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###### Department of Labor

###### Employment and Training Administration 

# AGENCY:

Employment and Training Administration, Labor. 

# ACTION:

Notice. 

# SUMMARY:

This Notice announces states' allotments for PY 2007 (July 1, 2007-June 30, 2008) for WIA Title I Youth, Adults and Dislocated Worker Activities programs; additional PY 2007 funding from WIA Section 173(e) for eligible states; final allotments for Employment Service (ES) activities under the Wagner-Peyser Act for PY 2007; and Work Opportunity Tax Credit and Welfare-to-Work Tax Credit program allotments for FY 2007. 

                        The WIA allotments for states and the final allotments for the Wagner-Peyser Act are based on formulas defined in their respective statutes. The WIA allotments for the outlying areas are based on a formula determined by the Secretary. As required by WIA section 182(d), on February 17, 2000, a Notice of the discretionary formula for allocating PY 2000 funds for the outlying areas (American Samoa, Guam, Marshall Islands, Micronesia, Northern Marianas, Palau, and the Virgin Islands) was published in the                         **Federal Register**                         at 65 FR 8236 (February 17, 2000). The rationale for the formula and methodology was fully explained in the February 17, 2000,                         **Federal Register**                         Notice. The formula for PY 2007 is the same as used for PY 2000 and is described in the section on Youth Activities program allotments. Comments are invited on the formula used to allot funds to the outlying areas.                     

# DATES:

Comments on the formula used to allot funds to the outlying areas must be received by May 7, 2007. 

# ADDRESSES:

                        Submit written comments to the Employment and Training Administration, Office of Financial and Administrative Management, 200 Constitution Avenue, NW., Room N-4702, Washington, DC 20210, Attention: Ms. Sherryl Bailey, 202-693-2813 (phone), 202-693-2859 (fax), e-mail:                         *bailey.sherryl@dol.gov*.                     

# FOR FURTHER INFORMATION CONTACT:

WIA Youth Activities allotments: Haskel Lowery at 202-693-3608 or LaSharn Youngblood at 202-693-3606; WIA Adult and Dislocated Worker Activities and ES final allotments: Mike Qualter at 202-693-3014. 

# SUPPLEMENTARY INFORMATION:

                    The Department of Labor (DOL or Department) is announcing WIA allotments for PY 2007 (July 1, 2007-June 30, 2008) for Youth Activities, Adults and Dislocated Worker Activities, and Wagner-Peyser Act PY 2007 final allotments. This document provides information on the amount of funds available during PY 2007 to states with an approved WIA Title I and Wagner-Peyser Act Strategic Plan for PY 2007, and information regarding allotments to the outlying areas. The allotments are based on the funds appropriated in the FY 2007 Continuing Appropriations Resolution, Public Law 110-5, February 15, 2007. Attached are tables listing the PY 2007 allotments for programs under WIA Title I Youth Activities (Attachment I), Adult and Dislocated Workers Employment and Training Activities (Attachments II and III, respectively), additional assistance under Section 173(e) (Attachment IV),                           ( print page 17186)                        and the PY 2007 Wagner-Peyser Act final allotments (Attachment V). Also attached are tables FY 2007 Work Opportunity Tax Credit and Welfare-to-Work Tax Credit allotments (Attachment VI).                 

*Youth Activities Allotments.*                     PY 2007 Youth Activities funds under WIA total $940,500,000. Attachment I includes a breakdown of the Youth Activities program allotments for PY 2007 and provides a comparison of these allotments to PY 2006 Youth Activities allotments for all states, outlying areas, Puerto Rico and the District of Columbia. Before determining the amount available for states, the total funding available for the outlying areas was reserved at 0.25 percent of the full amount appropriated for Youth Activities. On December 17, 2003, the President signed Public Law 108-188, the                     *Compact of Free Association Amendments Act of 2003*, which provides for consolidation of all funding, including WIA Title I, for the Marshall Islands and Micronesia into supplemental funding grants in the Department of Education. The Education appropriation for FY 2007 includes funding for these supplemental grants; therefore, WIA Title I funds are no longer being provided for these two areas. The Compact continues the availability of programs previously available to Palau through September 30, 2007, including WIA Title I funding provisions. The methodology for distributing funds to all outlying areas is not specified by WIA, but is at the Secretary's discretion. The methodology used is the same as used since PY 2000, i.e., funds are distributed among the remaining areas by formula based on relative share of number of unemployed, a 90 percent hold-harmless of the prior year share, a $75,000 minimum, and a 130 percent stop-gain of the prior year share. As in PY 2006, data for the relative share calculation in the PY 2007 formula were from 2000 Census data for all outlying areas, obtained from the Bureau of the Census (Bureau) and based on 2000 Census surveys for those areas conducted either by the Bureau or the outlying areas under the guidance of the Bureau. The total amount available for Native Americans is 1.5 percent of the total amount for Youth Activities, in accordance with WIA section 127. After determining the amount for the outlying areas and Native Americans, the amount available for allotment to the states for PY 2007 is $924,041,250. This total amount was below the required $1 billion threshold specified in section 127(b)(1)(C)(iv)(IV); therefore, as in PY 2006, the WIA additional minimum provisions were not applied, and, instead, as required by WIA, the Job Training Partnership Act (JTPA) section 202(a)(3) (as amended by section 701 of the Job Training Reform Amendments of 1992) minimums of 90 percent hold-harmless of the prior year allotment percentage and 0.25 percent state minimum floor were used. Also, as required by WIA, the provision applying a 130 percent stop-gain of the prior year allotment percentage was used. The three formula factors required in WIA use the following data for the PY 2007 allotments:                 

