[Federal Register: March 6, 2003 (Volume 68, Number 44)]
[Rules and Regulations]
[Page 10931-10937]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06mr03-17]
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Part IX
Department of Labor
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Employment and Training Administration
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20 CFR Part 625
Disaster Unemployment Assistance Program; Final Rule
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DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Part 625
RIN: 1205-AB31
Disaster Unemployment Assistance Program
AGENCY: Employment and Training Administration, Department of Labor.
ACTION: Final rule.
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SUMMARY: The Employment and Training Administration (ETA) of the
Department of Labor (Department) is issuing this final rule to clarify
eligibility for disaster unemployment assistance (DUA) in the wake of
the major disasters declared as a result of the terrorist attacks of
September 11, 2001. The Department undertook emergency rulemaking and
published an interim final rule on November 13, 2001, that was
effective upon publication and which included a post-publication
comment period to provide an opportunity for public participation in
this rulemaking. This final rule takes into account the comments that
were received.
DATES: The interim rule is adopted as final, effective March 6, 2003,
except for amendments to Sec. Sec. 625.5(c)(2) and (c)(3) which will
be effective April 7, 2003.
FOR FURTHER INFORMATION CONTACT: Betty Castillo, Division Chief,
Division of Unemployment Insurance Operations, Office of Workforce
Security, Employment and Training Administration (ETA), U.S. Department
of Labor, 200 Constitution Avenue, NW., Room S-4231, Washington, DC
20210. Telephone: (202) 693-3209 (this is not a toll-free number);
facsimile: (202) 693-3229; e-mail: bcastillo@doleta.gov.
SUPPLEMENTARY INFORMATION:
I. The Disaster Unemployment Assistance Program
Section 410(a) of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (Stafford Act) (42 U.S.C. 5177(a)) sets forth
the framework of the Disaster Unemployment Assistance (DUA) Program.
The President is authorized by section 410(a) of the Stafford Act to
provide to any individual who is unemployed as a result of a major
disaster declared by the President under the Stafford Act ``such
benefit assistance as he deems appropriate while such individual is
unemployed for the weeks of such unemployment with respect to which the
individual is not entitled to any other unemployment compensation . . .
or waiting period credit.'' Section 410(a) provides that DUA is to be
furnished to individuals for no longer than 26 weeks after the major
disaster is declared. (Pub. L. 107-154 amended section 410(a) of the
Stafford Act to extend to 39 weeks the availability of assistance to
individuals unemployed as a result of the terrorist attacks of
September 11, 2001.) Furthermore, for any week of unemployment, a DUA
payment (a type of unemployment compensation (UC)) is not to exceed the
maximum weekly benefit amount authorized under the applicable state UC
law, as specified in the Department's DUA regulations implementing
section 410(a) of the Act.
The Department operates the DUA program under a delegation of
authority (51 FR 4988, February 10, 1986) to the Secretary of Labor
from the Director of the Federal Emergency Management Agency (FEMA).
The Secretary of Labor has promulgated and published regulations for
the DUA program at part 625 of title 20 of the Code of Federal
Regulations. The DUA Program is administered by the states in
accordance with an agreement each state has signed with the Secretary
of Labor.
II. Explanation of the Interim Final Rule
On November 13, 2001 (66 FR 56960), the Department added, at Sec.
625.5(c), a definition of the phrase ``unemployment is a direct result
of the major disaster,'' used in Sec. 625.5(a)(1) and (b)(1) for
determining whether a worker's or self-employed individual's
unemployment is caused by a major disaster. Section 410(a) of the
Stafford Act provides, in pertinent part, that the President is
authorized to provide benefit assistance to any individual ``unemployed
as a result of a major disaster.'' The Department has consistently
interpreted this phrase in its regulations as requiring, for DUA
eligibility, that the individual's ``unemployment is a direct result of
the major disaster.'' However, that phrase had never been defined in
the Department's regulations. (Note that paragraphs (a)(2)-(a)(5) and
(b)(2)-(b)(4) of Sec. 625.5 also provide for other circumstances where
an individual's unemployment is caused by a major disaster. However,
these provisions are not relevant here.)
