Federal Register / Vol. 78, No. 37 / Monday, February 25, 2013 / Proposed Rules 12655 

109–8131–02–159, and thereafter at intervals 

not to exceed 200 hours TIS, inspect the 

linings and measure the internal diameter of 

the bushings, P/N 109–8131–30–109, by 

referring to Figure 2 of the BT. If the internal 

diameter of the bushing exceeds 41.35 

millimeters, replace the bushing. 

(5) If there is a crack in a T/R blade, before 

further flight, replace the cracked T/R blade. 

(6) Revise the Airworthiness Limitations 

section of the maintenance manual to reflect 

that a T/R blade, P/N 109–8132–01–111, 

which has not been operated as part of T/R 

hub and blade assembly, P/N 109–8131–02– 

151, has retirement life of 1,000 hours TIS. 

(g) Special Flight Permit 

Special flight permits will not be issued. 

(h) Alternative Methods of Compliance 

(AMOCs) 

(1) The Manager, Safety Management 

Group, FAA, may approve AMOCs for this 

AD. Send your proposal to: Sharon Miles, 

Aviation Safety Engineer, Regulations and 

Policy Group, Rotorcraft Directorate, FAA, 

2601 Meacham Blvd., Fort Worth, Texas, 

76137; telephone (817) 222–5110; email 

sharon.y.miles@faa.gov. 

(2) For operations conducted under a 14 

CFR part 119 operating certificate or under 

14 CFR part 91, subpart K, we suggest that 

you notify your principal inspector, or 

lacking a principal inspector, the manager of 

the local flight standards district office or 

certificate holding district office before 

operating any aircraft complying with this 

AD through an AMOC. 

(i) Additional Information 

The subject of this AD is addressed in 

European Aviation Safety Agency AD No. 

2007–0010, dated January 31, 2007. 

(j) Subject 

Joint Aircraft Service Component (JASC) 

Code: 6410, Tail Rotor Blades. 

Issued in Fort Worth, Texas, on February 

11, 2013. 

Kim Smith, 

Manager, Rotorcraft Directorate, Aircraft 

Certification Service. 

[FR Doc. 2013–04220 Filed 2–22–13; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

20 CFR Part 619 

RIN 1205–AB64 

Federal-State Unemployment 

Insurance (UI) Program; Data 

Exchange Standardization as Required 

by Section 2104 of the Middle Class 

Tax Relief and Job Creation Act of 

2012 

AGENCY: Employment and Training 

Administration, Labor. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Department of Labor’s 

(Department’s) Employment and 

Training Administration proposes to 

designate in regulation data exchange 

standards, developed in consultation 

with an interagency work group 

established by the Office of Management 

and Budget (OMB), for Unemployment 

Insurance (UI) administration as 

required by amendments to Title IX of 

the Social Security Act (SSA) made by 

the Middle Class Tax Relief and Job 

Creation Act of 2012 (the Act). This 

proposed regulation would establish 

data exchange standards for three 

categories of information: real-time 

applications on the Interstate 

Connection Network (ICON); the State 

Information Data Exchange System 

(SIDES); and implementation of the 

standards identified for ICON and 

SIDES in major Information Technology 

(IT) modernization projects to upgrade 

UI Benefits and Tax systems by State 

Workforce Agencies (SWAs) using 

Federal funds. 

DATES: Submit comments on or before 

April 26, 2013. 

ADDRESSES: You may submit comments, 

identified by Regulatory Information 

Number (RIN) 1205–AB64, by one of the 

following methods: 

Federal e-Rulemaking Portal: http:// 

www.regulations.gov. Follow the Web 

site instructions for submitting 

comments. 

Mail and hand delivery/courier: 

Written comments, disk, and CD–ROM 

submissions may be mailed to Michael 

S. Jones, Acting Administrator, Office of 

Policy Development and Research, U.S. 

Department of Labor, 200 Constitution 

Avenue NW., Room N–5641, and 

Washington, DC 20210. 

Instructions: Label all submissions 

with ‘‘RIN 1205–AB64.’’ 

Please submit your comments by only 

one method. Please be advised that the 

Department will post all comments 

received that relate to the proposed data 

exchange standardization on http:// 

www.regulations.gov without making 

any change to the comments or 

redacting any information. The http:// 

www.regulations.gov Web site is the 

Federal e-rulemaking portal and all 

comments posted there are available 

and accessible to the public. Therefore, 

the Department recommends that 

commenters remove personal 

information such as Social Security 

Numbers, personal addresses, telephone 

numbers, and email addresses included 

in their comments as such information 

may become easily available to the 

public via the http:// 

www.regulations.gov Web site. It is the 

responsibility of the commenter to 

safeguard personal information. 

Also, please note that due to security 

concerns, postal mail delivery in 

Washington, DC may be delayed. 

Therefore, the Department encourages 

the public to submit comments on 

http://www.regulations.gov. 

Docket: All comments on this 

proposed rule will be available on the 

http://www.regulations.gov Web site 

and can be found using RIN 1205–AB64. 

The Department also will make all the 

comments it receives available for 

public inspection by appointment 

during normal business hours at the 

above address. If you need assistance to 

review the comments, the Department 

will provide appropriate aids such as 

readers or print magnifiers. The 

Department will make copies of this 

proposed rule available, upon request, 

in large print and electronic file on 

computer disk. To schedule an 

appointment to review the comments 

and/or obtain the proposed rule in an 

alternative format, contact the Office of 

Policy Development and Research at 

(202) 693–3700 (this is not a toll-free 

number). You may also contact this 

office at the address listed below. 

Instructions for Submitting Comments 

on Paperwork Burden: Submit any 

comments that concern the information 

collection request to the Office of 

Information and Regulatory Affairs, 

Attn: OMB Desk Officer for DOL–ETA, 

Office of Management and Budget, 

Room 10235, 725 17th Street NW., 

Washington, DC 20503, Fax: 202–395– 

6881 (this is not a toll-free number), 

email: OIRA_submission@omb.eop.gov. 

OMB recommends that comments on 

the information collection requirements 

be submitted within 30 days of 

publication of this NPRM. Comments on 

the information collections may also be 

submitted to the ETA in the same 

manner as any other issue addressed in 

this NPRM. 

FOR FURTHER INFORMATION CONTACT: 

Michael S. Jones, Acting Administrator, 

Office of Policy Development and 

Research, U.S. Department of Labor, 200 

Constitution Avenue NW., Room N– 

5641, Washington, DC 20210; telephone 

(202) 693–3700 (this is not a toll-free 

number). 

Individuals with hearing or speech 

impairments may access the telephone 

number above via TTY by calling the 

toll-free Federal Information Relay 

Service at 1–800–877–8339. 

SUPPLEMENTARY INFORMATION: The 

preamble to this proposed rule is 

organized as follows: 

I. Background—provides a brief description 

of the development of the proposed rule. 


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1The Department’s Office of Unemployment 

Insurance uses the term Unemployment 

Compensation (UC) when referring to UC benefits 

paid or UC laws and to use the term Unemployment 

Insurance (UI) to refer to the UI program, 

administration and operations. 

2 XML is a nonproprietary, searchable, computerreadable format, and has the capacity to be 

upgraded continually, as necessary. Interoperability 

helps information technology systems more readily 

interface to carry out shared functions and manage 

communications. 

II. Section-by-Section Review—summarizes 

and discusses the proposed regulations. 

III. Administrative Information—sets forth 

the applicable regulatory requirements. 

