SUPPLEMENTARY INFORMATION:

The Department is announcing WIOA allotments for PY 2023 for Youth Activities, Adults and Dislocated Worker Activities, Wagner-Peyser Act PY 2023 allotments, and PY 2023 Workforce Information Grant allotments. This notice provides information on the amount of funds available during PY 2023 to states with an approved WIOA Combined or Unified State Plan, and information regarding allotments to the Outlying Areas.

WIOA allotments for states and the state allotments for the Wagner-Peyser Act are based on formulas defined in their respective statutes. WIOA requires allotments for the Outlying Areas to be competitively awarded rather than based on a formula determined by the Secretary of Labor (Secretary) as occurred under the Workforce Investment Act (WIA). However, for PY 2023, the Consolidated Appropriations Act, 2023 waives the competition requirement, and the Secretary is using the discretionary formula rationale and methodology for allocating PY 2023 funds for the Outlying Areas (American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the Republic of Palau, and the United States Virgin Islands) that was published in the Federal Register at 65 FR 8236 (Feb. 17, 2000). WIOA specifically included the Republic of Palau as an Outlying Area, except during any period for which the Secretary of Labor and the Secretary of Education determine that a Compact of Free Association is in effect and contains provisions for training and education assistance prohibiting the assistance provided under WIOA; no such determinations prohibiting assistance have been made. The formula that the Department of Labor (Department) used for PY 2023 is the same formula used in PY 2022 and is described in the section on Youth Activities program allotments. The Department invites comments only on ( printed page 24631) the formula used to allot funds to the Outlying Areas.

On December 29, 2022, the Consolidated Appropriations Act, 2023, Public Law 117-328 was signed into law (“the Act”). The Act, division H, title I, sections 106(b) and 107 of the Act allows the Secretary of Labor (Secretary) to set aside up to 0.5 percent of each discretionary appropriation for activities related to program integrity and 0.75 percent of most operating funds for evaluations. For 2023, as authorized by the Act, the Department has set aside $10,408,000 of the Training and Employment Services (TES) and $2,556,500 of the State Unemployment Insurance and Employment Services Operations (SUIESO) appropriations impacted in this FRN for these activities. ETA reserved these funds from the WIOA Adult, Youth, Dislocated Worker, Wagner-Peyser Act Employment Service, and Workforce Information Grant program budgets. Any funds not utilized for these reserve activities will be provided to the states. We also have attached tables listing the PY 2023 allotments for programs under WIOA title I Youth Activities (table A), Adult and Dislocated Workers Employment and Training Activities (tables B and C, respectively), and the PY 2023 Wagner-Peyser Act allotments (table D). We also have attached the PY 2023 Workforce Information Grant table (table E) and the total WIOA Youth, Adult and Dislocated Worker funding for Outlying Areas (table F).

Youth Activities Allotments. The appropriated level for PY 2023 for WIOA Youth Activities totals $948,130,000. After reducing the appropriation by $3,629,000 for set asides authorized by the Act, $944,501,000 is available for Youth Activities. Table A includes a breakdown of the Youth Activities program allotments for PY 2023 and provides a comparison of these allotments to PY 2022 Youth Activities allotments for all States and Outlying Areas. The WIOA Youth formula has a section in WIOA for a reservation for Migrant and Seasonal Farmworker (MSFW) Youth if the appropriation exceeds $925,000,000. Per WIOA 127(a)(1), ETA reserved 4 percent ($925,200) of the excess amount for MSFW Youth. For the Native American Youth program, the total amount available is 1.5 percent of the total amount for Youth Activities (after set asides authorized by the Act) after the MSFW Youth reservation (in accordance with WIOA section 127). The total funding available for the Outlying Areas was reserved at 0.25 percent of the amount appropriated for Youth Activities (after set asides authorized by the Act) after the amount reserved for MSFW Youth and Native American Youth (in accordance with WIOA section 127(b)(1)(B)(i)). On December 17, 2003, Public Law 108-188, the Compact of Free Association Amendments Act of 2003 (“the Compact”), was signed into law. The Compact specified that the Republic of Palau remained eligible for WIA title I funding. See 48 U.S.C. 1921d(f)(1)(B)(ix). WIOA sec. 512(g)(1) updated the Compact to refer to WIOA funding. The National Defense Authorization Act for Fiscal Year 2018 (division A, title XII, subtitle F, section 1259C(c) of Pub. L. 115-91) authorized WIOA title I funding to Palau through FY 2024.

