and mental capabilities, except that the 
individual, while classified by the State agency as provided in Sec.  
615.8(d) as having ``good'' job prospects, shall search for work that 
is suitable work under State law provisions which apply to claimants 
for regular compensation (which is not sharable),
    (v) A search by every claimant, without exception for individuals 
or classes of individuals other than those in approved training, as 
required under section 3304(a)(8) of the Internal Revenue Code of 1986 
or section 236(e) of the Trade Act of 1974,
    (vi) A search suspended only when severe weather conditions or 
other calamity forces suspension of such activities by most members of 
the community, except that

[[Page 57781]]

    (vii) The individual, while classified by the State agency as 
provided in Sec.  615.8(d) as having ``good'' job prospects, if such 
individual normally obtains customary work through a hiring hall, shall 
search for work that is suitable work under State law provisions which 
apply to claimants for regular compensation (which is not sharable).
    Tangible evidence of an active search for work, for the purposes of 
section 202(a)(3)(E), means a written record which can be verified, and 
which includes the actions taken, methods of applying for work, types 
of work sought, dates and places where work was sought, the name of the 
employer or person who was contacted and the outcome of the contact.
    Total Unemployment Rate means the number of unemployed individuals 
in a State (seasonally adjusted) divided by the civilian labor force 
(seasonally adjusted) in the State for the same period.
    Trigger Value or average rate of total unemployment means the ratio 
computed using 3 months of the level of seasonally adjusted 
unemployment in a State in the numerator and 3 months of the level of 
the seasonally adjusted civilian labor force in the State in the 
denominator. This rate is used for triggering States ``on'' and ``off'' 
the optional Total Unemployment Rate indicator as described in Sec.  
615.12(e).
    Week means:
    (1) For purposes of eligibility for and payment of extended 
compensation, a week as defined in the applicable State law.
    (2) For purposes of computation of extended compensation ``on'' and 
``off'' and ``no change'' indicators and insured unemployment rates and 
the beginning and ending of an EB Period or a HUP, a calendar week.
    Week of unemployment means:
    (1) A week of total, part-total, or partial unemployment as defined 
in the applicable State law, which shall be applied in the same manner 
and to the same extent to the Extended Benefit Program as if the 
individual filing a claim for Extended Benefits were filing a claim for 
regular compensation, except as provided in paragraph (2) of this 
definition.
    (2) Week of unemployment in section 202(a)(3)(A) of the EUCA means 
a week of unemployment, as defined in paragraph (1) of this definition, 
for which the individual claims Extended Benefits or sharable regular 
benefits.

0
5. Amend Sec.  615.3 by revising the third sentence to read as follows:

Sec.  615.3  Effective period of the program.

    * * * Conformity with EUCA and this part in the payment of regular 
compensation, regular extended compensation, and high unemployment 
extended compensation (if State law so provides) to any individual is a 
continuing requirement, applicable to every week as a condition of a 
State's entitlement to payment for any compensation as provided in EUCA 
and this part.

0
6. Amend Sec.  615.7 by adding paragraph (b)(3) and revising paragraph 
(d) introductory text to read as follows:

Sec.  615.7  Extended Benefits; maximum amount.

* * * * *
    (b) * * *
    (3) If State law provides, in accordance with Sec.  615.12(e), for 
a high unemployment period for weeks of unemployment beginning after 
March 6, 1993, the provisions of paragraph (b)(1) of this section are 
applied by substituting:
    (i) 80 percent for 50 percent in (b)(1)(i),
    (ii) 20 for 13 in (b)(1)(ii), and
    (iii) 46 for 39 in (b)(1)(iii).