I. Background 

On February 22, 2012, the President 

signed the Act. Section 2104 of the Act 

amends Title IX, SSA (42 U.S.C. 1101 et 

seq.) by adding a new section 911, 

which requires the Department to issue 

rules, developed in consultation with an 

interagency workgroup established by 

the Office of Management and Budget 

(OMB), that establish data exchange 

standards for certain functions related to 

administration of the Unemployment 

Insurance (UI) 1 program. Before 

enactment of this requirement for data 

exchange standardization, the 

Department had been a proponent of 

and strong advocate for the use of open 

source technologies and data exchange 

standards in the development of IT 

systems supporting critical UI functions 

(such as ICON and SIDES), and of 

SWAs’ overall UI information 

technology modernization efforts. 

Section 911, SSA, contains two major 

subsections (a) and (b), each of which 

requires data exchange standards; these 

requirements are discussed in detail 

below. 

Section 911(a)(1), SSA, requires that 

DOL ‘‘shall, by rule, designate a data 

exchange standard for any category of 

information required under title III [42 

U.S.C. 501 et seq.], title XII [42 U.S.C. 

1401 et seq.], or this title [IX].’’ 

(Emphasis added.) This allows the 

Department to identify ‘‘any’’ category 

of information under the specified titles 

to require, by rule, for which to 

establish a data exchange standard. 

Section 911(b)(1), SSA, requires that 

DOL ‘‘shall, by rule, designate data 

exchange standards to govern the 

reporting required under [the same 

specified titles].’’ The Department has 

chosen to establish data exchange 

standards for information required 

under section 303(a)(1), SSA, that meet 

the requirements of both sections 

911(a)(1) and 911(b)(1), SSA. 

Section 303(a)(1), SSA, commonly 

known as the ‘‘methods of 

administration’’ requirement, provides 

that State law, as a condition of the 

State receiving UC administrative 

grants, must include ‘‘such methods of 

administration...as are found by the 

Secretary of Labor to be reasonably 

calculated to insure full payment of 

unemployment compensation when 

due.’’ Section 303(a)(1), SSA, was 

chosen because it is the foundational 

statutory authority for the Department’s 

guidance to States on the administration 

of the UI program, including guidance 

on program operations and reporting 

requirements. 

The Department chose to establish 

data exchange standards for categories 

of information under Title III, SSA, 

because Titles IX and XII, SSA, provide 

fewer opportunities for establishment of 

data exchange standards that would 

benefit the UI system broadly, given that 

their focus is primarily on 

Unemployment Trust Fund (UTF) 

management issues. Title IX establishes 

the account structure for the UTF, and 

Title XII establishes the processes for 

States to obtain advances if their States’ 

accounts in the UTF are depleted. While 

Titles IX and XII, SSA, relate to how 

money flows between accounts, there 

are no data exchange activities 

associated with these two titles. 

While developing this proposed rule 

for data exchange standards, the 

Department considered and determined 

that it is neither feasible nor practicable 

to set standards for all reports under the 

three titles listed in Section 911(b), SSA. 

Imposing data exchange standards for 

certain reporting for the UI program is, 

in fact, counter-productive and would 

interfere with the Department’s ability 

to use and analyze the data. For 

example, State UI agencies currently 

send data, such as weekly UI claims 

data, to the Department in a format that 

enables the Department to store the data 

in a relational database for purposes of 

analysis and performance management. 

If data were instead required to be 

received in eXtensible Markup 

Language (XML) 2 format, preprocessing of the data would be 

required to store this information within 

a relational database, thus adding a 

layer of complexity for the analytical 

software. That approach would result in 

unnecessary inefficiency and there 

would be no benefit to any user of the 

data. 

The Department did identify an area 

of reporting in which data exchange 

standardization is appropriate—SIDES. 

SIDES involves the type of data 

transactions that would benefit from a 

designated searchable, computerreadable and interoperable XML format 

standard. Therefore, the XML format is 

the designated data exchange standard 

for SIDES in this proposed rule. 

Nevertheless, we request comment on 

how the Department might apply the 

data exchange standards of Section 

911(b), SSA, more broadly to the three 

listed titles. 

Sections 911(a)(1) and 911(b)(1), SSA, 

both require consultation with an 

interagency work group established by 

OMB. The Department has participated 

in a work group convened by OMB for 

this purpose. The consultation included 

discussion of the standards proposed in 

this rulemaking as well as other possible 

standards that might be established in 

the future that impact multiple Federal 

programs. The work group provided the 

opportunity for multiple agencies to 

share their approaches to data exchange 

standardization, but to date, no crossagency data exchange functions have 

been identified as being feasible, 

efficient and cost effective to implement 

data exchange standards as required by 

section 911, SSA. The Department will 

continue to work with OMB and other 

Federal agencies to identify additional 

data exchange standards that support 

interagency data exchange activities. 

Additional standards identified will be 

the subject of future regulations 

promulgated through advance notice 

and opportunity for public comment as 

required by section 553 of the 

Administrative Procedure Act (APA). 

Sections 911(a)(1) and 911(b)(1), SSA, 

also both provide that the Department 

should consider State and employer 

perspectives. The Department consulted 

with States on the content of the rules 

required by section 911, SSA, through 

the National Association of State 

Workforce Agencies (NASWA), 

including NASWA’s UI Committee and 

its Information Technology Support 

Center Steering Committee. The 

feedback provided from this 

consultation was that States continue to 

struggle with antiquated IT 

infrastructure and vary widely in their 

capacity to implement new technologies 

that support data exchange 

standardization. In addition, the limits 

of State IT capacity have been severely 

tested since the onset of the last 

recession through the present, as the 

economy slowly recovers. During this 

period, States experienced 

extraordinarily high claims loads and 

implemented a very complex 

Emergency Unemployment 

Compensation (EUC) program and 

extensions. EUC had multiple iterations 

over the course of the recession and 

during the recovery, requiring States to 

reprogram computers frequently to 

accommodate the changes to the 

program. In addition, the Act required 

implementation of a number of new 


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3The use of the term ‘‘XML’’ means XML and any 

XML-based markup language(s) that defines a set of 

rules for encoding documents and/or data in a 

format that is both human-readable and machinereadable. The term ‘‘XML’’ encapsulates the 

provisions specified in newly added section 911, 

SSA. 

4 ICON applications are available in real-time and 

batch mode. States vary in the use of real-time 

applications versus the batch mode. The batch 

mode allows for processing of multiple requests at 

a scheduled time instead of immediate ‘‘real-time’’ 

processing. 

reforms to the EUC program, also 

requiring computer programming and 

rapid implementation. States also 

identified lack of sufficient funding as a 

challenge to modernizing their IT 

systems. States recommended 

leveraging work to implement data 

exchange standards as a desirable 

approach to meeting the data exchange 

requirements of section 911, SSA. 

The Department also considered 

employers’ perspectives in the 

development of this regulation. The data 

exchange standards proposed in this 

rule to address the requirements of 

sections 911(a)(1) and 911(b)(1), SSA, 

support processes that will reduce the 

burden employers have in providing 

required information to the SWAs. The 

first data exchange standard will apply 

to ICON, which facilitates the sharing of 

employer reported wage information 

among the States. Efficiently sharing 

routinely reported wage data among the 

States prevents SWAs from having to 

contact employers through manual 

processes to provide the wage 

information again. The second standard 

mandated by this rule relates to SIDES. 

The Department is currently working 

with States to automate and standardize 

the flow of data between SWAs and 

employers and/or employer third-party 

administrators (TPAs). TPAs are 

organizations that contract with 

employers to act on their behalf with 

SWAs for processing the employers’ UC 

claims-related activities, such as filing 

quarterly wage and tax reports, 

responding to requests for separation 

information, and managing UC accounts 

and costs. The goal of SIDES is to 

effectively automate and streamline the 

data exchange that occurs between 

SWAs and employers or their TPA so as 

to enable efficiencies. Both employers 

and TPAs have been involved in the 

development of all SIDES data exchange 

modules, including the choice of XML 

as the data exchange standard for 

SIDES. Employers and TPAs are 

represented on the SIDES operations 

committee. SIDES provides a method for 

SWAs, employers, and TPAs to improve 

timeliness and accuracy of UC claims 

processing, and reduce costs by creating 

an electronic exchange of information 

using a standardized, secure format with 

data validations that are strictly 

enforced to prevent the transfer of 

incomplete or incorrectly formatted 

data. Both ICON and SIDES are 

discussed in more detail below. 