(1) Number of unemployed for Areas of Substantial Unemployment (ASU's), averages for the 12-month period, July 2005 through June 2006; 

(2) Number of excess unemployed individuals or the ASU excess (depending on which is higher), averages for the same 12-month period used for ASU unemployed data; and 

(3) Number of economically disadvantaged youth (age 16 to 21, excluding college students and military), from the 2000 Census. 

The ASU data for the PY 2007 allotments was identified by the states under Employment and Training Administration guidance for PY 2007 which required states to use special 2000 Census data based on households, obtained under contract with the Census Bureau and provided to states by the Bureau of Labor Statistics. These special 2000 Census data were used to avoid the 2000 Census data processing problem related to group quarters data identified last year, and it replaced the 1990 Census data used by states for identifying ASUs for PY 2006 allotments. 

## Adult Employment and Training Activities Allotments 

The total Adult Employment and Training Activities appropriation is $864,199,000. Attachment II shows the PY 2007 Adult Employment and Training Activities allotments and comparison to PY 2006 allotments by state. Like the Youth Activities program, the total available for the outlying areas was reserved at 0.25 percent of the full amount appropriated for Adult Activities. As discussed in the Youth Activities paragraph, beginning in PY 2005, WIA funding for the Marshall Islands and Micronesia is no longer provided; instead, funding is provided in the Department of Education's appropriation. The Adult Activities funds for grants to the remaining outlying areas, for which the distribution methodology is at the Secretary's discretion, were distributed among the areas by the same principles, formula and data as used for outlying areas for Youth Activities. After determining the amount for the outlying areas, the amount available for allotments to the states is $862,038,502. Like the Youth Activities program, the WIA minimum provisions were not applied for the PY 2007 allotments because the total amount available for the states was below the $960 million threshold required for Adult Activities in section 132(b)(1)(B)(iv)(IV). Instead, as required by WIA, the minimum allotments were calculated using the JTPA section 202(a)(3) (as amended by section 701 of the Job Training Reform Amendments of 1992) minimums of 90 percent hold-harmless of the prior year allotment percentage and 0.25 percent state minimum floor. Also, like the Youth Activities program, a provision applying a 130 percent stop-gain of the prior year allotment percentage was used. The three formula factors use the same data as used for the PY 2007 Youth Activities formula, except that data from the 2000 Census for the number of economically disadvantaged adults (age 22 to 72, excluding college students and military) were used. 

## Dislocated Worker Employment and Training Activities Allotments 

The total Dislocated Worker appropriation is $1,471,903,000. The total appropriation includes formula funds for the states, while the National Reserve is used for National Emergency Grants, technical assistance and training, demonstration projects (including Community-Based Job Training Grants), the outlying areas' Dislocated Worker allotments, and additional assistance to eligible states. Attachment III shows the PY 2007 Dislocated Worker Activities fund allotments by state. Like the Youth and Adult Activities programs, the total available for the outlying areas was reserved at 0.25 percent of the full amount appropriated for Dislocated Worker Activities. WIA funding for the Marshall Islands and Micronesia is no longer provided, as discussed above. The Dislocated Worker Activities funds for grants to outlying areas, for which the distribution methodology is at the Secretary's discretion, were distributed among the remaining areas by the same pro rata share as the areas received for the PY 2007 WIA Adult Activities program, the same methodology used in PY 2006. For the state distribution of formula funds, the three formula factors required in WIA use the following data for the PY 2007 allotments: 

                    (1) Number of unemployed, averages for the 12-month period, October 2005 through September 2006;                           ( print page 17187)    

(2) Number of excess unemployed, averages for the 12-month period, October 2005 through September 2006; and 

(3) Number of long-term unemployed, averages for calendar year 2005. 

Since the Dislocated Worker Activities formula has no floor amount or hold-harmless provisions, funding changes for states directly reflect the impact of changes in the number of unemployed. 