Under WIA, the Secretary had discretion for determining the methodology for distributing funds to all Outlying Areas. Under WIOA the Secretary must award the funds through a competitive process. However, for PY 2023, the Consolidated Appropriations Act, 2023 waives the competition requirement regarding funding to Outlying Areas ( e.g., American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the Republic of Palau, and the United States Virgin Islands). For PY 2023, the Department used the same methodology used since PY 2000 ( i.e., we distribute funds among the Outlying Areas by formula based on relative share of the number of unemployed, a minimum of 90 percent of the prior year allotment percentage, a $75,000 minimum, and a 130 percent stop gain of the prior year share). For the relative share calculation in PY 2023, the Department used updated data obtained from the 2020 Census for American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the United States Virgin Islands. For the Republic of Palau, the Department used updated data from Palau's 2020 Census. The 2020 Island Areas Censuses (IAC) operation was impacted by the COVID-19 pandemic. While the enumeration was successful, the COVID-19 pandemic impacted the quality of the detailed social, economic, and housing characteristic data for American Samoa, Guam, and the U.S. Virgin Islands. Guidance is available at www2.census.gov/​programs-surveys/​decennial/​2020/​technical-documentation/​island-areas-tech-docs/​2020-iac-guidance.pdf. Palau's data was obtained from the 2021 Statistical Yearbook of the Republic of Palau available at www.palaugov.pw/​wp-content/​uploads/​2022/​07/​2021-Statistical-Yearbook.pdf. The Department will accept comments on this methodology. The Act additionally allows Outlying Areas to submit a single application according to the requirements established by the Secretary for a consolidated grant for Adult, Youth, and Dislocated Worker funds. Subject to approval of the grant application and other reporting requirements of the Secretary, the Act allows Outlying Areas receiving a consolidated grant to use those funds interchangeably between Adult, Youth, and Dislocated Worker programs or activities. Table F includes the total Youth, Adult and Dislocated Worker funding for Outlying Areas.

After the Department calculated the amount for the MSFW Youth, Outlying Areas and the Native American program, the amount available for PY 2023 allotments to the states is $927,098,608. This total amount is below the required $1 billion threshold specified in WIOA sec. 127(b)(1)(C)(iv)(IV); therefore, the Department did not apply the WIOA additional minimum provisions. Instead, as required by WIOA, the minimums of 90 percent of the prior year allotment percentage and 0.25 percent state minimum floor apply. WIOA also provides that no state may receive an allotment that is more than 130 percent of the allotment percentage for the state for the previous year. The three data factors required by WIOA sec. 127(b)(1)(C)(ii) for the PY 2023 Youth Activities state formula allotments are, summarized slightly, as follows:

(1) The average number of unemployed individuals in Areas of Substantial Unemployment (ASUs) for the 12-month period, July 2021-June 2022 in each state compared to the total number of unemployed individuals in ASUs in all states;

(2) Number of excess unemployed individuals or excess unemployed individuals in ASUs (depending on which is higher) averages for the same 12-month period used for ASU unemployed data compared to the total excess unemployed individuals or ASU excess number in all states; and

(3) Number of disadvantaged youth (age 16 to 21, excluding college students not in the workforce and military) from special tabulations of data from the American Community Survey (ACS), which the Department obtained from the Census Bureau in each state compared to the total number of disadvantaged youth in all states. ETA obtained updated data for use in PY 2023. The Census Bureau collected the data used in the special tabulations for disadvantaged youth between January 1, 2016-December 31, 2020.

For purposes of identifying ASUs for the Youth Activities allotment formula, the Department continued to use the data made available by BLS (as ( printed page 24632) described in the Local Area Unemployment Statistics (LAUS) Technical Memorandum No. S-22-13). For purposes of determining the number of disadvantaged youth, the Department used the special tabulations of ACS data available at: www.dol.gov/​agencies/​eta/​budget/​formula/​disadvantagedyouthadults.

ETA obtained updated data for use in PY 2023 and will publish this information in a forthcoming TEGL.

Adult Employment and Training Activities Allotments. The total appropriated funds for Adult Activities in PY 2023 is $885,649,000. After reducing the appropriated amount by $2,724,000 for set asides authorized by the Act, $882,925,000 remains for Adult Activities, of which $880,717,687 is for states and $2,207,313 is for Outlying Areas. Table B shows the PY 2023 Adult Employment and Training Activities allotments and a state-by-state comparison of the PY 2023 allotments to PY 2022 allotments.

In accordance with WIOA, the Department reserved the total available for the Outlying Areas at 0.25 percent of the full amount appropriated for Adult Activities (after set asides authorized by the Act). As discussed in the Youth Activities section above, in PY 2023 the Department will distribute the Adult Activities funding for the Outlying Areas, using the same principles, formula, and data as used for outlying areas for Youth Activities. The Department will accept comments on this methodology. After determining the amount for the Outlying Areas, the Department used the statutory formula to distribute the remaining amount available for allotments to the states. The Department did not apply the WIOA minimum provisions for the PY 2023 allotments because the total amount available for the states was below the $960 million threshold required for Adult Activities in WIOA sec. 132(b)(1)(B)(iv)(IV). Instead, as required by WIOA, the minimums of 90 percent of the prior year allotment percentage and 0.25 percent state minimum floor apply. WIOA also provides that no state may receive an allotment that is more than 130 percent of the allotment percentage for the state for the previous year. The three formula data factors for the Adult Activities program are the same as those used for the Youth Activities formula, except the Department used data for the number of disadvantaged adults (age 22 to 72, excluding college students not in the workforce and military).

