counsel or other representative before the Board in any proceeding until two years from the termination of his status as a Board member. The practice of other former employees of the Department of Labor are governed by 29 CFR 2.2 and 2.3.

(c) Debarment of counsel or other representative. Whenever in any proceeding the Board finds that a person acting as counsel or other representative for any party to the proceeding is guilty of unethical or unprofessional conduct, the Board may order that such person be excluded from further acting as counsel or other representative in such proceeding. An appeal may be taken to the Secretary of Labor from such an order, but the proceeding shall not be delayed or suspended pending disposition of the appeal, although the Board may suspend the proceeding for a reasonable time for the purpose of enabling the party to obtain different counsel or other representative. Whenever the Board has issued an order precluding a person from further acting as counsel or other representative in a proceeding, the Board shall within a reasonable time thereafter submit to the Secretary of Labor a report of the facts and circumstances surrounding the issuance of the order, and shall recommend what action the Secretary of Labor should take in regard to the appearance of such person as counsel or other representative in other proceedings before the Board. Before any action is taken debarring such person as counsel or representative from other proceedings, he shall be furnished notice

and opportunity to be heard on the matter.

(d) Fees. No claim for legal or other service rendered in respect to a proceeding before the Board to or on account of any person, shall be valid unless approved by the Board or by a member thereof. No contract for a stipulated fee or for a fee upon a contingent basis shall be recognized by the Board, and no fee for service shall be approved except upon an application to the Board supported by a sufficient statement of the extent and character of the necessary work done before the Board on behalf of the interested party. Except where such representation is gratuitous, the fee approved by the Board, or by a member thereof, shall be reasonably commensurate with the actual necessary work performed by such representative, taking into account the capacity in which the representative has appeared, the amount of the compensation involved, and the circumstances of the appellant. § 501.12 Intervention.

The Board may permit any person whose rights may be affected by any proceeding before the Board to intervene therein whenever such person shows in a written petition to intervene that such rights are so affected. The petition should state with precision and particularity (a) the rights affected; and (b) the nature of any argument he intends to make.

§ 501.13 Place of proceedings.

The Board shall sit in Washington, D.C.

AUTHORITY: The provisions of this Part 601 issued under sec. 12, 48 Stat. 117. as amended; 29 U.S.C. 49k; also issued under sec. 1102, 49 Stat. 647, as amended, secs. 113, 48 Stat. 113, as amended, secs. 301-303, 49 Stat. 626, as amended; 68A Stat. 439; 42 U.S.C. 1302, 29 U.S.C. 49-491; 42 U.S.C. 501503; 26 U.S.C. 3301-3308, unless otherwise noted.

SOURCE: The provisions of this Part 601 appear at 15 F.R. 5886, Aug. 31, 1950; 23 F.R. 1267, Mar. 1, 1958, unless otherwise noted.

Subpart A-Approval, Certification

and Findings With Respect to State Laws and Plans of Operation for Normal and Additional Tax Credit and Grant Purposes

State unemployment compensation laws are approved and certified as provided in section 3304 of the Internal Revenue Code of 1954; findings are made regarding reduced rates permitted by a State law (section 3303(a) of the Internal Revenue Code of 1954) and such laws are certified as provided in section 3303(b) of the Internal Revenue Code of 1954; findings are made regarding the inclusion of specified provisions (section 303 (a) of the Social Security Act) in State laws approved under section 3304(a) of the Internal Revenue Code of 1954; findings are made whether the States have accepted the provisions of the Wagner-Peyser Act and whether their plans of operation for public em

ployment offices comply with the provisions of said Act.

Normal and additional tax credit is given to taxpayers against taxes imposed by section 3301 of the Internal Revenue Code of 1954.

Grants of funds are made to States for administration of their employment security laws if their unemployment compensation laws and their plans of operation for public employment offices meet required conditions of Federal law. (Section 303 (a) of the Social Security Act; section 3304 (a) of the Internal Revenue Code of 1954; sections 6, 7 and 8 of the Wagner-Peyser Act.)