The terrorist attacks of September 11, 2001, resulting in
declarations of major disasters in New York City and Arlington County,
Virginia, were of catastrophic proportions. They presented a number of
situations the regulations did not contemplate, such as the extended
closure of Reagan National Airport. In order to address these types of
situations, the Department defined the phrase ``unemployment is a
direct result of the major disaster'' to clarify eligibility. By
defining the phrase ``unemployment is a direct result of the major
disaster,'' the Department ensured greater uniformity in applying the
standard. This is consistent with the first and second rules of
construction of Sec. 625.1(b) and (c) of the DUA regulations, which
provide that sections 410 and 423 of the Stafford Act and the
implementing regulations must be construed liberally to carry out the
purposes of the Act and to assure, insofar as possible, the uniform
interpretation and application of the DUA provisions of the Act
throughout the United States.
Definition of ``Unemployment Is a Direct Result of the Major Disaster''
In the interim final rule, the Department interpreted the phrase
``unemployment is a direct result of the major disaster'' under
paragraphs (a)(1) and (b)(1) of Sec. 625.5 to mean that an
individual's unemployment must be an immediate result of the disaster
itself, and not the result of a longer chain of events precipitated or
exacerbated by the major disaster. This rule also clarified that an
individual's unemployment is a direct result of the major disaster if
the unemployment resulted from: the physical damage or destruction of
the work site; the physical inaccessibility of the work site due to a
federal government closure of the work site, in immediate response to
the major disaster; or lack of work, or loss of revenues, provided that
the employer, or the business in the case of a self-employed
individual, prior to the disaster, received at least a majority of its
revenue or income from either an entity damaged or destroyed in the
disaster, or an entity closed by the federal government in immediate
response to the disaster. This rule simply sets forth a definition for
determining whose unemployment is a direct result of a major disaster.
In the preamble discussion of the interim final rule, the
Department recognized that the terrorist attacks of September 11 had a
``ripple effect'' throughout the economy, and that many businesses
nationwide suffered serious declines due to the effect these disasters
had on commerce. However, individuals who became unemployed as a result
of the general decline in commerce in response to these major disasters
were not unemployed as a ``direct result'' of the major disasters and
thus were not considered eligible for DUA.
[[Page 10933]]
The above considerations apply equally to any major disaster. They
led the Department to conclude and instruct state agencies that workers
and self-employed individuals whose work site, for example, is within
the presidentially-declared major disaster area yet outside the
immediate disaster site, and who no longer have a job because the
federal government either closed or took over the work site in
immediate response to the major disaster, are potentially eligible for
DUA. The interim final rule included only employees and self-employed
individuals at facilities closed by the federal government in the major
disaster area. (For further explanation of this issue, see ``Other
Changes to the Final Rule'' below.) Examples of eligible individuals in
the case of an airport shutdown in the major disaster area included
airport employees, owners and employees of restaurants and shops
located in airport terminal buildings, and workers or service providers
for these and other facilities where the above conditions were met.
However, workers at other airports not closed by the federal government
were not considered eligible for DUA under the interim final rule.
Individuals potentially eligible for DUA also included employees and
self-employed individuals who could not perform services or get to
their workplace not only because of physical damage to their place of
employment but because a federal agency, such as FEMA, took over such
site for disaster administration purposes. Similarly, because the
federal government could, as an immediate emergency response to the
major disaster, close certain facilities such as bridges or tunnels in
the major disaster area, employees of those facilities could,
therefore, be potentially eligible for DUA.
As noted above, the Department also concluded in the interim final
rule that an employee or self-employed individual could be eligible for
DUA if the entity in the major disaster area was closed by the
government in immediate response to the major disaster or the major
disaster caused physical damage to or destruction of an entity in the
major disaster area which, before the major disaster, provided at least
a majority of the employer's or self-employed individual's revenue or
income. Where less than a majority of the employer's or self-employed
individual's revenue or income came from that entity, the link to the
unemployment was viewed as too tenuous to be considered direct under
the regulations. Just as this test would be employed to determine
whether employees of suppliers of goods or services to entities
physically damaged by the major disaster may be eligible for DUA, so
too would that analysis be applicable to employees of suppliers of
goods or services to other entities closed or taken over by the federal
government in immediate response to the major disaster. Thus, if one of
those entities provided at least a majority of the revenue or income of
that employer or self-employed individual, the employees of that
business or that self-employed individual could be eligible for DUA.
