Retraining U.S. Office of Personnel Management defines retraining as training and other developmental activities that are: provided to an employee to address obsolescent skills in the current position, such as in the area of technology, or designed to equip an individual with knowledge and skills leading to another agency occupation or position. See 5 C.F.R. §410.101(e) (1997) In the following, retraining is specific to situations where an employee is preparing for another position at agency expense. For employees affected by downsizing, see 5 C.F.R. §330.601(1997) for information about agency Career Transitions Assistance Plans. Tax Implications Training law requires that appropriated funds and other funds available to an agency be used for training to improve individual and organizational performance and assist in achieving an agency's mission and performance goals. See 5 U.S.C. §4101 and 5 U.S.C. §4112(a) (1997).* In situations where agency funds are used to train an employee to perform duties in a new or different mission-related occupation, authorizing officials need to consult with appropriate agency officials to determine if the training has tax implications for the agency and the employee. See 26 U.S.C. §127 (1997). Training for Placement Within the Same Agency Exec. Order No. 11348 §303 (1967), as amended, states that the head of each agency shall plan training for both short and long-range program needs by occupations and organizations. This permits agencies to train employees for other occupations based on organizational need and when vacancies exist. However, if new jobs offer more promotion potential to employees, the employees must compete to enter the training programs. These competitive processes must be consistent with merit principles and equal employment opportunity considerations. Training for Placement in Another Government Agency 5 U.S.C. §4103(b)(1) (1996) states that an agency may train any employee of the agency for placement in a position in another agency if the head of the employing agency determines that such training is in the interest of the Government. Training for Placement Outside of Government The Government Employees Training Act only authorizes training expenses for placement within the Federal Government. The Job Training Partnership Act (JTPA) (Chapter 19 of title 29 U.S.C. §1501 (1996)) is the mechanism for retraining outplaced or soon- to-be outplaced employees for jobs in the private sector. The U.S. Department of Labor administers the JTPA, but state governments use Federal funds to develop and implement these retraining programs. See applicable reduction in force regulations in 5 C.F.R. §351.803(a) (1997). *This link is to the 1996 version of the document. To search for more recent updates select "Update" after following the link.