## Additional Funding From WIA Section 173(e) for Adult /Dislocated Worker Activities for Eligible States 

WIA Section 173(e) provides that up to $15 million from Dislocated Workers reserve funds is to be made available annually to certain states that receive less funds under the WIA Adult Activities formula than they would have received had the JTPA Title II-A Adult program formula been in effect. The amount of the grants is based on the difference between the WIA and JTPA formula allotments; funds are available for grants for up to eight states with the largest difference. The additional funding must be used for Adult or Dislocated Worker Activities. In PY 2007, five states are eligible for these additional funds, for a total of $5,438,783 (Attachment IV). 

## Wagner-Peyser Act Final Allotments 

The appropriated level for PY 2007 for ES grants totals $715,883,000. After reserving $18 million for the postage reserve and determining the funding for outlying areas, allotments to states were calculated using the formula set forth at section 6 of the Wagner-Peyser Act (29 U.S.C. 49e). PY 2007 formula allotments were based on each state's share of calendar year 2006 monthly averages of the civilian labor force (CLF) and unemployment. The Secretary of Labor is required to set aside up to three percent of the total available funds to assure that each state will have sufficient resources to maintain statewide employment service activities, as required under section 6(b)(4) of the Wagner-Peyser Act. In accordance with this provision, the three percent set-aside funds are included in the total allotment. The set-aside funds were distributed in two steps to states that have lost in relative share of resources from the previous year. In Step 1, states that have a CLF below one million and are also below the median CLF density were maintained at 100 percent of their relative share of prior year resources. All remaining set-aside funds were distributed on a pro-rata basis in Step 2 to all other states losing in relative share from the prior year but not meeting the size and density criteria for Step 1. The distribution of Wagner-Peyser funds (Attachment V) includes $696,181,664 for states, as well as $1,701,196 for outlying areas, and a postage reserve of $3,347,139. 

Traditionally, a portion of Wagner-Peyser formula funds have been set aside in a reserve to centrally pay for states' postage costs associated with the conduct of labor exchange services. Beginning October 1, 2007 (FY 2008), all states and outlying areas will be required to pay their own postage costs with their formula grants, and there will no longer be any postage amounts reserved from the formula funds. States were given the option to implement the postage conversion earlier than October 1, 2007, at the beginning of any quarter in FY 2007. In addition to the formula funds, PY 2007 allotments will include postage funds applicable to the period of postage conversion implementation during PY 2007 as described below. 

The total amount of PY 2007 postage funds for ES activities is $18,000,000. Seventy-five percent of this amount will be distributed to all states and outlying areas based on their pro rata share of the PY 2007 formula funds to cover postage conversion implementation which begins October 1, 2007 (last three quarters of PY 2007). In addition, the early implementer states will be given their pro rata share of the postage reserves left to cover the first quarter of PY 2007, thus giving them a full year of postage funds. Next year, for PY 2008, there will be no postage reserve taken from funds distributed by formula; all funds will be distributed by formula and states and outlying areas will use their formula grants to cover all postage costs. 

Under section 7 of the Wagner-Peyser Act, 10 percent of the total sums allotted to each state shall be reserved for use by the Governor to provide performance incentives for ES offices, services for groups with special needs, and for the extra costs of exemplary models for delivering job services. 

## Work Opportunity Tax Credit and Welfare-to-Work Tax Credit Programs: Grants to States 

Total funding for FY 2007 is $17,677,000. After reserving funds for postage and $20,000 for the Virgin Islands, funds were distributed to states by administrative formula with a $64,000 minimum allotment and a 95 percent stop-loss/130 percent stop-gain from the prior year allotment share percentage. The allotment formula data factors and related percentages used are as follows: 

(1) 50 percent based on each state's relative share of total FY 2005 certifications issued for the WOTC/WtW Tax Credit programs; 

(2) 30 percent based on each state's relative share of the CLF for twelve months ending September 2006; and 

(3) 20 percent based on each state's relative share of the adult recipients of Temporary Assistance for Needy Families (TANF) for FY 2005. 

The final distribution of WOTC funding includes $17,144,367 for states, $20,000 for the Virgin Islands, and a postage reserve of $512,633. The total allotment distribution by state is displayed in Attachment VI. 

As in the Wagner-Peyser program, the full year amount of postage funds will not be held in reserve. However, since this program's funds are fiscal year funds and FY 2007 is the transition period for states which opted to implement postage conversion earlier than FY 2008, only the early implementer states will receive additional postage funds in their FY 2007 grant. The additional postage amount for these states will be based on their FY 2007 formula pro rata share of the postage reserve amount based on their quarter of implementation. In FY 2008, there will be no postage reserve taken from funds distributed by formula; all funds will be distributed by formula and states will use their formula grants to cover all postage costs. 

Signed at Washington, DC, on this 3rd day of April, 2007. 

Emily Stover DeRocco, 

Assistant Secretary for Employment and Training.

      ( print page 17188)          ( print page 17189)          ( print page 17190)          ( print page 17191)          ( print page 17192)          ( print page 17193)          ( print page 17194)    

[FR Doc. E7-6487 Filed 4-5-07; 8:45 am] 

BILLING CODE 4510-FN-P