Where it could not be established that at least a majority of the
revenue or income of a business or self-employed individual was
dependent upon providing goods or services to these entities, DUA
eligibility must be denied. For example, a taxicab driver would be
potentially eligible for DUA where a majority of his or her business
depended on providing transportation services between points which
included areas cordoned off because of the physical damage of the major
disaster or because facilities were closed or commandeered by the
federal government. On the other hand, DUA eligibility should be denied
a taxicab driver who cannot establish that a majority of his or her
livelihood depended on providing transportation services between points
which include areas cordoned off because of either the physical damage
of the major disaster or the closing or commandeering of the facilities
in the major disaster area by the federal government.
Further, the interim final rule said that DUA is payable only for
those weeks of unemployment during the disaster assistance period that
continue to be the direct result of the major disaster. Therefore, if
the state agency finds that an eligible DUA applicant's unemployment
can no longer be directly attributed to the major disaster, the
applicant is no longer unemployed as a direct result of the disaster
and is no longer eligible for DUA.
III. Comments on the Interim Final Rule
The Department received comments on the interim final rule from a
furloughed airline worker, three state workforce agencies (Iowa,
Kansas, and New Jersey), three labor organizations, and five employee
advocacy organizations. The three labor organizations were the American
Federation of State, County, and Municipal Employees (AFSCME), the
American Federation of Labor and Congress of Industrial Organizations
(AFL-CIO), and the Service Employees International Union (SEIU). The
five employee advocacy organizations included the Urban Justice Center,
New York City, on behalf of the Chinese Staff and Worker's Association;
the National Employment Law Project, New York City and Oakland,
California; the Greater Boston Legal Services; the New York Taxi
Workers' Alliance, New York City; and the Workforce Organizations for
Regional Collaboration, Arlington, Virginia. In addition, a state
senator from New York submitted a letter in support of the comments of
the National Employment Law Project. The Department discusses and
responds below only to those comments received that were relevant to
the regulatory section we added in the interim final rule, Sec.
625.5(c).
The furloughed airline worker submitted a comment requesting an
amendment to the interim final rule to include coverage of employees of
airlines affected by the government-imposed restrictions on air
traffic. The Department realizes that the airline industry, as well as
this individual, suffered economically as a result of the ``ripple
effect'' the September 11 attacks had on the overall economy. While the
Department is sympathetic to the effect the terrorist attacks had on
the airline industry and others, the interim final rule was promulgated
to specifically define the phrase ``unemployment as a direct result of
the major disaster,'' as used in the existing DUA regulations. The
Department never intended to define the phrase to include individuals
unemployed due to an economic ``ripple effect'' of a major disaster, as
this would inappropriately broaden the rule's scope to include
individuals indirectly affected by the disaster. In drafting the
interim final rule, the Department did take into account the fact that
certain individuals and businesses located outside the disaster area
could be severely affected by the loss of economic activity within the
disaster area. Therefore, the phrase ``unemployment as a direct result
of the major disaster'' is defined to include self-employed
individuals, as well as employees of businesses, suffering from
unemployment because their employers or businesses received, before the
disaster, more than fifty percent of revenues from businesses damaged,
destroyed, or closed by the government within the major disaster area.
The regulation, however, was never intended to cover all of the
possible economic effects of a disaster.
[[Page 10934]]
Comments From State Workforce Agencies
All the comments from the state workforce agencies, and nearly all
the labor organizations and worker advocacy groups, complimented the
Department for the provisions included in the interim final rule. The
Kansas agency supported the amendment made by the interim final rule.
Likewise, the Iowa agency supported the amendment, focusing
particularly on how the rule would likely help small businesses in Iowa
that serve farmers affected by major disasters.