    Note to paragraph (b)(3). Provided, that if an individual's 
extended compensation account is determined in accordance with the 
provisions of paragraphs (b)(3)(i) through (b)(3)(iii) (for a ``high 
unemployment period'' as defined in Sec.  615.2) during the 
individual's eligibility period, upon termination of the high 
unemployment period, such individual's account must be reduced by 
the amount in the account that is more than the maximum amount of 
extended compensation or high extended compensation payable to the 
individual. Provided further, if the account balance is equal to or 
less than the maximum amount of extended compensation or high 
unemployment extended compensation payable, there will be no 
reduction in the account balance upon termination of a high 
unemployment period. In no case will the individual receive more 
regular extended compensation or high unemployment extended 
compensation than the amount determined in accordance with 
paragraphs (b)(1)(i) through (iii) of this section, nor more 
extended compensation or high unemployment extended compensation 
than as provided in paragraphs (b)(2)(i) through (iii) of this 
section.

* * * * *
    (d) Reduction because of trade readjustment allowances. Section 
233(c) of the Trade Act of 1974 (and section 204(a)(2)(C) of EUCA), 
requiring a reduction of extended compensation because of the receipt 
of trade readjustment allowances, must be applied as follows:
* * * * *

0
7. Amend Sec.  615.8 by revising paragraphs (e)(5)(iii), (f)(2)(i) and 
(iii), and (h)(3) and (4) to read as follows:

Sec.  615.8   Provisions of State law applicable to claims.

* * * * *
    (e) * * *
    (5) * * *
    (iii) The work pays less than the higher of the minimum wage set in 
section 6(a)(1) of the Fair Labor Standards Act of 1938, or any 
applicable State or local minimum wage, without regard to any exemption 
elsewhere in those laws, or
* * * * *
    (f) * * *
    (2) * * *
    (i) The gross average weekly remuneration for the work for any week 
does not exceed the sum of the individual's weekly benefit amount plus 
any supplemental unemployment compensation benefits (as defined in 
section 501(c)(17)(D) of the Internal Revenue Code of 1986) payable to 
the individual,
* * * * *
    (iii) The work pays less than the higher of the minimum wage set in 
section 6(a)(1) of the Fair Labor Standards Act of 1938, or any 
applicable State or local minimum wage, without regard to any exemption 
elsewhere in those laws, or
* * * * *
    (h) * * *
    (3) What kind of jobs he/she must be actively engaged in seeking 
each week depending on the classification of his/her job prospects, and 
what tangible evidence of such search must be furnished to the State 
agency with each claim for benefits. In addition, the State must inform 
the claimant that he/she is required to apply for and accept suitable 
work, and
    (4) The resulting disqualification if he/she fails to apply for 
work to which referred, or fails to accept work offered, or fails to 
actively engage in seeking work or to furnish tangible evidence of such 
search for each week for which extended compensation or sharable 
regular benefits is claimed, beginning with the week following the week 
in which such information shall be furnished in writing to the 
individual.

0
8. Revise Sec.  615.11 to read as follows:

Sec.  615.11  Extended Benefit Periods.

    (a) Beginning date. Except as provided in paragraph (d) of this 
section, an extended benefit period or high unemployment period begins 
in a State on the first day of the third calendar week after a week for 
which there is a

[[Page 57782]]

State ``on'' indicator in that State under either Sec.  615.12(a) or 
(b).
    (b) Ending date. Except as provided in paragraphs (c) and (e) of 
this section, an extended benefit period or high unemployment period in 
a State ends on the last day of the third week after the first week for 
which there is a State ``off'' indicator in that State, unless another 
indicator is in ``on'' status.
    (c) Duration. When an extended benefit period and/or high 
unemployment period becomes effective in any State, or triggers 
``off,'' the attained status must continue in effect for not less than 
13 consecutive weeks.
    (d) Limitation. No extended benefit period or high unemployment 
period may begin or end in any State before the most recent week for 
which data used to trigger the State ``on'' or ``off'' or ``no change'' 
indicator has been published.
    (e) Specific applications of the 13-week rule. (1) If a State 
concludes a 13-week mandatory ``on'' period by virtue of the IUR 
indicator which, at the end of the 13-week period no longer satisfies 
the requirements for a State to be ``on,'' the extended benefit period 
continues if the TUR indicator is ``on'' during the 11th week of the 
13-week mandatory ``on'' period.
    (2) If a State concludes a 13-week mandatory ``on'' period by 
virtue of the TUR indicator which, at the end of the 13-week period no 
longer satisfies the requirements for a State to be ``on,'' the 
extended benefit period continues if the IUR indicator is ``on'' during 
the 11th week of the 13-week mandatory ``on'' period.
    (f) Determining if a State remains ``off'' as a result of a total 
unemployment rate indicator after the 13-week mandatory ``off'' period 
ends. (1) The State remains ``off'' if there is not an IUR ``on'' 
indicator the 11th week of the 13-week mandatory ``off'' period, and 
there is a TUR ``off'' indicator for the third week before the last 
week of the 13-week mandatory ``off'' period.

