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Como[ehens!ve Emo!ovment and m' ' ~nn Act of 1973 (P.L. ~LZ03). This Act as amenoeo allocates zunos to State and local governments for employment and training programs. Allocations are given to about 450 prime sponsors which are renuired to meet certain c~iteria. A prime sponsor ~s a political jurisdiction, such as an individual city or county ~hose population exceeds 100,000, or a consortium. A con- sortium is composed of more than one unit of general local government, ar least one of which has a population greater than 100,000. If the consortium covers 75 percent of the labor market area, it is eligib!e for ~ 10 percent bonus. In most cases outside New England, the !abo~ market area is coterminous with the SMSA in which the governmental units are located- Therefore, when counties are added to an SMSA o~ when two SMSA's are merged, the size of the labor market increases and the likelihood that the previously existing consortium includes 75 percent of the new labor market area is reduced. Thus, the 10 percent incentive may be lost. Title II and Title VI of CETA concern eligibility for funds used to combat unemployment. Title II specifies that public service employment funds are to be distributed only to Areas with SubStantial Unemployment (ASU's). To be defined as an ASU, an.applican~ area must have had three consecutive months of unemployment at or above six and one-half percent during the last 12 months for which data are available, i.e., the reference period. Under Tit!e VI of CETA, 50 percent of the allocation of funds is based on the number of unemployed persons in the applicant area, 25 percent is based on the number of unemoloyed in excess of four and one-half percent, and 25 ~ercent is based on being defined as an ASU. The methodology used by the Bureau of Labor Statistics to determine an area's unemployment rate is clearly an important ~actor in the allocation of CETA funds. For a single-county SMSA or a nonmetropo!itan county, an independent estimate of unemm!oyment is calculated. If a county-is in a multi-county SMSA~ on the other hand, its unemployment estimate is derived by disaggregating the estimate for unemployment in the total SMSA (based on either unemployment and employment for the county in the 1970 Census, er unemployment insurance claims and oooulation)- This difference in methodology is not thou~h~ to have a predictable effect on whether or not a county will benefit from a change in its SMSA status. Nevertheless, the inclusion or exclusion of counties in a given SMSA may have substantial impact on the unemp!oyme~t rates for units of Government with in that SMSA and for the SMSA. as a whole.