The New Jersey agency also supported the amendment but requested a
broadening of the rule to ensure DUA eligibility for individuals not
generally eligible for regular UC. Specifically, New Jersey suggested
that individuals who worked exclusively out of an airport, such as
limousine drivers, would be excluded from DUA eligibility unless the
airport was closed or taken over by the government. While that may be
true, the Department notes that the amendment expands the coverage for
DUA to include the unemployment of employees and self-employed
individuals where, before the disaster, the employer, or the business
in the case of a self-employed individual, received at least a majority
of its revenue or income from an entity that was either damaged or
destroyed in the disaster, or an entity in the major disaster area
closed by the federal, state or local government in immediate response
to the disaster. Thus, if a limousine driver lost the majority of his
or her business due to the government closing an airport, or if the
driver obtained the majority of his or her income from serving guests
at hotels and the hotels were closed because of a major disaster, then
the individual would be potentially eligible for DUA. The Department
recognizes that the amendment is more restrictive than New Jersey
advocates. However, the Department chose not to broaden the scope of
the rule as this would overextend the rule's coverage to include
individuals indirectly injured by the major disaster, such as workers
secondarily affected by the economic ``ripple effect'' after the
terrorist attacks of September 11, 2001, as discussed above with regard
to the airline industry.
Comments From Labor and Employee Advocacy Organizations
Nearly all of the comments from labor and employee organizations
advocated an expansion of the DUA program to reach more workers. The
three labor organizations and the five employee advocacy organizations,
along with a New York state senator, submitted nearly identical
comments on one or more of the following issues:
1. Workers otherwise covered by DUA should not be denied DUA when
the order rendering the business inaccessible is issued by a private or
public/governmental entity other than the federal government in
response to security concerns or the provision of services related to a
disaster.
2. Workers unemployed because their company did business with an
entity damaged or destroyed by the disaster should receive DUA when the
loss of revenue from the company ``contributed importantly'' or
``contributed significantly'' (rather than losing the majority of one's
income) to the employer's decision (or self-employed individual's
decision) to order a layoff or reduce hours of work.
3. The regulations should abandon the requirement that a worker,
initially determined as separated from work due to the disaster, must
establish on a weekly basis that his or her unemployment is still the
direct result of the disaster.
4. Because the interim final rule expanded coverage and was a shift
in policy, any workers who had been denied DUA prior to the publication
of the interim final rule, as well as all individuals filing for DUA
after the rule's publication should be entitled to receive DUA
retroactively.
In addition, the AFL-CIO argued that the regulations should provide
that a worker's immigration status is immaterial to DUA eligibility.
The AFL-CIO also advocated expanding DUA eligibility to include
individuals employed in areas near, but not specifically designated as,
disaster areas.
The Department agrees, in part, with the first proposal to amend
Sec. 625.5(c) to cover workers due to business closures by private or
public and governmental entities in the major disaster area in response
to security concerns or the provision of services related to that
disaster. The interim final rule added paragraphs (c)(2) and (c)(3) to
Sec. 625.5 which expanded the circumstances under which individuals
would be considered unemployed as a direct result of the disaster. The
Department intended that individuals would be covered if their
unemployment resulted from their place of employment in the major
disaster area being closed or taken over by the federal government in
immediate response to that disaster, or where, prior to the disaster,
the employer, or the business in the case of a self-employed
individual, received at least a majority of its revenue or income from
an entity in the major disaster area that was either damaged or
destroyed in that disaster, or an entity in the major disaster area was
closed by the federal government, in immediate response to that
disaster resulting in lack of work or loss of revenues. A major reason
for adopting these provisions was that, as far as the Department knows,
there had never been a disaster situation where the federal government,
as a result of the disaster, closed facilities separate and apart from
the actual disaster site. The Department wanted to ensure that
individuals unemployed at those sites due to a federal closure were
considered unemployed as a direct result of the major disaster. In all
major disasters, geographic areas within a state (generally counties
and sometimes cities) are designated as the major disaster areas. The
Department has consistently held that state and local governments'
decisions affecting the closure of businesses and the health and safety
of individuals determine whether individuals are unemployed as a direct
result of the major disaster. For example, if a city waste treatment
facility were flooded and the city ordered certain businesses in an
area of the city to close because the waste treatment facility was not
functioning as a result of the disaster, the Department would conclude
that out-of-work individuals from those businesses were unemployed as a
direct result of the disaster. The Department did not intend to suggest
that the rights of state and local governments to manage disasters in
their jurisdictions were limited by this regulation, which defines
unemployment as a direct result of the disaster. Consequently, in order
to be clear that the amendment covers such government closings, the
Department has revised Sec. 625.5(c)(2) and (c)(3) to include closures
by the federal, state, or local government.