To meet the requirements of section 

911, SSA, the Department is designating 

XML as the data exchange standard for 

two systems that support the reporting 

of data and information for two core UI 

administrative functions: (1) Employer 

reporting of information requested by 

SWAs to support eligibility 

determinations (SIDES); and (2) the 

reporting and exchange of wage 

information among the States that also 

supports determination of eligibility for 

benefits (ICON). XML is a markup 

language that defines a set of rules for 

encoding documents in a format 

designed to structure, store and 

transport data. XML data are stored in 

plain text format that is both humanreadable and machine-readable. Use of 

XML also provides for a software- and 

hardware-independent method of 

exchanging data over incompatible 

applications or systems over the 

Internet. 

Section 911(a)(2), SSA, requires that 

the data exchange standard 

implemented in this rulemaking ‘‘to the 

extent practicable, be nonproprietary 

and interoperable.’’ Section 911(b)(2), 

SSA, also requires that the data 

exchange standards implemented in this 

rulemaking ‘‘to the extent practicable 

incorporate a widely accepted, 

nonproprietary, searchable, computerreadable format,’’ and ‘‘be capable of 

being continually upgraded as 

necessary.’’ Section 911(b)(3), SSA, 

specifically requires that this rule, ‘‘to 

the extent practicable, incorporate 

existing nonproprietary standards, such 

as the eXtensible Markup Language.’’ 

The data exchange standards 

established in this proposed rule 

mandate the use of XML to meet the 

aforementioned requirements of 

sections 911(a) and (b), SSA. 

XML3 provides an interoperable 

standard framework using common 

computer languages and standard 

formats and protocols to manage certain 

functions or communications. Gaining 

interoperability among the Department 

and 53 States and territories with 

different IT infrastructure and different 

program parameters (State UI programs 

have differing eligibility requirements 

and processes for supporting those 

requirements) is challenging. Therefore, 

the Department is focusing on core 

functions and reporting requirements 

that are truly common among the States 

to codify data exchange standards. 

Finally, section 911(a)(3)(A), SSA, 

requires that for data exchange reporting 

standards, the rule, to the extent 

practicable, incorporate interoperable 

standards developed and maintained by 

an international voluntary consensus 

standards body. The XML standard 

herein designated meets this 

requirement as it is recognized by the 

World Wide Web Consortium, an 

international voluntary consensus 

standards body. The rule also meets the 

requirement of incorporating standards 

developed and maintained by 

intergovernmental partnerships like the 

National Informational Exchange Model 

(NIEM) referenced in section 

911(a)(3)(B), SSA. XML is a data 

exchange standard recognized by NIEM. 

The standard to be considered under 

Section 911(a)(3)(C), SSA, requires 

incorporation, to the extent practicable, 

of ‘‘interoperable standards developed 

and maintained by Federal entities with 

authority over contracting and financial 

assistance, such as the Federal 

Acquisition Regulations Council.’’ This 

applies to contracting and procurement 

processes and is not applicable to UI 

processes. 

In accordance with these provisions, 

the Department proposes the following 

in this rulemaking: 

• Under section 911(a), SSA, 

designating XML as the data exchange 

standard for the real-time applications 4

of ICON; 

• Under section 911(a), SSA, 

designating XML as the standard for the 

SIDES data exchange modules; 

• Under section 911(b), SSA, 

designating XML as the data exchange 

standard to govern reporting of 

information shared through SIDES; and 

• Under section 911(a), SSA, 

designating XML as the data exchange 

standard for real-time applications of 

ICON and SIDES data exchange 

modules in association with major IT 

modernization project using Federal 

funds. 

The Department is not ruling out the 

establishment of additional data 

exchange standards by regulation, 

promulgated through advance notice 

and opportunity for public comment, in 

the future. The Department intends to 

continue to explore other functions 

where data exchange standards would 

be valuable to the UI program and as it 

relates to shared data exchange with 

other Federal agencies. 

ICON 

ICON is used to implement sections 

3304(a)(9)(A) and (B) of the Federal 

Unemployment Tax Act (FUTA), 

providing for interstate and combinedVerDate Mar<15>2010 14:27 Feb 22, 2013 Jkt 229001 PO 00000 Frm 00025 Fmt 4702 Sfmt 4702 E:\FR\FM\25FEP1.SGM 25FEP1

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5Section 3304(a)(9)(A), (FUTA) requires, as a 

condition of the Secretary’s certification of a State 

law under FUTA, that ‘‘compensation shall not be 

denied or reduced to an individual solely because 

he files a claim in another State * * * or because 

he resides in another State * * * at the time he files 

a claim for unemployment compensation.’’ Section 

3304(a)(9)(B), FUTA, also requires as a condition of 

the Secretary’s certification that ‘‘the State shall 

participate in any arrangements for the payment of 

compensation on the basis of combining an 

individual’s wages and employment covered under 

the State law with his wages and employment 

covered under the State unemployment 

compensation law of other States* * *’’ 

wage claims.5 ICON enables States to 

request, submit, and receive much of the 

information necessary to establish 

claims and determine eligibility. The 

requirement to pay UC ‘‘when due’’ 

under section 303(a)(1), SSA, includes 

timeliness of these payments. Interstate 

and combined wage claims are more 

complex to administer since they 

require communication and 

transmission of information between 

States or between a State and a Federal 

agency. To ensure that these claims are 

paid ‘‘when due,’’ the Department 

supports development and maintenance 

of ICON. ICON is a secure multipurpose telecommunications network 

that supports the transfer of data among 

the SWAs needed for critical program 

functions, including: 

• Interstate Benefits/Combined-Wage 

Claims; 

• Unemployment Compensation for 

Federal Civilian Employees and 

Unemployment Compensation for ExServicemembers programs; 

• The Wage Record Interchange 

System, which allows SWAs to obtain 

wage data for program performance 

purposes of individuals who have 

participated in workforce investment 

programs in SWAs; 

• The UI Inquiry data exchange with 

the Social Security Administration 

(Social Security) that enables SWAs to 

validate Social Security Numbers 

(SSNs) with Social Security; and 

• The Health Coverage Tax Credit 

that enables a SWA to transmit 

information to the Internal Revenue 

Service about individuals eligible for 

help paying for their health insurance 

coverage. 

The Department proposes XML as the 

data exchange standard under section 

911(a), SSA, for a subset of these 

functions due to both State and ICON 

capacity to adopt standards for some of 

these functions at this time. In relation 

to these chosen functions, ICON 

currently supports the following 

applications in real-time allowing for 

States to use XML standards for these 

functions. These are applications 

currently used by some SWAs to 

support the processing of all UC claims: 

• Interstate Wages and Benefits 

Inquiries/Responses, which supports 

online transmission of interstate wages 

and benefits inquiries and responses 

between SWAs; 

• Withdrawn/Invalid Claims, which 

allows for the posting and viewing of 

withdrawn or invalid claim information 

for SWAs; and 

• State Identification Inquiry, which 

allows SWAs to inquire about wages 

reported to other SWAs by SSN. 

Currently, seven SWAs are involved 

in modernizing some of their ICON 

applications and it is not practical to 

require all States to comply with this 

standard immediately. The Department 

contemplates providing SWAs lead time 

to adopt and implement the new data 

exchange standard for these 

applications. Since States need time to 

implement the real-time ICON 

applications, it is not feasible to 

designate a data exchange standard to 

govern the reporting of this information 

under section 911(b), SSA, at this time. 