§ 601.2 Approval of State unemployment compensation laws.

States may at their option submit their unemployment compensation laws for approval (section 3304(a) of the Internal Revenue Code of 1954).

(a) Submission. The States submit to the Regional Representative of the Manpower Administration four copies of the State unemployment compensation law, properly certified by an authorized State official to be true and complete, together with a written request for approval

(b) Review of State law. The Regional Representative reviews the State law and forwards three copies to the central office of the Manpower Administration with his comments. The Manpower Administration reviews the Regional Representative's comments and analyzes the State law from the standpoint of the requirements of section 3304 (a) of the Internal Revenue Code of 1954.

(c) Approval. The Secretary of Labor determines whether the State law contains the provisions required by section 3304 (a) of the Internal Revenue Code of 1954. If the State law is approved, the Secretary notifies the Governor of the State within 30 days of the submission of such law.

(d) Certification. On December 31 of each taxable year the Secretary of Labor certifies, for the purposes of normal tax credit (section 3302 (a) (1) of the Internal Revenue Code of 1954), to the Secretary of the Treasury each State the law of which he has previously approved. (See also § 601.5.)

§ 601.3 Findings with respect to State laws and plans of operation.

For purposes of grants, findings are made regarding the inclusion in State unemployment compensation laws, ap

proved under section 3304 (a) of the Internal Revenue Code of 1954, of provisions required by section 303 (a) of the Social Security Act (see § 601.2); findings are also made whether a State has accepted the provisions of the WagnerPeyser Act and whether its plan of operation for public employment offices complies with the provisions of said act. For purposes of additional tax credit, findings are made regarding reduced rates of contributions permitted by the State law (section 3303 (a) (1) of the Internal Revenue Code of 1954).

So that the Secretary of Labor may be enabled to determine the status of State laws and plans of operation, all relevant State materials, such as statutes, executive and administrative orders, legal opinions, rules, regulations, interpretations, court decisions, etc., are required to be submitted currently.

(a) Submission. The States submit currently to the Regional Representative four copies of relevant State material, properly certified by an authorized State official to be true and complete.

(b) Review. The Regional Representative reviews the State material and forwards three copies to the central office of the Bureau with his comments. The Bureau reviews the material from the standpoint of its conformity with section 303 (a) of the Social Security Act, section 3303 (a) of the Internal Revenue Code of 1954; or the Wagner-Peyser Act, as the case may be. If questions are raised concerning such conformity, negotiations to resolve them are undertaken with State officials. Any questions then remaining unresolved are presented to the Secretary with appropriate recommendations. If a State plan of operation for public employment offices, and any amendment thereto, complies with the provisions of the Wagner-Peyser Act, the State agency is notified of the approval of the plan or the amendment as the case may require.

(c) Findings. The Secretary makes findings as provided in the cited sections of the Federal law. In the event that the Secretary is unable to make the findings required for certification for payment or for certification of the law for purposes of additional tax credit. further discussions with State officials are undertaken.

§ 601.4 Certification for tax credit.

Within 30 days after submittal of a State unemployment compensation law 66-040-72-42

for such purpose, the Secretary certifies to the State agency, in accordance with the provisions of section 3303 (b) (3) of the Internal Revenue Code of 1954, his findings regarding reduced rates of contributions allowable under such law. On December 31 of each taxable year the Secretary certifies to the Secretary of the Treasury the law of each State, certified with respect to such year under section 3304 of the Internal Revenue Code of 1954 (see § 601.2), which he finds allows reduced rates with respect to such taxable year only in accordance with the provisions of section 3303 (a) of the Internal Revenue Code of 1954.