The Department, however, does not believe it sensible to add
businesses closed by private entities, unless such entities were
advised or required by governmental agencies to close for health or
safety reasons related to the disaster. Indeed, while a private entity
could decide to close down its operations for any reason, only
governmental agencies have authority to force a closure of facilities
or businesses due to a disaster, usually to protect the health and
safety of the populace. Given that government agencies are vested with
such responsibility, the Department believes it best to limit coverage
to individuals unemployed
[[Page 10935]]
due to governmental actions or recommendations designed to protect the
public's health and safety, as opposed to purely private closures.
The Department declines to accept the second proposal to amend
Sec. 625.5(c) to consider an individual unemployed due to the major
disaster if that individual's loss of income ``contributed
importantly'' or ``contributed significantly'' to his or her
unemployment rather than as provided in the regulation, which requires
that an individual received at least a majority of his or her revenue
or income from the entity that was damaged, destroyed, or closed by the
federal government. The genesis of this majority of revenue or income
test came in the form of a 1994 Advanced Notice of Proposed Rulemaking
(59 FR 63670, 63672), where, for purposes of Sec. 625.5(a)(1), (a)(3),
(b)(1) and (b)(3), the Department proposed that a worker or self-
employed individual was considered unemployed due to the disaster where
(s)he was unable to perform more than 50 percent of his or her usual
and customary services that were being performed prior to the major
disaster because sales to customers coming to the job site or work
location were substantially reduced as a direct result of the major
disaster. While this interpretation was never adopted as a regulation,
the Department did apply it informally on a case-by-case basis. The
Department then revised and formalized this interpretation in the
interim final rule to include such unemployment due to lack of work, or
loss of revenues, where prior to the disaster the employer, or the
business in the case of a self-employed individual, received at least a
majority of its revenue or income from an entity in the major disaster
area that was either damaged or destroyed in that disaster, or an
entity in the major disaster area closed by the federal government in
immediate response to that disaster.
This majority of income or revenue test is a defined amount, can be
determined with a good degree of accuracy, utilizes a simple
calculation, and is an equitable standard applicable to all claimants.
On the other hand, the terms ``contributed importantly'' or
``contributed significantly'' do not easily translate into a
quantifiable amount, thus lacking the relative ease and certitude of
the majority of income or revenue test. Adopting such subjective
criteria would be administratively difficult for state workforce
agencies dealing with the exigencies of a disaster to implement. While
such a ``contributed importantly'' test is used under the Department's
Trade Act programs (19 U.S.C. 2272(a)(3) and 2331(a)), the authorizing
statute permits the agency 60 days under the Trade Act and 30 days
under the expiring North American Free Trade Agreement transitional
adjustment assistance program to make this determination (19 U.S.C.
2273(a) and 2331(c)(1)), and the recent amendments to the Trade Act now
change that time period to 40 days. Trade Act of 2002, Public Law 107-
210, section 112(b). Under DUA, however, the Department believes that a
bright line test is necessary to ensure benefit determinations can be
made quickly so assistance can be given out expeditiously to those in
need. Furthermore, several of the comments criticized this ``majority
of income or revenue'' standard in the interim final rule as burdensome
on claimants because it limits them to producing tax and financial
documents. The Department disagrees and notes that all evidence (e.g.,
affidavits, employer statements, and other credible evidence) will be
considered in establishing a claim and not only typical financial
records. Thus, the Department believes that the ``majority of income or
revenue'' test is fair and provides a more workable standard.
The Department also declines to adopt comment three to amend Sec.