Accordingly, as explained below, the 

Department proposes that all SWA’s 

using real-time ICON applications 

comply with the XML data exchange 

standard no later than September 30, 

2018. A SWA may request an extension 

of the September 2018 deadline if it 

demonstrates that resources are not 

available to meet this requirement. 

These requests must be submitted in 

writing to the Administrator of the 

Office of Unemployment Insurance no 

later than 6 months before the deadline; 

requests will be reviewed and decided 

within 30 days. 

SIDES 

SIDES is necessary to effectuate the 

Standard for Claim Determinations— 

Separation Information, codified in 

regulation at 20 CFR part 625 Appendix 

B. This standard is based significantly 

on the ‘‘methods of administration’’ 

requirement in section 303(a)(1), SSA, 

and includes a requirement that a State 

promptly obtain information from the 

worker, employer, or other source that 

is sufficient to reasonably insure 

payment of UC when due. For this 

reason, the Department supports 

development and maintenance of 

SIDES, which enables States to 

exchange information with employers 

electronically, thereby markedly 

improving the timeliness and accuracy 

of the employer-provided information 

about the reasons individuals separated 

from employment. 

SIDES is an automated information 

exchange and reporting system to 

standardize SWAs’ delivery of 

information to employers and collection 

of information by SWAs from employers 

and TPAs. In FY 2010, the first format 

of SIDES for exchange of employee 

separation information was 

implemented. This exchange of 

information with employers or their 

TPAs on the circumstances underlying 

individual UC claimants’ job 

separations will reduce UC payments to 

ineligible claimants, yield 

administrative cost savings to both 

employers and taxpayers, and promote 

more timely benefit determinations. 

Currently, 29 SWAs and 3 large TPAs 

are participating in the SIDES effort. In 

FY 2011, the SIDES exchange of data to 

verify claimant wages was 

implemented. The addition of the 

earnings verification exchange allows 

SWAs and employers to more quickly 

and accurately verify when UC 

claimants return to work, thus reducing 

the leading cause of UC overpayments: 

claimants’ receipt of UC while 

employed. 

SIDES is managed by NASWA which 

contracts with a vendor for its 

maintenance, support, and operations. 

The Department has provided specific 

funding to State consortia and SWAs for 

development, maintenance, and 

operations of SIDES. State consortia are 

groups of States collaborating to jointly 

establish a project team to oversee the 

design, development and 

implementation of an IT solution that 

will be shared across the States. The 

Department recently funded a 

consortium of States to oversee the 

development of new SIDES data 

exchanges modules to allow SWAs to 

notify employers and TPAs of benefits 

charges to their accounts and of nonmonetary determinations. SWAs, 

participating in the SIDES consortia, 

identify and help prioritize new SIDES 

modules to be developed and direct 

these funds to NASWA for the 

development of these modules. All 

SWAs using SIDES modules provide 

administrative funding to NASWA for 

the continued operations of SIDES. 

The Department continues to facilitate 

the expansion and enhancement of the 

functionality and use of SIDES as a vital 

tool for SWAs with respect to 

prevention and detection of improper 

payments, and has provided 

supplemental funding to a State 

consortium for the development of 

additional data exchange modules. 

These modules include: 

• UC Benefit Charge Notices. This 

enhancement will make it possible for 

SWAs to provide employers notice of 

benefit charges to their accounts 

electronically rather than by paper and 

mail. This permits a quicker delivery 

and review by the employer and the 

ability to reply electronically if the 


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charges are questionable. This expedited 

information exchange can detect 

potential improper payments earlier, 

particularly those related to identity 

theft and employees that return to work 

and continue to collect benefits. 

• Non-Monetary Determinations 

Exchange. This enhancement will notify 

employers electronically, rather than on 

paper, of SWA decisions on the 

eligibility of their former workers who 

quit or were let go for cause. This will 

improve the timeliness of employer 

appeals and allow for quicker appeal 

decisions, halting improper payments 

faster if the employer prevails in the 

appeal. 

Additionally, several other data 

exchange modules are under 

consideration for the expansion of 

SIDES including Monetary and Potential 

Charges, and Appeals Decisions. The 

XML standard will apply to the 

development of these additional data 

exchange modules as well. 

The proposed rule designates a data 

exchange standard under section 911(a), 

SSA, to apply to the SIDES data 

exchange modules and designates a 

standard under section 911(b), SSA, to 

govern reporting of information through 

SIDES data exchange modules. 

Major IT Modernization of UI Benefits 

and Tax Systems 

For the purpose of this regulation, a 

major IT Modernization of UI Benefits 

and Tax systems includes conversion, 

re-engineering, rewriting, or transferring 

of an existing system to a modernized 

framework such as transferring a 

process from mainframe operations to 

web-based operations, converting to 

modern computer programming 

languages, or upgrading software 

libraries, protocols, or hardware 

platform and infrastructure. As the 

Department provides funding to States 

to modernize their information 

technology systems, the opportunity 

exists to use new data exchange 

standards that improve operations of the 

UI system as a whole and may further 

enable improved data exchanges with 

other States and Federal agencies. 

The Department facilitates SWAs’ 

efforts to modernize IT systems 

supporting their UI programs by 

providing funding for administration 

and operations, and appropriate 

technical assistance. While the FederalState structure of the UI program places 

primary responsibility for its 

administration on the States, the 

Department provides periodic 

supplemental funding opportunities for 

IT modernization activities. In addition, 

Congress periodically provides special 

distributions of administrative UI 

funding to States. 

Federal funds for UI modernization 

efforts come primarily from three 

sources: (1) Supplemental budget funds 

that are designated by the Department 

for State IT modernization efforts, (2) 

State UI administration funding, and (3) 

special distributions. State 

administration funding primarily 

consists of State UI operations funds (an 

administrative grant issued by the 

Department at the beginning of each 

fiscal year). Recent special distributions 

to States, pursuant to section 903, SSA, 

include those provided under the Job 

Creation and Worker Assistance Act of 

2002 funds (distributed under the Reed 

Act, a mechanism by which the Federal 

government transfers surplus UI funds 

to States) and American Recovery and 

Reinvestment Act funds (an economic 

stimulus package enacted in February 

2009). Also, since 2009, the Department 

has provided supplemental funding to 

State consortia to develop jointly 

functional requirements and 

development of modernized UI IT 

Benefits and/or Tax systems. One of the 

requirements was that the technology 

tools developed use open source 

components to the extent feasible, be 

transferable, and be capable of being 

shared by multiple SWAs. The goal is 

for multiple SWAs to share common 

systems/tools that accommodate each 

SWA’s specific needs. Each of the 

consortia has its State leadership 

engaged in the process and soliciting 

vendors to assist with the system design 

and development efforts. 

This proposed rule will require 

SWAs, when using Federal funds to 

modernize their UI systems, to use XML 

as a data exchange standard when 

developing the functionality to interface 

with ICON, to implement SIDES and the 

reporting of information through SIDES. 

This requirement will potentially 

further accelerate State adoption of this 

standard for both functions. The 

Department strongly encourages SWAs, 

to the extent feasible, to begin 

conforming to the XML standard for any 

major UI IT modernization projects 

already underway. 

Effective Date 

Section 2104(b)(1) of the Act requires 

that a proposed rule under section 

911(a), SSA, be issued ‘‘within 12 

months after the date of the enactment 

of this section,’’ and a final rule to be 

issued ‘‘after public comment, within 24 

months after such date of enactment.’’ 

