On March 4 the state Department of Labor released a copy of a letter the agency received from the U.S. Department of Labor concerning disposition of the labor history mural.

Adam Fisher, spokesperson from the Maine Department of Labor, confirmed the letter arrived Monday morning from Gay Gilbert, administrator with the Office of Unemployment Insurance.

It was addressed to Laura Boyett, acting commissioner, Maine Department of Labor.

“We have reviewed the letter and are assessing what it may mean for the agency moving forward,” said Fisher in a press release.

Following is the text of the letter:

This letter is to advise you of the application of the Federal Unemployment Compensation (UC) law requirements to your disposition of a mural commissioned in 2007 for your new headquarters.

The majority of the artist’s commission of $60,000 was paid from “Reed Act” funds, that is, funds transferred to the state’s account in the Federal Unemployment Trust Fund (UTF) under section 903 of the Social Security Act (SSA) (42 U.S.C. 1103). Accordingly, Federal UC laws concerning Reed Act money govern the disposition of this property.

In particular, section 3304(a)(4) of the Federal Unemployment Tax Act (FUTA) (26 U.S.C. 3304(a)(4) permits a state that chooses to participate in the Federal-State UC program to withdraw money from its unemployment fund for the purposes set forth in the Reed Act.

The Reed Act permits a participating state to use its Reed Act funds, under an appropriation by the state legislature, for the administration of its UC law and public employment offices. The state properly complied with this requirement in paying, under an appropriation, 63.39 percent of the commission from the Reed Act funds in its UTF account, since the display of this art work in your headquarters served these administrative purposes.

We understand, however, that the mural is no longer on display in your headquarters. Thus, it is no longer being used for an administrative purpose permitted by the Reed Act.

Accordingly, under the “immediate deposit” standard (FUTA section 3304 (a)(3)(26 U.S.C. 3304 (a)(3) and SSA section 303(a)(4)(42 U.S.C. 503 (a)(4)), the state must, as a condition of continued participating in the Federal-State UC program, return to its UTF account the amount of the Reed Act funds represented by the mural.

This amount is computed by applying the Reed Act funds’ percentage of participation in the original cost of the commission (63.39 percent) to the current fair market value of the mural. Alternatively, the state could again display the mural in its headquarters or in another state employment building…

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