625.5(c) to eliminate the requirement for establishing on a weekly
basis that a claimant's unemployment is still the direct result of the
major disaster. Those advocating this comment believe that eliminating
this requirement would make DUA more like the regular UC program, in
that once a claimant qualifies for benefits (s)he no longer is required
to establish that the unemployment is a result of the original layoff
or separation. However, the Department notes that this weekly
requirement follows the statutory requirements of section 410(a) of the
Stafford Act whereby ``[t]he President is authorized to provide to any
individual unemployed as a result of a major disaster such benefit
assistance as he deems appropriate while such individual is unemployed
for the weeks of such unemployment with respect to which the individual
is not entitled to any other unemployment compensation.'' 42 U.S.C.
5177(a). The Department cannot adopt this proposal as it contravenes
the DUA authorizing statute, which establishes eligibility for benefits
on a weekly basis.
Comment four on the retroactive payment of DUA did not propose a
change to Sec. 625.5(c) but instead addressed the administration of
the new DUA regulatory provision. While advocates for comment four
requested retroactive benefits due to the change in DUA eligibility,
several commenters also requested aggressive publicity of these new
eligibility rules. In response to these comments, the Department notes
that it advised the state agencies in New York and Virginia, in a
memorandum before publication of the interim final rule, of the
Department's position on both retroactive and partial payments and that
individuals could be eligible in accordance with the yet unpublished
rule. Thus, the Department made it clear that New York and Virginia
were to apply the principles of this rule to all claims arising out of
the September 11 terrorist attacks. New York, for example, made
significant efforts to publicize DUA eligibility criteria using various
media in several different languages.
Lastly, the AFL-CIO made two separate comments. They proposed
paying DUA to all aliens, whether legally in the United States or not.
However, the Department cannot adopt this proposal due to limitations
placed on the DUA program by the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (PRWORA). Section 432 of the
PRWORA (Pub. L. 104-193), as amended, provides that only aliens falling
within the definition of ``qualified aliens'' are eligible for federal
public benefits, which include benefits under the DUA program.
Therefore, DUA payments to other than qualified aliens are prohibited.
The AFL-CIO also advocated expanding DUA eligibility to include
areas close to, but not specifically designated as, major disaster
areas. They posited that workers in the District of Columbia who were
adjacent to the disaster area in Arlington, Virginia were ineligible
for DUA even though they may have been negatively affected by the
disaster. The AFL-CIO suggests broadening coverage because the disaster
hurt, in a general way, the District of Columbia's economy, so that the
unemployed in DC should be eligible to receive DUA. The Department has
sought to limit coverage to a ``direct result'' of the disaster, since
the ``ripple effect'' on the DC economy and other adjacent
jurisdictions would be endless. The Department notes that the interim
final rule at Sec. 624.5(c)(3) allows for the coverage of individuals
outside the major disaster area when they can establish that a majority
of their income or business revenue came from an entity in the major
disaster area either damaged or destroyed in the disaster, or closed by
the federal government in immediate response to the disaster. Thus, an
independent contractor in Washington, DC, who lost a majority of its
income due to the Pentagon attack or
[[Page 10936]]
closure of Reagan National Airport, could potentially be eligible for
DUA as could a DC taxi driver, the majority of whose revenue came from
trips to and from Reagan National Airport.
Other Changes to the Final Rule
The Department notes that it erred in its initial description of
the interim final rule when, after describing the limited scope of the
rule, it said considerations led ``the Department to conclude that
workers and self-employed individuals whose work site, for example, is
outside a major disaster area, and who no longer have a job because the
federal government either closed or took over the job site in response
to the major disaster, are potentially eligible for DUA.'' (66 FR
56961.) This statement is wrong since the rule was never intended to
cover the physical inaccessibility to a place of employment or the lack
of work or loss of revenues due to damage, destruction or the closure
of entities located outside the major disaster area. As noted earlier
in this preamble and as demonstrated by the Department's subsequent
implementation of the rule after publication, what was meant was not a
place of employment or entity located ``outside the major disaster
area'' as that term is defined in the regulations, but instead a place
of employment or entity located ``outside the major disaster site''
(i.e., the actual area damaged by the disaster and not the broader
jurisdiction, such as a county or city, that is typically designated
the major disaster area), but within the major disaster area.