0
9. Amend Sec.  615.12 by:
0
a. Revising paragraphs (d)(1) and (2);
0
b. Adding paragraph (d)(3);
0
c. Redesignating paragraph (e) as paragraph (f) and revising it; and
0
d. Adding new paragraph (e).
    The additions and revisions read as follows:

Sec.  615.12  Determination of ``on'' and ``off'' indicators.

* * * * *
    (d) * * *
    (1) Any determination by the head of a State agency of an ``on'' or 
``off'' or ``no change'' IUR indicator may not be corrected more than 
three weeks after the close of the week to which it applies. If any 
figure used in the computation of a rate of insured unemployment is 
later found to be wrong, the correct figure must be used to redetermine 
the rate of insured unemployment and the 120 percent factor for that 
week and all later weeks, but no determination of previous ``on'' or 
``off'' or ``no change'' indicator shall be affected unless the 
redetermination is made within the time the indicator may be corrected 
under the first sentence of this paragraph (d)(1). Any change is 
subject to the concurrence of the Department as provided in paragraph 
(e) of this section.
    (2) The initial release of the TUR by the Bureau of Labor 
Statistics (BLS) is subject to revision. However, once a State's TUR 
indicator is determined using the initial release of the TUR data, it 
is not subject to revision even if the BLS TUR for that period of time 
is revised.
    (3) The ``on'' period under a State's optional IUR or TUR indicator 
may not begin before the later of the date of the State's adoption of 
the optional insured unemployment rate or total unemployment rate 
indicator, or the effective date of that enactment. The ``off'' period 
under a State's optional insured unemployment rate or total 
unemployment rate indicator may not occur until after the effective 
date of the repeal of the optional insured unemployment rate or total 
unemployment rate indicator from State law.
    (e) Other optional indicators. (1) A State may, as an option, in 
addition to the State indicators in paragraphs (a) and (b) of this 
section, provide by its law that there is a State ``on'' or ``off'' 
indicator in the State for a week if we determine that--
    (i) The Trigger Value in such State computed using the most recent 
3 months for which data for all States are published before the close 
of such week equals or exceeds 6.5 percent; and
    (ii) The Trigger Value computed using data from the 3-month period 
referred to in paragraph (e)(1)(i) of this section equals or exceeds 
110 percent of the Trigger Value for either (or both) of the 
corresponding 3-month periods ending in the 2 preceding calendar years. 
This ``look-back'' is computed by dividing the Trigger Value by the 
same measure for the corresponding 3 months in each of the applicable 
prior years, and the resulting decimal fraction is rounded to the 
hundredths place, multiplied by 100 and reported as an integer and 
compared to the statutory threshold to help determine the State's EB 
Program status; and
    (iii) There is a State ``off'' indicator for a week if either the 
requirements of paragraph (e)(1)(i) or (ii) of this section are not 
satisfied.
    (2) Where a State adopts the optional indicator under paragraph 
(e)(1) of this section, there is a State ``on'' indicator for a high 
unemployment period (as defined in Sec.  615.2) under State law if--
    (i) The Trigger Value in the State computed using the most recent 3 
months for which data for all States are published before the close of 
such week equals or exceeds 8.0 percent, and
    (ii) The Trigger Value in the State computed using data from the 3-
month period referred to in paragraph (e)(2)(i) of this section equals 
or exceeds 110 percent of the Trigger Value for either (or both) of the 
corresponding 3-month periods ending in the 2 preceding calendar years. 
This ``look-back'' is computed by dividing the Trigger Value by the 
same measure for the corresponding 3 months in each of the applicable 
prior years, and the resulting decimal fraction is rounded to the 
hundredths place, multiplied by 100 and reported as an integer and 
compared to the statutory threshold to help determine the State's EB 
Program status; and
    (iii) There is a State ``off'' indicator for high unemployment 
period for a week if either the requirements of paragraph (e)(2)(i) or 
(ii) of this section are not satisfied.
    (3) Method of computing the average rate of total unemployment. The 
average rate of total unemployment is computed by dividing the average 
of 3 months of the level of seasonally adjusted unemployment in the 
State by the average of 3 months of the level of seasonally adjusted 
unemployment and employment in the State. The resulting rate is 
multiplied by 100 to convert it to a percentage basis and then rounded 
to the tenths place (the first digit to the right of the decimal 
place).
    (4) Method of computing the State ''look-back.'' The average rate 
of total unemployment, ending with a given month, is divided by the 
same measure for the corresponding 3 months in each of the applicable 
prior years. The resultant decimal fraction is then rounded to the 
hundredths place (the second digit to the right of the decimal place). 
The resulting number is then multiplied by 100 and reported as an 
integer (no decimal places) and compared to the statutory threshold to 
help determine the State's EB Program status.
    (f) Notice to Secretary. Within 10 calendar days after the end of 
any week for which the head of a State agency has determined that there 
is an ``on,'' or