Section 2104(b)(2) of the Act requires 

that a proposed rule under section 

911(b), SSA, will ‘‘become effective 

with respect to reports required in the 

first reporting period, after the effective 

date of the final rule referred to in 

paragraph (1) of this subsection.’’ 

Accordingly, we propose that the data 

exchange standard for SIDES, under 

both sections 911(a) and (b), SSA, 

become effective 30 days after 

publication of the final rule, consistent 

with the APA as codified at 5 U.S.C. 

553(d). States implementing new data 

exchange modules after that date will 

utilize XML as the data exchange 

standard. 

Additionally, we propose that the 

date by which SWAs will be required to 

comply with the data exchange standard 

for ICON, proposed under section 

911(a), SSA, to be September 30, 2018. 

This will allow States to begin 

implementing the standard as soon as 

practicable, while still providing 

enough advance time to account for the 

current technology capacity of States 

and the fact that many States will need 

to make substantial changes to their 

technology systems to implement XML 

for their ICON exchanges. 

Finally, the effective date of 

designation of XML as the data 

exchange standard for SIDES data 

exchange modules and for the real-time 

ICON applications, proposed under 

section 911(a), SSA, is 30 days after 

publication of the final rule, consistent 

with the APA as codified at 5 U.S.C. 

553(d). 

II. Section-by-Section 

Definitions (§ 619.1) 

This section proposes definitions of 

terms used in this rule. Most are selfexplanatory; however, of particular note 

is paragraph (c), which defines XML, 

the standard we propose to use for data 

exchange. XML data are stored in plain 

text format that is both human-readable 

and machine-readable and provides for 

a software- and hardware-independent 

method of exchanging data over 

incompatible applications or systems 

over the internet. This definition 

includes any future upgrades, iterations, 

or releases of XML-based language. 

Data Exchange Standardization for 

ICON (§ 619.2) 

Proposed paragraph (a) designates 

XML as the data exchange standard for 

the real-time ICON applications. These 

applications are: Interstate Wages and 

Benefits Inquiries/Responses; 

Withdrawn/Invalid Claims; and State 

Identification Inquiry. These 

applications, used by States, are 

currently supported by ICON in realtime using two data exchange formats— 

Extended Binary Coded Decimal 

Interchange Code (EBCDIC) and Web 


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Services Description Language (WSDL), 

which is a XML-based language. As 

stated previously, the Department has 

selected this sub-set of the applications 

supported on ICON for applying a data 

exchange standards because they 

represent the applications which both 

ICON and States currently have capacity 

to implement. The Department will 

continue to consider ways to apply data 

exchange standards to the other ICON 

functions, but the technology solutions 

are currently not available. It may be 

over five years before these new 

technology solutions can be effectively 

applied in the ICON environment. 

Proposed paragraph (b) requires that 

all SWAs using real-time ICON 

applications conform to the XML data 

exchange standard no later than 

September 30, 2018. The rule provides 

that a SWA may request an extension of 

this deadline if it demonstrates that 

resources are not available to meet the 

requirements. The request must be 

submitted to the Administrator of the 

Office of Unemployment Insurance no 

later than 6 months before the deadline 

and the request will be approved or 

denied within 30 days. 

ICON is funded by a cooperative 

agreement between the Department and 

State of Maryland. The Maryland 

Department of Labor, Licensing and 

Regulation acts as the Department’s 

agent to contract with a vendor for the 

maintenance, support, and operations of 

ICON. Beginning in FY 2007, the 

Department facilitated and later 

provided funding for the conversion of 

data exchange formats from EBCDIC to 

WSDL. EBCDIC is a format specifically 

used for mainframes and is not an 

interoperable standard. However, the 

migration of SWAs from EBCDIC to 

WSDL is still in its infancy requiring 

ICON to support a dual environment 

(Web Services and Mainframe). 

A few SWAs currently are in the 

process of implementing some of the 

modernized, XML-based real-time 

applications in conjunction with their 

efforts to modernize their IT systems or 

replace outdated systems. The goal of 

this proposed section is to accelerate 

State adoption of XML-based real time 

applications in order to eventually 

eliminate the need for ICON to manage 

mainframe applications in addition to 

the XML-based applications. 

The Department will continue to 

support SWAs’ transition to modernized 

XML-based real-time ICON applications 

and expects that the proposed data 

exchange standard will accelerate 

SWAs’ adoption of the XML exchange 

standard. The development of a single 

environment will result in improved 

efficiencies and cost savings and allow 

the Department to more effectively 

manage the development of future data 

exchanges and maintenance of 

resources. 

Data Exchange Standardization for 

SIDES (§ 619.3) 

Proposed paragraph (a) designates 

XML as the data exchange standard for 

SIDES. Proposed paragraph (b) requires 

that this standard apply to any 

Federally-funded SIDES consortium, 

and any future agents of the Department 

providing vendor services for the 

development, maintenance, support and 

operations of the SIDES. Paragraph (c) 

designates XML as the data exchange 

standard to govern the reporting of 

information through the SIDES data 

exchange modules. Paragraph (d) 

denotes when the standard set in 

paragraph (c) becomes effective. 

SIDES uses Web services and the 

XML data format for the information 

exchange between the SWAs and 

employers. The Department is requiring 

that all SIDES exchanges (current and 

future), which are developed in whole 

or part with Department funds, continue 

to conform to the XML data exchange 

standard. Additionally, as States, 

employers, and TPAs chose to 

implement SIDES or new data exchange 

modules of SIDES, they must conform to 

this data exchange standard by 

application design. 

SIDES offers two options for 

implementation for SWAs and 

employers: SIDES web services, and 

SIDES E-Response. Both systems are 

designed to meet the unique needs of 

businesses, large and small. For 

employers with a limited number of UC 

claims, the SIDES E-Response Web site 

provides an easy and efficient way to 

respond to information requests from 

SWAs. For employers and TPAs that 

handle a large volume of UC claims 

information requests, SIDES web 

services provides an automated, 

computer-to-computer interface 

between employers’ and TPAs’ IT 

systems and SWA networks. 

Data Exchange Standardization for the 

UI Benefits and Tax Systems (§ 619.4) 

Proposed paragraph (a) designates 

XML as the data exchange standard for 

the real-time ICON applications and 

SIDES data exchange modules 

associated with major IT modernization 

projects to upgrade UI Benefits and Tax 

Systems by SWAs using Federal funds. 

This proposed standard would improve 

the interoperability of State, Federal, 

and employer systems that collect and 

exchange information for UI 

administrative purposes. Linking data 

between these systems at the State level 

will allow for better service delivery and 

faster eligibility determinations, and 

should facilitate program integrity 

efforts. 

Proposed paragraph (b) requires that, 

beginning on the effective date of this 

regulation, major IT modernization 

efforts funded by the Department must 

conform to the proposed XML data 

exchange standard for the 

implementation of the real-time ICON 

applications and the SIDES exchange 

modules. 

III. Administrative Information 

Executive Orders 12866 and 13563: 

Regulatory Planning and Review 

Executive Orders 12866 and 13563 

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). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. This rule 

has been designated a ‘‘significant 

regulatory action’’ because, although not 

economically significant under section 

3(f) of Executive Order 12866, it raises 

novel issues of law and policy. 

Therefore, the Department had the rule 

reviewed by OMB. 

The Department anticipates that the 

changes in this NPRM would have 

limited, if any, direct impact on 

employers above and beyond any 

impact that would occur in the absence 

of the proposed rule. There will be an 

impact on SWAs in adopting the realtime ICON applications, but this impact 

may be mitigated because many States 

are likely to modernize their IT 

operations in any event, which will 

require implementing these 

interoperable real-time applications. 

This proposed rule also would result in 

several benefits that are discussed 

below. The Department is requesting 

comment on the benefits and costs of 

these policies. 