(a) When withheld. Payment of funds to States or yearend certification of State laws, or both, are withheld when the Secretary finds, after reasonable notice and opportunity for hearing:

(1) That any provision required by section 303 (a) of the Social Security Act is no longer included in the State unemployment compensation law; or

(2) That the State unemployment compensation law has been so changed as no longer to meet the conditions required by section 3303 (a) of the Internal Revenue Code of 1954 (sec. 3303(b) (3) of the Internal Revenue Code); or

(3) That the State unemployment compensation law has been so amended as no longer to contain the provisions specified in section 3304(a) or has failed to comply substantially with any such provision and such finding has become effective (sec. 3304 (c) of the Internal Revenue Code of 1954); or

(4) That in the administration of the State unemployment compensation law there has been a failure to comply substantially with required provisions of such law (sec. 303(b) (2) of the Social Security Act and sec. 3303(b) (3) of the Internal Revenue Code of 1954); or

(5) That in the administration of the State unemployment compensation law there has been a denial, in a substantial number of cases, of benefits due under such law, except that there may be no such finding until the question of entitlement has been decided by the highest judicial authority given jurisdiction under such State law (sec. 303(b) (1) of the Social Security Act); or

(6) That a State fails to make its unemployment compensation records available to the Railroad Retirement Board or fails to cooperate with Federal agencies charged with the administration of un(sec. employment compensation laws 303 (c) of the Social Security Act); or

(7) That a State no longer has a plan of operation for public employment offices complying with the provisions of the Wagner-Peyser Act; or

(8) That a State agency has not properly expended, in accordance with an approved plan of operation, the Federal monies paid it for administration of its public employment service.

(b) Informal discussion. Such hearings are generally not called, however, until after every reasonable effort has been made by regional and central office representatives to resolve the question involved by conference and discussion with State officials. Formal notification of the date and place of a hearing does not foreclose further negotiations with State officials.

(c) Notice of noncertification. If, at any time during the taxable year, the Secretary of Labor has reason to believe that a State whose unemployment compensation law he has previously approved may not be certified, he promptly notifies the Governor of the State to that effect (sec. 3304(d) of the Internal Revenue Code of 1954).

(d) Notice of hearing. Notice of hearing is sent by the Secretary of Labor to the State employment security agency. The notice sets forth the purpose of the hearing, the time, date, and place at which the hearing will be held, and the rules of procedure which will be followed. At a hearing the State is given an opportunity to present arguments and all relevant evidence, written or oral. The Secretary makes the necessary determination or findings, on the basis of the record of such hearings. A notice of the Secretary's determination or finding is sent to the State employment security agency.

(e) Civil Rights Act issues. To the extent that any proposed withholding of funds involves circumstances within the scope of Title VI of the Civil Rights Act of 1964 and the regulations promulgated thereunder, the procedure set forth in 29 CFR Part 31 shall be applicable.

(26 U.S.C. 3303 (b) (3) and 3304 (c)) [30 F.R. 6942, May 22, 1965]

Subpart B-Grants, Advances and Audits

§ 601.6 Grants for administration of unemployment insurance and employment service.

Grants of funds for administration of State unemployment insurance and public employment service programs are made to States under section 302(a) of the Social Security Act, the Wagner-Peyser Act, and the Appropriation Acts.

(a) Requests for funds. The forms and instructions used by State agencies in requesting funds are available upon request from the Manpower Administration, Department of Labor, Washington, D.C. 20210, and at the regional offices. The forms and instructions call for detailed information for each budgetary period concerning the specific amounts requested for personal services and other current expenses of State agencies, supported by workload and unit-cost estimates. Supplementary budget requests are processed in the same manner as regular requests. The Administration's representatives in the regional offices furnish assistance to the State agencies in preparing requests for funds.

(b) Processing of requests. State agencies send their requests for funds to the regional representative of the Manpower Administration who reviews the requests and forwards them to the central office of the Administration with his recommendation as to the amounts necessary for proper and efficient administration of the State unemployment compensation law and employment service program.

The Administration appraises the requests and the recommendations of the regional representatives from a nationwide point of view, examining each State's request in the light of the experience of other States to insure equitable treatment among the States in the allocation of funds made available by Congress for the administration of State unemployment compensation laws and public employment service programs.

(c) Action by Administrator. If the Administrator approves the State's budget request, the State agency is not!fied; and, provided the conditions precedent to grants continue during the budgetary period, certifications for payment, under the approved budget, stating the amounts, are made by the Ad