[[Page 57783]]

``off,'' or ``no change'' IUR indicator in the State, the head of the 
State agency must notify the Secretary of the determination. The notice 
must state clearly the State agency head's determination of the 
specific week for which there is a State ``on'' or ``off'' or ``no 
change'' indicator. The notice must include also the State agency 
head's findings supporting the determination, with a certification that 
the findings are made in accordance with the requirements of Sec.  
615.15. The Secretary may provide additional instructions for the 
contents of the notice to assure the correctness and verification of 
notices given under this paragraph. The Secretary will accept 
determinations and findings made in accordance with the provisions of 
this paragraph and of any instructions issued under this paragraph. A 
notice does not become final for purposes of EUCA and this part until 
the Secretary accepts the notice.

0
10. Revise Sec.  615.13 to read as follows:

Sec.  615.13  Announcement of the Beginning and Ending of Extended 
Benefit Periods or High Unemployment Periods.

    (a) State indicators--(1) Extended benefit period. Upon receipt of 
a notice required by Sec.  615.12(f) which the Department determines is 
acceptable, the Department will publish in the Federal Register a 
notice of the State agency head's determination that there is an ``on'' 
or an ``off'' indicator in the State, as the case may be, the name of 
the State and the beginning or ending of the extended benefit period, 
or high unemployment period, whichever is appropriate. If an ``on'' or 
``off'' EB period is determined by the Department to be based on a 
State's TUR Trigger Value, the Department publishes that information in 
the Federal Register as well.
    (2) Notification. The Department also notifies the heads of all 
other State agencies, and the Regional Administrators of the Employment 
and Training Administration of the State agency head's determination of 
the State ``on'' or ``off'' indicator for an extended benefit period, 
or high unemployment period (based on the insured unemployment rate in 
the State), or of the Department's determination of an ``on'' or 
``off'' indicator (based on the total unemployment rate in a State) for 
an extended benefit period or high unemployment period and of the 
indicator's effect.
    (b) Publicity by State. (1) Whenever a State agency head determines 
that there is an ``on'' indicator in the State by reason of which an 
extended benefit period (based on the insured unemployment rate in the 
State) will begin in the State, or an ``off'' indicator by reason of 
which an extended benefit period in the State (based on the insured 
unemployment rate) will end, the head of the State agency must promptly 
announce the determination through appropriate news media in the State 
after the Department accepts notice from the agency head in accordance 
the 615.12(f).
    (2) Whenever the head of a State agency receives notification from 
the Department in accordance with Sec.  615.12(f) that there is an 
``on'' indicator by reason of which an extended benefit period or high 
unemployment period (based on the total unemployment rate in the State) 
will begin in the State, or an ``off'' indicator by reason of which a 
regular extended benefit period or high unemployment period (based on 
the total unemployment rate) will end, the head of the State agency 
must promptly announce the determination through the appropriate news 
media in the State.
    (3) Announcements made in accordance with paragraphs (b)(1) or 
(b)(2) of this section must include the beginning or ending date of the 