As the interim final rule's example on taxi drivers and its
reference to the closure of Reagan National Airport after the terrorist
attacks make clear, the Department intended to cover individuals whose
place of employment was located within the major disaster area but
which may not have been located at the actual disaster site. Thus,
individuals unemployed due to lack of work, or loss of revenues, would
be eligible, provided that prior to the disaster, the employer, or the
business in the case of a self-employed individual, received at least a
majority of its revenue or income from an entity in the major disaster
area that was either damaged or destroyed in the disaster, or an entity
in the major disaster area closed by the federal, state or local
government in immediate response to the disaster.
Since publication of the interim final rule, the Department has
acted consistently with this interpretation. Indeed, the state agency,
in accordance with our interpretation, denied benefits to Maryland
airport workers unemployed due to the federal government's closure of
municipal airports in the Washington, DC Metropolitan Area, because
their place of employment was outside the declared major disaster areas
of Arlington, Virginia, and New York City. Moreover, these employees
and self-employed individuals did not have employers or businesses that
received a majority of income or revenues from an entity that was
either damaged or destroyed in the disaster (e.g., the Pentagon), or an
entity in the major disaster area closed by the government in immediate
response to the disaster (e.g., Reagan National Airport). Therefore,
these individuals were ineligible to receive benefits in accordance
with the Department's interpretation. Consequently, in order to correct
the error in the preamble of the interim final rule and to clarify the
Department's interpretation, the Department has revised Sec.
625.5(c)(2) and (c)(3) to include the phrase ``in the major disaster
area'' when referencing the place of employment and entities described
in those sections.
Effective Date
Because no changes were made to the interim final rule other than
to Sec. 625.5(c)(2) and (c)(3), the Department has determined that
this final rule will be effective upon publication, except for Sec.
625.5(c)(2) and (c)(3) which will be effective 30 days after
publication.
Executive Order 12866
This final rule is a ``significant regulatory action'' within the
meaning of Executive Order 12866 because it meets the criteria of
section 3(f)(4) of that Order in that it raises novel or legal policy
issues arising out of legal mandates, the President's priorities, or
the principles set forth in the Executive Order. Accordingly, this rule
was submitted to, and reviewed by, the Office of Management and Budget.
It is not ``economically significant'' within the meaning of section
3(f)(1) of that Executive Order because it will not have an annual
effect on the economy of $100 million or more. Rather, the Department
estimates the cost of benefits under this rule for the major disasters
of September 11, 2001, to be $2.205 million and, therefore, projects
that the annual cost of benefits under this rule will be far less than
$100 million.
The Department has evaluated the rule and finds it consistent with
the regulatory philosophy and principles set forth in Executive Order
12866, which governs agency rulemaking. The rule will not impact states
and state agencies in a material way because it would not impose any
new requirements on states. Instead, the final rule simply clarifies
the rules that states use to determine the eligibility of individuals
affected by these new types of disasters now affecting the nation, such
as the terrorist attacks of September 11, 2001. Also, the federal
government entirely finances DUA benefits.
Paperwork Reduction Act
The Department has determined that this final rule contains no new
information collection requirements. The existing information
collection requirements are approved under Office of Management and
Budget control number 1205-0051.
Executive Order 13132
The Department has reviewed this final rule in accordance with
Executive Order 13132 regarding federalism. The order requires that
agencies, to the extent possible, refrain from limiting state policy
options, consult with states prior to taking any actions which would
restrict states' policy options, and take such action only when there
is clear constitutional authority and the presence of a problem of
national scope. Because this is a federal benefit program, the
Department has determined that the rule does not have federalism
implications.
Executive Order 12988
The Department drafted and reviewed this rule in accordance with
Executive Order 12988, Civil Justice Reform, and will not unduly burden
the federal court system. The rule has been written to minimize
litigation and provide a clear legal standard for affected conduct, and
has been reviewed carefully to eliminate drafting errors and
ambiguities.
Unfunded Mandates Reform Act of 1995 and Executive Order 12875
The Department has reviewed this final rule in accordance with the
Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1501 et seq.) and
Executive Order 12875. The Department has determined that this rule
does not include any federal mandate that may result in increased
expenditures by state, local, or tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any one year.
Accordingly, the Department has not prepared a budgetary impact
statement.