1. Need for Regulation 

Section 2104(b) of the Middle Class 

Tax Relief and Job Creation Act of 2012; 

(Pub. L. 112–96) requires the 

Department to issue a rule establishing 

data exchange standards for certain 

information-sharing and reporting 

processes. The Department is issuing 

this NPRM to fulfill its responsibility 

under the Act. As discussed earlier in 

this notice, these standards will 


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improve the interoperability of certain 

State, Federal, and employer-operated 

systems that collect and exchange 

information for UI administrative 

purposes. 

2. Economic Analysis 

a. Baseline and Overview 

The baseline for the analysis reflects 

the conditions that exist (or that would 

exist) in the absence of a standard. 

Twenty-nine States already have 

implemented the SIDES Separation 

Information data exchange, and some 

have begun implementation of the 

SIDES Earning Verification exchanges 

with employers. Another 16 have agreed 

to implement SIDES. The Department 

has also provided funding for the 

development of other SIDES formats, 

including Benefit Charge Notices and 

Nonmonetary Determinations Exchange. 

Subject to the availability of funds, the 

Department intends to provide 

additional funding opportunities for 

States that have not yet committed to 

implementing SIDES. Existing SIDES 

formats were developed using an XMLbased interface, and thus, there will be 

no incremental cost or benefit to current 

users. Furthermore, while additional 

States may adopt SIDES in the future, 

this proposed rule would not require 

them to do so. With respect to ICON, 

seven SWAs are in the process of 

implementing modernized, XML-based 

real-time applications. These SWAs are 

adopting the XML-based real-time ICON 

applications due to the need for 

modernizing their IT systems to replace 

outdated systems. The Department 

estimates that all SWAs would 

transition to the XML-based real-time in 

about 10 years. However, this proposed 

rule will require the SWAs to accelerate 

the transition to the XML-based realtime applications by September 30, 

2018. A 6-year acceleration could 

increase the present value cost of the 

project by approximately 15-to-40 

percent (depending on the assumed 

discount rate and on how far in the 

future the acceleration occurs, e.g., from 

2024 to 2018). The Department also 

expects the conversion to the XMLbased real-time applications by all 

SWAs will be a significant step to 

consolidating ICON applications to a 

single environment and realizing cost 

savings in ICON operations. To facilitate 

this transition, subject to the availability 

of funds, the Department plans to 

provide funding opportunities for SWAs 

to modernize to using the real-time 

ICON applications. 

For the IT modernization of UI 

Benefits and Tax systems, the 

Department expects many SWAs to 

begin re-engineering their IT systems 

with modern technologies to replace 

existing systems that have ceased to 

function cost effectively, subject to the 

availability of resources and expected 

availability of Federal funding to 

support their migration to newer 

systems. 

b. Benefits 

As a result of the proposed rule, 

SWAs will adopt the XML standard as 

they implement the current and future 

data exchange modules of SIDES and 

adapt to XML-based real-time ICON 

applications, and will integrate these 

standards as they pursue overall 

modernization of their UI benefits and 

tax systems with Federal funds. The 

standardization of these systems is 

expected to result in a reduction in 

erroneous or fraudulent unemployment 

insurance payments. Economically, this 

reduction is properly classified as an 

economic ‘‘transfer’’ and consequently 

is discussed later (in Section d). 

The proposed rule will improve the 

interoperability of State, Federal, and 

employer systems that collect and 

enhance information for UI 

administrative purposes by: 

• Improving the efficiency and 

quality of the communications between 

SWAs and employers and/or their TPAs 

that are required to determine UC 

eligibility through the elimination of the 

need to create and mail hard copy 

documents; 

• Increasing accuracy and reducing 

errors (in both directions), thereby 

enhancing program integrity (i.e., 

transparency, consistency) and 

customer satisfaction (accuracy, 

flexibility); 

• Improving the timeliness of 

information transferred between States, 

employers, TPAs and Federal agencies; 

and 

• Helping large TPAs that serve 

employers in multiple States to train 

their employers in using uniform system 

interfaces, thereby improving efficiency, 

timeliness, and accuracy. 

As discussed above, there are tangible 

program administration efficiencies for 

SWAs and employers in the 

implementation of this standard. 

However, implementation of these 

systems is still in its infancy and 

currently the Department does not have 

adequate data to support a formal costbenefit analysis. 

c. Costs 

Costs to the Department 

SIDES and real-time ICON 

applications using XML and XML-based 

languages have already been developed 

and implemented (though not by all 

SWAs). Consequently, the Department 

does not anticipate incurring any 

significant incremental costs as a result 

of the proposed rule when it is 

finalized. Any future data exchanges 

planned for SIDES or for ICON will 

conform to the standard proposed. 

However, there is no dedicated funding 

stream associated with assisting States 

with their IT modernization efforts. On 

occasion, when the economy is 

expanding and workloads fall below 

levels funded by the budget, remaining 

funds have been made available to 

States to support automation projects. 

(The Department expects to provide 

some funding, if available, to SWAs to 

help implement this proposed rule 

when it is finalized, as discussed in 

Section d.) 

Costs to States 

SIDES uses an XML-based interface. 

SWAs, employers and TPAs will incur 

one-time costs for the implementation of 

SIDES. Once a SWA, employer or TPA 

has implemented SIDES, they 

automatically conform to the XML data 

exchange standard. Therefore, there is 

no incremental cost to users for the 

implementation of the XML standard. 

SIDES is designed to offer two options 

for employers and TPAs, depending on 

their size. Large employers and TPAs 

can implement a version of SIDES that 

requires them to program their own 

systems to enable the communication 

with the SIDES applications. Large 

employers have an incentive to do this 

because it creates efficiencies in their 

processing of requests for information 

from SWAs creating a cost savings. 

Smaller employers who do not have 

sufficient numbers of claims to warrant 

reprogramming their computers have 

access to a web-based SIDES option that 

is also more efficient that paper 

processing, which also creates 

efficiencies and cost savings. SWAs are 

the users of ICON. Employers do not use 

ICON and so do not incur any 

incremental costs related to ICON. 

d. Transfers 

As noted above, the Department 

estimates that the proposed rule when 

finalized will lead States to adopt the 

modernized XML-based real-time 

applications of ICON approximately 6 

years sooner than they would in the 

absence of the proposed rule. This 

accelerated use of the modernized ICON 

applications results in up to 6 years’ 

worth of improved performance with 

respect to erroneous or fraudulent 

unemployment insurance payments. 

This is properly referred to as an 

economic ‘‘transfer’’ from individual 


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6The Annual Report rate includes fraud, 

nonfraud recoverable overpayments, and nonfraud 

non-recoverable overpayments. All causes and 

responsible parties are included in this rate. 

7The Operational rate includes those 

overpayments that the States are reasonably 

expected to detect and establish for recovery—fraud 

and nonfraud recoverable overpayments, excluding 

work search, employment service registration, base 

period wage issues and miscellaneous causes, such 

as benefits paid during a period of disqualification, 

redeterminations, and back pay awards. 

recipients of payments to the States. The 

Department has estimated the total UC 

overpayments in 2011 alone to be $13 

billion (Annual Report Rate 6) and 

overpayments that SWAs should be 

expected to detect and establish for 

recovery to be $7 billion (Operational 

Rate 7) (http://oui.doleta.gov/unemploy/ 

improp_payrate.asp#). Therefore, any 

actions that reasonably can be expected 

to reduce the rate of erroneous or 

fraudulent payments, such as the 

expanded use of SIDES, which is 

expected to result from this proposed 

rule, could lead to a significant dollarvalue reduction in UC payments. 

In addition, subject to availability, the 

Department expects to provide 

supplemental funding opportunities to 

States to support implementation of the 

data exchange standards required by the 

rule when it is finalized. 