Dislocated Worker Employment and Training Activities Allotments. The amount appropriated for Dislocated Worker activities in PY 2023 totals $1,421,412,000. The total appropriation includes formula funds for the states, while the National Reserve is used for National Dislocated Worker Grants, technical assistance and training, demonstration projects, Workforce Opportunity for Rural Communities, Community College Grants, and the Outlying Areas' Dislocated Worker allotments. After reducing the appropriated amount by $4,055,000 for set asides authorized by the Act, a total of $1,417,357,000 remains available for Dislocated Worker activities. The amount available for Outlying Areas is $3,543,393, leaving $321,550,607 for the National Reserve and a total of $1,092,263,000 available for states. Table C shows the PY 2023 Dislocated Worker activities allotments and a state-by-state comparison of the PY 2023 allotments to PY 2022 allotments.

Similar to the Adult Activities program, the Department reserved the total available for the Outlying Areas at 0.25 percent of the full amount appropriated for Dislocated Worker Activities (after set asides authorized by the Act). Similar to Youth and Adult funds, instead of competition, in PY 2023 the Department will use the same pro rata share as the areas received for the PY 2023 WIOA Adult Activities program to distribute the Outlying Areas' Dislocated Worker funds, the same methodology used in PY 2022. The Department will accept comments on this methodology.

The three data factors required in WIOA sec. 132(b)(2)(B)(ii) for the PY 2023 Dislocated Worker state formula allotments are, summarized slightly, as follows:

(1) Relative number of unemployed individuals in each state, compared to the total number of unemployed individuals in all states, for the 12-month period, October 2021-September 2022;

(2) Relative number of excess unemployed individuals in each state, compared to the total excess number of unemployed individuals in all states, for the 12-month period, October 2021-September 2022; and

(3) Relative number of long-term unemployed individuals in each state, compared to the total number of long-term unemployed individuals in all states, for the 12-month period, October 2021-September 2022.

In PY 2023, under WIOA the Dislocated Worker formula uses minimum and maximum provisions. No state may receive an allotment that is less than 90 percent of the state's prior year allotment percentage (stop loss) or more than 130 percent of the state's prior year allotment percentage (stop gain).

Wagner-Peyser Act ES Allotments. The appropriated level for PY 2023 for ES grants totals $680,052,000. After reducing the appropriated amount by $2,520,500 for set asides authorized by the Act, $677,531,500 is available for ES grants. After determining the funding for Guam and the United States Virgin Islands, the Department calculated allotments to states using the formula set forth at section 6 of the Wagner-Peyser Act (29 U.S.C. 49e). The Department based PY 2023 formula allotments on each state's share of calendar year 2022 monthly averages of the civilian labor force (CLF) and unemployment. Section 6(b)(4) of the Wagner-Peyser Act requires the Secretary to set aside up to three percent of the total funds available for ES to ensure that each state will have sufficient resources to maintain statewide ES activities. In accordance with this provision, the Department included the three percent set aside funds in this total allotment. The Department distributed the set-aside funds in two steps to states that have experienced a reduction in their relative share of the total resources available this year from their relative share of the total resources available 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. ETA calculated the median CLF density based on CLF data provided by the BLS for calendar year 2022. The Department distributed all remaining set-aside funds on a pro-rata basis in Step 2 to all other states experiencing reductions in relative share from the prior year but not meeting the size and density criteria for Step 1. The distribution of ES funds (table D) includes $675,879,914 for states, as well as $1,651,586 for Outlying Areas.

Section 7(a) of the Wagner-Peyser Act (49 U.S.C. 49f(a)) authorizes states to use 90 percent of funds allotted to a state for labor exchange services and other career services such as job search and placement services to job seekers; appropriate recruitment services for employers; program evaluations; developing and providing labor market and occupational information; developing management information systems; and administering the work test for unemployment insurance claimants. Section 7(b) of the Wagner-Peyser Act states that 10 percent of the total sums allotted to each state must be reserved for use by the Governor to provide performance incentives for ( printed page 24633) public ES offices and programs, provide services for groups with special needs, and to provide for the extra costs of exemplary models for delivering services of the type described in section 7(a) and models for enhancing professional development and career advancement opportunities of state agency staff.

To provide services such as outreach to MSFWs, State Monitor Advocate (SMA) responsibilities, and others, State Workforce Agencies, (SWAs) must use Wagner-Peyser Act ES funding to provide employment services to migrant and seasonal farmworkers (MSFW), which are described at 20 CFR 651, 653, 654, and 658.

Workforce Information Grants Allotments. Total PY 2023 funding for Workforce Information Grants allotments to states is $32,000,000. After reducing the total by $36,000 for set asides authorized by the Act, $31,964,000 is available for Workforce Information Grants. Table E contains the allotment figures for each state and Outlying Area. The Department distributes the funds by administrative formula, with a reserve of $176,714 for Guam and the United States Virgin Islands. Guam and the United States Virgin Islands allotment amounts are partially based on CLF data, which the Department updated this year with data from the 2020 Census. The Department distributes the remaining funds to the states with 40 percent distributed equally to all states and 60 percent distributed based on each state's share of CLF for the 12 months ending September 2022.

88 FR 24630