Regulatory Flexibility Act
The Department has determined that this final rule will not have a
significant economic impact on a substantial number of small entities.
The rule sets forth the terms under which states and state agencies,
which are not within the
[[Page 10937]]
definition of ``small entity'' under 5 U.S.C. 601(6), will pay federal
benefits. Benefits provided under section 410(a) of the Stafford Act
are fully funded by the federal government. Under 5 U.S.C. 605(b), the
Secretary has certified to the Chief Counsel for Advocacy of the Small
Business Administration to this effect. Accordingly, no regulatory
flexibility analysis is required.
Effect on Family Life
The Department certifies that this final rule has been assessed in
accordance with section 654 of Public Law 105-277, 112 Stat. 2681, for
its effect on family well-being. The Department concludes that the rule
will not adversely affect the well-being of the nation's families.
Rather, it should have a positive effect on family well-being by
providing benefits to more individuals whose households have been
affected by major disasters.
Small Business Regulatory Enforcement Fairness Act of 1996 and
Congressional Notification
The Department has determined that this final rule is not a major
rule as defined by section 804 of the Small Business Regulatory
Enforcement Fairness Act of 1996 (5 U.S.C. 804(2)). This rule will not
result in an annual effect on the economy of $100,000,000 or more; a
major increase in costs or prices; or significant adverse effects on
competition, employment, investment, productivity innovation, or on the
ability of United States-based companies to compete with foreign-based
companies in domestic and export markets. With regard to the revised
sections of the final rule, the Department will submit to each House of
Congress and to the Comptroller General a report regarding the issuance
of this final rule prior to the effective date of the rule, which will
note that this rule does not constitute a ``major rule'' for purposes
of this Act.
Catalogue of Federal Domestic Assistance Number
This program is listed in the Catalogue of Federal Domestic
Assistance at No. 17.225, ``Disaster Unemployment Assistance (DUA).''
List of Subjects in 20 CFR Part 625
Disaster assistance, Labor, and Unemployment compensation.
Words of Issuance
Accordingly, the interim final rule amending part 625 of chapter V
of title 20, Code of Federal Regulations, which was published at 66 FR
56960 on November 13, 2001, is adopted as a final rule with the
following changes to Sec. 625.5(c)(2) and (c)(3):
PART 625--DISASTER UNEMPLOYMENT ASSISTANCE
1. The authority for part 625 continues to read as follows:
Authority: 42 U.S.C. 1302; 42 U.S.C. 5164; 42 U.S.C. 5189a(c);
42 U.S.C. 5201(a); Executive Order 12673 of March 23, 1989 (54 FR
12571); delegation of authority from the Director of the Federal
Emergency Management Agency to the Secretary of Labor, effective
December 1, 1985 (51 FR 4988); Secretary's Order No. 4-75 (40 FR
18515).
2. Section 625.5(c)(1) is republished, and paragraphs (c)(2) and
(c)(3) are revised to read as follows:
Sec. 625.5 Unemployment caused by a major disaster.
* * * * *
(c) Unemployment is a direct result of the major disaster. For the
purposes of paragraphs (a)(1) and (b)(1) of this section, a worker's or
self-employed individual's unemployment is a direct result of the major
disaster where the unemployment is an immediate result of the major
disaster itself, and not the result of a longer chain of events
precipitated or exacerbated by the disaster. Such an individual's
unemployment is a direct result of the major disaster if the
unemployment resulted from:
(1) the physical damage or destruction of the place of employment;
(2) the physical inaccessibility of the place of employment in the
major disaster area due to its closure by or at the request of the
federal, state or local government, in immediate response to the
disaster; or
(3) lack of work, or loss of revenues, provided that, prior to the
disaster, the employer, or the business in the case of a self-employed
individual, received at least a majority of its revenue or income from
an entity in the major disaster area that was either damaged or
destroyed in the disaster, or an entity in the major disaster area
closed by the federal, state or local government in immediate response
to the disaster.
Signed at Washington, DC, on February 27, 2003.
Emily Stover DeRocco,
Assistant Secretary of Labor.
[FR Doc. 03-5271 Filed 3-5-03; 8:45 am]
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