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). 

While this NPRM is not imposing new 

information collections, §§ 619.2–619.4 

would impose formatting requirements 

for the data exchanges of various UI 

applications that may impose a burden 

under the PRA. 

The Department is filing an 

Information Collection Request with 

OMB to support the format changes. 

SIDES and ICON were developed by and 

for the use of the States through 

collaboration with States and NASWA, 

and with funding from the Department. 

SIDES interfaces have been designed 

using XML and the States and 

employers participating in SIDES 

automatically comply with the data 

exchange standard proposed. Therefore, 

there is no additional cost burden for 

SIDES due to this proposed regulation. 

However, for States currently using the 

EBCDIC format for ICON, there may be 

costs incurred to comply with this 

proposed regulation. The explanation of 

substantive provisions regarding these 

data exchange standards for information 

sharing can be found in the preamble 

discussion of §§ 619.2–619.4 of this 

proposed rule. 

The Department estimates that the 

one-time added burden for States to 

conform to the new data exchange 

standards for ICON will be minimal. 

States differ considerably in terms of 

hardware platforms and software used 

to develop their ICON applications. 

Additionally, the Department estimates 

that some States may use in-house IT 

staff while others may contract with IT 

vendors to implement the proposed data 

exchange standard. The estimated costs 

associated with this burden, includes 

assessing current system status, 

planning and implementation of 

changes, and any necessary hardware 

and software needed to implement the 

proposed data exchange standard for the 

real-time ICON applications. 

The burden for the information 

collection exchange can be summarized 

as follows: 

Agency: DOL–ETA. 

Title of Collection: Federal-State 

Unemployment Insurance Program Data 

Exchange Standardization. 

OMB ICR Reference Number Control 

Number: 201302–1205–003. 

Affected Public: State Governments. 

Total Estimated Number of 

Respondents: 53. 

Total Estimated Number of 

Responses: 53. 

Total Estimated Annual Burden 

Hours: 6,360. 

Total Estimated Annual Other Costs 

Burden: $1,057,329. 

Executive Order 13132: Federalism 

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 

proposed regulation is specifically 

required by the Middle Class Tax Relief 

and Job Creation Act of 2012. 

The proposed rule does not have a 

substantial direct effect on the current 

nature of 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. The 

Department is exercising its existing 

authority to interpret Federal statutes 

with regard to States’ administration of 

UI programs. In the Federal-State UI 

system, States have a great deal of 

flexibility to design their UC laws and 

operations as long as they comply with 

the broad Federal requirements in 

FUTA and the SSA. This regulation 

implements a new statutory requirement 

for a uniform data exchange and 

reporting standard and thus is no 

different from other UC regulations that 

interpret Federal law with regard to 

State requirements. It simply sets a new 

standard for data exchanges of 

information used in the administration 

of the UI program under Title III of the 

SSA. The Department consulted with 

the National Association of State 

Workforce Agencies’ (NASWA) 

Information Technology Support Center 

(ITSC) and NASWA’s UI Committee to 

discuss the impacts of this enactment 

and identify State application interfaces 

which will benefit by the 

implementation of the XML data 

exchange standard. NASWA agreed 

with the Department’s approach to 

implement uniform data exchange 

standards in areas already identified as 

valuable to the UI system and for 

applications developed collaboratively 

with the States. 

Unfunded Mandates Reform Act of 

1995 

This regulatory action has been 

reviewed in accordance with the 

Unfunded Mandates Reform Act of 

1995. Under the 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 

rule does not include any Federal 

mandate that may result in increased 


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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. Most if not all 

of the costs of implementing this 

regulation will be covered by Federal 

funding. 

Plain Language 

The Department drafted this proposed 

rule in plain language. 

Effect on Family Life 

The Department certifies that this 

proposed rule has been assessed under 

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. This 

provision will not adversely affect the 

well-being of the nation’s families. 

Therefore, the Department certifies that 

this rule does not adversely impact 

family well-being as discussed under 

section 654 of the Treasury and General 

Government Appropriations Act of 

1999. 

Regulatory Flexibility Act/Small 

Business Regulatory Enforcement 

Fairness Act 

We have notified the Chief Counsel 

for Advocacy, Small Business 

Administration, and made the 

certification according to the Regulatory 

Flexibility Act (RFA) at 5 U.S.C. 605(b), 

that this NPRM will not have a 

significant economic impact on a 

substantial number of small entities. 

Under the RFA, no regulatory flexibility 

analysis is required where the rule ‘‘will 

not * * * have a significant economic 

impact on a substantial number of small 

entities.’’ 5 U.S.C. 605(b). A small entity 

is defined as a small business, small 

not-for-profit organization, or small 

governmental jurisdiction. 5 U.S.C. 

601(3)–(5). 

This proposed rule establishes a data 

exchange standard that would be used 

in SIDES and ICON. ICON is used only 

by States and Federal entities, neither of 

which qualifies as small entities under 

the RFA. SIDES, however, is used by 

States and by employers, including 

TPAs, in the private sector. However, 

because SIDES already uses an XMLbased interface, there is no incremental 

cost to current users. Furthermore, 

while additional employers and TPAs 

may adopt SIDES in the future, the rule 

would not require them to do so, nor 

would the rule affect their costs if they 

did. Consequently, the rule will not 

have a significant economic impact on 

a substantial number of small entities, 

and a Regulatory Flexibility Analysis is 

not required under the RFA. 

In addition, this rule does not require 

review by the Congress under the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 because it will not 

result in (1) an annual effect on the 

economy of $100,000,000 or more; (2) a 

major increase in costs or prices for 

consumers, individual industries, 

Federal, State, or local government 

agencies, or geographic regions; or (3) 

significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or on the 

ability of United States-based 

enterprises to compete with foreignbased enterprises in domestic and 

export markets. 

As discussed above, the most 

significant effect of the rule will be to 

accelerate action (e.g., the adoption of 

the real-time XML-based ICON 

applications) that the Department 

expects to occur even in the absence of 

the proposed rule. The noteworthy cost 

of the proposed rule is the cost of this 

acceleration. That is, the rule would 

change the timing—and therefore the 

present value—of nominal costs that 

would have been incurred even in the 

absence of the rule. These costs will be 

borne by the State and Federal 

governments, not by small entities. 

List of Subjects in 20 CFR Part 619 

Employment and Training 

Administration, Labor, and 

Unemployment Compensation. 

For the reasons stated in the 

preamble, the Department proposes to 

amend 20 CFR chapter V by adding part 

619 as set forth below: 

PART 619—UNEMPLOYMENT 

COMPENSATION DATA EXCHANGE 

STANDARDIZATION FOR IMPROVED 

INTEROPERABILITY 

Sec. 

619.1 Definitions. 

619.2 Data exchange standardization for 

ICON. 

619.3 Data exchange standardization for 

SIDES. 

619.4 Data exchange standardization for the 

UI Benefits and Tax Systems. 

Authority: 42 U.S.C. 1111; Section 2104(b) 

of Pub. L. 112–96; 42 U.S.C. 1302(a). 

§ 619.1 Definitions. 

As used in this part— 

Administrator of the Office of 

Unemployment Insurance means the 

Department’s Employment and Training 

Administration’s chief administrative 

officer directly responsible for the 

operation of the Unemployment 

Insurance (UI) program and oversight of 

the Unemployment Compensation (UC) 

program and UC laws. 

Department means the United States 

Department of Labor. 

Extensible Markup Language or XML 

means a markup language that defines a 

set of rules for encoding documents in 

a format designed to structure, store and 

transport data between applications or 

systems over the Internet. This term 

includes any future upgrades, iterations, 

or releases of XML-based language. 