extended benefit period or high unemployment period, whichever is 
appropriate. In the case of a regular EB period or high unemployment 
period that is about to begin, the announcement must describe clearly 
the unemployed individuals who may be eligible for extended 
compensation or high extended compensation during the period, and in 
the case of a regular EB period or high unemployment period that is 
about to end, the announcement must also describe clearly the 
individuals whose entitlement to extended compensation or high extended 
compensation will be terminated. If a high unemployment period is 
ending, but an extended benefit period will remain ``on,'' the 
announcement must clearly state that fact and the effect on entitlement 
to extended compensation.
    (c) Notice to individuals. (1) Whenever there has been a 
determination that a regular extended benefit period or high 
unemployment period will begin in a State, the State agency must 
provide prompt written notice of potential entitlement to Extended 
Benefits to each individual who has established a benefit year in the 
State that will not end before the beginning of the regular extended 
benefit period or high unemployment period, and who exhausted all 
rights under the State law to regular compensation before the beginning 
of the regular extended benefit period or high unemployment period.
    (2) The State agency must provide the notice promptly to each 
individual who begins to claim sharable regular benefits or who 
exhausts all rights under the State law to regular compensation during 
a regular extended benefit period or high unemployment period, 
including exhaustion by reason of the expiration of the individual's 
benefit year.
    (3) The notices required by paragraphs (c)(1) and (2) of this 
section must describe the actions required of claimants for sharable 
regular compensation and extended compensation and those 
disqualifications which apply to the benefits which are different from 
those applicable to other claimants for regular compensation which is 
not sharable.
    (4) Whenever there is a determination that a regular extended 
benefit period or high unemployment period will end in a State, the 
State agency must provide prompt written notice to each individual who 
is currently filing claims for extended compensation of the forthcoming 
end of the regular extended benefit period or high unemployment period 
and its effect on the individual's right to extended compensation.

0
11. Amend Sec.  615.14 by revising paragraph (c)(4) to read as follows:

Sec.  615.14  Payments to States.

* * * * *
    (c) * * *
    (4) As provided in section 204(a)(2)(C) of EUCA, for any week in 
which extended compensation is not payable because of the payment of 
trade readjustment allowances, as provided in section 233(c) of the 
Trade Act of 1974, and Sec.  615.7(d).
* * * * *

0
12. Revise Sec.  615.15 to read as follows:

Sec.  615.15  Records and reports.

    (a) General. State agencies must furnish to the Secretary such 
information and reports and make such studies as the Secretary decides 
are necessary or appropriate for carrying out the purposes of this 
part.
    (b) Recordkeeping. Each State agency must make and maintain records 
pertaining to the administration of the Extended Benefit Program as the 
Department requires, and must make all such records available for 
inspection, examination and audit by such Federal officials or 
employees as the Department

[[Page 57784]]

may designate or as may be required by law.

Portia Wu
Assistant Secretary for Employment and Training.
[FR Doc. 2016-18382 Filed 8-23-16; 8:45 am]
 BILLING CODE 4510-FW-P
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