Federal funds or Federally-funded 

means funds that include, but are not 

limited to: 

(1) Supplemental budget funds that 

are designated by the Department for 

State IT modernization efforts; 

(2) General State UI administration 

funding for State program operations (an 

administrative grant issued by the 

Department at the beginning of each 

fiscal year); and 

(3) Special UI funding distributions. 

Interstate Connection Network or 

ICON means a secure multi-purpose 

telecommunications network that 

supports the transfer of data among the 

SWAs. 

Interstate Wages and Benefits 

Inquiries/Responses means the ICON 

application which supports online 

transmission of interstate wages and 

benefits inquiries and responses 

between SWAs. 

Major IT Modernization Project means 

conversion, re-engineering, rewriting, or 

transferring of an existing system to a 

modernized framework such as 

transferring a process from mainframe 

operations to web-based operations, 

converting to modern computer 

programming languages, or upgrading 

software libraries, protocols, or 

hardware platform and infrastructure. 

These are projects to upgrade UI 

Benefits and Tax Systems by SWAs 

using Federal funds. 

National Association of State 

Workforce Agencies or NASWA means 

the organization of State administrators 

of unemployment insurance laws 

(SWAs), employment services, training 

programs, employment statistics and 

labor market information and other 

programs and services provided through 

the publicly-funded State workforce 

system, or its successor organization. 

State or States refers to, individually 

or collectively, the 50 States of the 

United States of America, the District of 

Columbia, the Commonwealth of Puerto 

Rico, and the United States Virgin 

Islands. 

State Identification Inquiry means the 

ICON application which allows SWAs 

to inquire about wages reported to other 

SWAs by Social Security Number. 


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12664 Federal Register / Vol. 78, No. 37 / Monday, February 25, 2013 / Proposed Rules 

State Information Data Exchange 

System or SIDES means an automated 

response system used by SWAs to 

collect claim-related information from 

employers and third-party 

administrators. 

State unemployment compensation 

law or UC law means the law of a State 

approved under Section 3304(a) of the 

Internal Revenue Code of 1986 (26 

U.S.C. 3304(a)). 

State Workforce Agency or SWA 

means the agency of the State charged 

with the administration of the State’s 

Unemployment Compensation (UC) law. 

Unemployment compensation or UC 

means cash benefits payable to 

individuals with respect to their 

unemployment, as defined in 26 U.S.C. 

3306(h). 

Unemployment Insurance or UI 

means the Federal-State system and 

operations administering and 

implementing UC law. 

Withdrawn/Invalid Claims means the 

ICON application which allows for the 

posting and viewing of withdrawn or 

invalid claim information for SWAs. 

§ 619.2 Data exchange standardization for 

ICON. 

(a) XML is the data exchange standard 

for the real-time ICON applications. 

These applications are: Interstate Wages 

and Benefits Inquiries/Responses; 

Withdrawn/Invalid Claims; and State 

Identification Inquiry. 

(b) All SWAs using real-time ICON 

applications must comply with this 

XML data exchange standard no later 

than September 30, 2018. A SWA may 

request an extension of this deadline if 

it demonstrates that resources are not 

available to meet this requirement. 

These requests must be submitted in 

writing to the Administrator of the 

Office of Unemployment Insurance no 

later than 6 months before the deadline; 

requests will be approved or denied 

within 30 days. 

§ 619.3 Data exchange standardization for 

SIDES. 

(a) XML is the data exchange standard 

for SIDES. 

(b) This standard applies to any 

Federally-funded SIDES consortium, 

and any future agents of the Department 

providing vendor services for the 

development, maintenance, support, 

and operations of the SIDES, and for any 

State that adopts SIDES. A SIDES 

consortium involves a group of two or 

more States jointly establishing a project 

team to oversee the design, 

development, and implementation of a 

new SIDES data exchange module. As 

States implement SIDES or new data 

exchange modules of SIDES, they must 

conform to this data exchange standard 

by application design. 

(c) XML is designated as the data 

exchange standard to govern the 

reporting of information through SIDES 

data exchange modules. The regulation 

applies to current SIDES data exchange 

modules and any future SIDES data 

exchange modules developed with 

Federal funds. 

(d) The standard designated in 

paragraphs (a), (b), and (c) of this 

section is effective [date 30 days after 

publication of the Final Rule in the 

Federal Register]. 

§ 619.4 Data exchange standardization for 

the UI Benefits and Tax Systems. 

(a) XML is the data exchange standard 

for the real time ICON applications set 

out in § 619.2 and for the SIDES 

exchanges set out in § 619.3 associated 

with major IT modernization projects, to 

upgrade UI Benefits and Tax Systems by 

SWAs using Federal funds. 

(b) The standard designated in 

paragraph (a) of this section is effective 

[date 30 days after publication of the 

Final Rule in the Federal Register]. 

Signed at Washington, DC, this 20th day of 

February, 2013. 

Jane Oates, 

Assistant Secretary, Employment and 

Training Administration, Labor. 

[FR Doc. 2013–04332 Filed 2–22–13; 8:45 am] 

BILLING CODE 4510–FN–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Parts 807, 812, and 814 

[Docket No. FDA–2013–N–0080] 

RIN 0910–AG48 

Human Subject Protection; 

Acceptance of Data From Clinical 

Studies for Medical Devices 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Proposed rule. 

SUMMARY: The Food and Drug 

Administration (FDA) is proposing to 

amend its regulations on acceptance of 

data from clinical studies for medical 

devices. We are proposing to require 

that clinical studies conducted outside 

the United States as support for an 

investigational device exemption (IDE) 

application, a premarket notification 

(510(k)) submission, a premarket 

approval (PMA) application, a product 

development protocol (PDP) 

application, or a humanitarian device 

exemption (HDE) application be 

conducted in accordance with good 

clinical practice (GCP), which includes 

obtaining and documenting the review 

and approval of the study by an 

independent ethics committee (IEC) and 

obtaining and documenting freely given 

informed consent of study subjects. The 

proposed rule is intended to update the 

standards for FDA acceptance of data 

from clinical studies conducted outside 

the United States and to help ensure the 

protection of human subjects and the 

quality and integrity of data obtained 

from these studies. As part of this 

proposed rule, we are also proposing to 

amend the IDE and 510(k) regulations to 

address the requirements for FDA 

acceptance of data from clinical studies 

conducted inside the United States. The 

proposed amendments are intended to 

provide consistency in FDA 

requirements for acceptance of clinical 

data, whatever the application or 

submission type. 

DATES: Submit either electronic or 

written comments on the proposed rule 

by May 28, 2013. See section VIII of this 

document for the proposed effective 

date of a final rule based on this 

proposed rule. Submit comments on 

information collection issues under the 

Paperwork Reduction Act of 1995 by 

March 27, 2013, (see the ‘‘Paperwork 

Reduction Act of 1995’’ section of this 

document). 

ADDRESSES: You may submit comments, 

identified by Docket No. FDA–2013–N– 

0080 and/or Regulatory Information 

Number (RIN) number 0910–AG48, by 

any of the following methods, except 

that comments on information 

collection issues under the Paperwork 

Reduction Act of 1995 (the PRA) must 

be submitted to the Office of 

Information and Regulatory Affairs, 

Office of Management and Budget 

(OMB) (see the ‘‘Paperwork Reduction 

Act of 1995’’ section of this document): 

Electronic Submissions 

Submit electronic comments in the 

following way: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Written Submissions 

Submit written submissions in the 

following way: 

• Mail/Hand delivery/Courier (for 

paper or CD–ROM submissions): 

Division of Dockets Management (HFA– 

305), Food and Drug Administration, 

5630 Fishers Lane, Rm. 1061, Rockville, 

MD 20852. 

Instructions: All submissions received 

must include the Agency name and 


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